Hyperledger and open blockchain

Why is this important?

Blockchain can be used for many services in platforms, such as for distributed and secure digital rights management or payments, ensuring identity or making smart, self-actualising contracts. While it is currently being used mainly for digital currencies such as bitcoin, it is increasingly being used in other areas. In order to enable more wide and open use and seamless cross-industry interaction between different blockchain-based services, Linux foundation launched an open-source project called Hyperledger. The goal is to create a common infrastructure and standard regarding membership management, blockchain technology implementation, transactions and the blockchain code for writing e.g. smart contracts. The project is already backed by many major players, such as IBM, Intel and Accenture.

Things to keep an eye on

Hyperledger aims to define the underlying frame for ensuring interoperability and transparency of blockchain technologies. While there is an increasing number of organisations backing the project, it is interesting to see what kinds of services and applications will eventually be built on top of the common framework. Collaboration or cooperation between other general implementations of blockchain such as Ethereum are also something to keep an eye on.

Selected articles and websites

How the blockchain will radically transform the economy
Introduction to Hyperledger; Why open Blockchain is critical
Hyperledger vs. Ethereum: Yes? No? Maybe?
4 reasons why entrepreneurs should build blockchain companies
Deloitte Survey Results on Blockchain Across Industries

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Blockchain

Blockchain is a technology that enables distributed permission-less database of transactions, verified by the network. It is mostly known for powering the Bitcoin, but it will have an impact far broader than enabling digital currency.

Why is this important?

The blockchain is said to be a disruption on the scale of the internet itself. The most prominent impact is on the financial sector – blockchain has been claimed to replace 80-90% of the cost of Wall street (Coinfox) and there are several blockchain powered trading and investment platforms available (LTP). However, in addition to banking and financial markets, blockchain is said to disrupt any sector with legacy databases, including healthcare, insurance, real estate, government and voting (VLAB, ShapingTomorrow). Estonia is already looking into using blockchain for health care records (Quartz), and Sony is developing an education platform powered by blockchain (TechCrunch).

One of the key impacts of blockchain is that it provides a technology of trust and eliminates the need for a middleman. This will allow truly distributed systems as well as new functionality such as smart contracts (LTP). Ethereum is one blockchain app platform, which aims to make blockchain based smart contracts easy to make (Medium). MIT has developed a platform called Enigma for secure data sharing, which enables analyzing the data by external applications while keeping the data itself private (BitcoinMagazine).

Things to keep an eye on

Blockchain potential has been noted by the business community, and 55% of firms in the global securities industry are engaged in R&D around it (ChainFinance). However, it is also useful to be aware of the challenges facing blockchain, which have less to do with the technology itself, but more on how it is applied. For example Bitcoin is suffering from problems in scaling and the power in the network falling to just a handful of people (Medium).

In Finland there is growing interest in blockchain, but it is not yet in the everyday vocabulary (Digitalist). It is included in one of the recent TEKES calls and there is a new Facebook group on the subject. ETLA has made a report on the subject last Autumn (ETLA). There are some startups focusing exclusively on blockchain, such as Nordledger, ”a blockchain venture production studio”. The potential of blockchain beyond the financial sector has been recognised also in Finland. One recent interesting initiative is the Thing2Data project, which aims to provide a platform for making everyday object ”smart” by adding unique identifiers to them and utilising blockchain to store and verify the data (TiVi).

Selected articles and websites

Know more about blockchain: overview, technology, application areas and use cases
Satoshi Roundtable: Blockchain is bigger than the Internet
Blockchain-Powered Trading and Investment Platforms
More than Money: Get the gist on bitcoins, blockchains, & smart contracts
Blockchain-Enabled Smart Contracts: Applications and Challenges
Programmable blockchains in context: Ethereum’s future
Global Securities Industry Group Survey Finds 55% of Firms Engaging in Blockchain Tech R&D
The resolution of the Bitcoin experiment

 

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd

Victor Vurpillat

Global X-Network
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