Public vs. Private Blockchain for the Enterprise
If you’ve caught some of my other articles, you’ll know that I’ve been studying and creating content about enterprise blockchain for a while. The whole time, I’ve been trying to understand the essence of the industry, its major components, firms, and current state of development.
For this article, I decided to follow a lead that @NassimGhorayeb, passed on to me. That was about John Wolpert being an early proponent of an early proponent of private\permissioned blockchains, leading the team that created Hyperledger Fabric, and now he works with ConsenSys and promotes Ethereum for the Enterprise.
I was excited to learn that there was quite a bit of related content to explore, and in the process I came upon some other stories that provide additional perspective.
Digital-Pioneer: John Wolpert
From 1989 through 1993, John Wolpert pioneered the field of digital advertising, landing deals with firms including Apple, and Yamaha. Since then, he’s like the enterprise tech equivalent to a rockstar, working with top firms across the globe. Most recently, before blockchain, Mr. Wolpert was “the Product guy” for IBM’s Watson Ecosystem.
IBM was among the Hyperledger Project’s founding members, and had begun work on Fabric by the start of 2016. Co-creator and director of IBM’s Blockchain Division, John Wolpert was excited about the potential for permissioned blockchains. The idea was that public chains with globally broadcast transactions don’t suit the needs of the enterprise. An idea that paired well with regulatory uncertainty around cryptocurrencies.
“Now people are talking about how they can use blockchains without endorsing any shadow currencies, and everyone is excited,” said Wolpert. “It has gone beyond being a fad.”
A Shift in Perspective
If you were waiting for a sign that opinion was changing about public blockchain for the Enterprise, your sign came, in October 2017. Mr. Wolpert was hired by ConsenSys studios to help with their product and venture efforts, while we were probably distracted by the Bitcoin bull run. He now leads their Web3Studio, and is a vocal proponent of Ethereum for the Enterprise.
That move surely turned a few heads, but John made no public announcements about his new job (or thoughts about his old one) for some time. The following spring, at Consensus 2018, Pete Rizzo of @Coindesk interviewed Wolpert about joining ConsenSys, the history of enterprise blockchain, and the lessening distinction between private and public blockchains.
Pete mentions how a lot of big-name firms, including IBM and Deloitte, have a growing interest in crypto-assets and public chains. Very recently the private and public blockchain ecosystems were fierce rivals, but for many people, consensus 2018 may have been a convergence point.
John said he was happy working with IBM, but when ConsenSys invited him to join their team, it was an opportunity he couldn’t pass up. During the interview, he was keen to de-emphasise the distinction between public and private blockchain. While the enterprise may require privacy and permissions for their internal networks, they still want the ability to engage with public chains..
I’d like to see a year from now, for most people to think it’s absurd to say private networks or public networks. I don’t want to have a private network or a public network for my application. Things I want to build need transactions that are private that terminate in public transactions. John Wolpert - Consensus 2018
Stupid about Blockchain
Months later, Wolpert published The Value of Being Stupid About Blockchain. While most of the projects seeking to implement blockchain technology probably don’t need a blockchain, he says, the quest to do so represents, “an important shift in priorities […] set in motion by the advent of blockchain.”
He goes on to highlight that the functionality that many companies pursuing business blockchain are looking for could be achieved with traditional technologies. The important factor, for Wolpert, is that before blockchain, companies weren’t seeking cross-industry collaboration and information sharing.
Blockchain, like any database technology, can do lots of things. But it’s only uniquely qualified to do one technical thing and one social thing:
The technical thing: Prevent double-spend of a digital asset without trusting intermediaries.
The social thing: Maintain a single source of truth and a shared set of business rules across legally separate entities without anyone being able to alter them and control the system.
Bring on the Stateful Internet
Wolpert’s move to ConsenSys has turned a lot of heads, and left many to wonder:
Are you a Hyperledger guy or an Ethereum guy?
In August, he set the record straight, answering that he works for Consensys because he believes Ethereum has the potential and is a good candidate, to become a “root chain” in the Stateful Internet:
An Internet that can handle data, and rules for changing the state of that data, in the way the Internet handles messaging today —more or less decentralized — AND that allows private stateful networks to interoperate with each other and the public network through standard protocols.
Wolpert has kind words regarding Fabric, but I get the impression that he sees a much greater potential for impacting the global market, using the public Ethereum blockchain. He also shares an appreciation for a number of technologies that have emerged in the wake of Bitcoin (including Fabric, Hashgraph, Tezos, Tendermint, Corda) and is hopeful about their potential to integrate with Ethereum, at some point.
Hyperledger and Ethereum Enterprise Alliance Join Forces
That collaborative potential is already being realized in the case of Hyperledger, as it joined forces with the Ethereum Enterprise Alliance, in October 2018. Their partnership is clearly an important indicator for anyone tracking enterprise blockchain.
“Standards, specifications and certification all help enterprise blockchain customers commit to implementations with confidence since they have better assurances of interoperability as well as multiple vendors of choice.”
Public vs. Private Blockchain for Business
The debate between public and private chains began heating up at the beginning of 2019. January 3, ConsenSys Media published Busting the Myth of Private Blockchains, as part of a 10 part series on Enterprise Ethereum.
Ethereum’s interoperable design provides a lot of flexibility as the most advanced, flexible, and production-ready blockchain platform. Ethereum enables interoperability — first, with its public mainnet, gearing each Enterprise Ethereum solution with global reach, extreme resilience, and high integrity, and second, interoperability with other open-source blockchain projects, allowing for future adaptation and expansion of existing solutions.
Enterprises can achieve more granularity of privacy with Ethereum, typically with much less complexity and maintenance overhead.
Less than two weeks later, R3’s Richard Gendal Brown fired back, with BUSTING THE MYTH OF PUBLIC BLOCKCHAINS FOR BUSINESS, offering a rebuttal to the idea of using public Ethereum for the enterprise.
So my key message is that it’s the inappropriate application of Ethereum technologies to the unforgiving world of real business problems, for which it was not designed, that we need to guard against. These two worlds have very different requirements.
It’s time to declare in public what has been openly discussed in private: Ethereum is currently unsuited to the world of business and we should have the courage as a community to say so.
Wolpert shot back, a little more than a week later:
Are there people learning Fabric and Corda? Yep — I used to fund and run the programs that pushed developer education for Fabric. But I’ve never met a single developer that was really passionate about Fabric the way Ethereum developers are. In my experience, they were learning it because they believed that they could get paid by big companies to use it.
Both Richard and John make persuasive arguments, depending upon your point of view. Their warm rivalry makes compelling content, and it didn’t take long to escalate from blog-wars to a podcast debate.
In March, Richard Gendal Brown was invited to be a guest on the Insureblocks Podcast and share his views on the air. That must have really gotten John going because a debate was arranged shortly after Richards episode aired.
I don’t have the space, now, to explore these topics in depth. This should provide a solid foundation for additional study.
What is striking to me is Ethereum’s growing influence within the enterprise-tech world. Only very recently, “blockchain not bitcoin” was a popular trope in the business world. It seems that sentiment is fading.
On April 16, Ernst and Young announced that it is developing an open-source, public-domain, software solution designed to help its corporate clients use the Ethereum blockchain. Their software (code-named Nightfall) will be published in May. Over the past year, EY’s team of over 200 blockchain developers, have built with such use cases in mind as, “supply chains, food tracing, transactions between branches of a company and public finance.”
The following day, Microsoft and the Ethereum Enterprise Alliance announced an industry-wide, open-source, collaboration for token standardization. The idea is that if there are common standards for creating tokens supporting a variety of feature-sets, this will greatly accelerate the overall development of the industry and promote interoperability among connecting (and competing) solutions.
Certainly, firms will continue to explore the potential of permissioned blockchains. That fact comes as no surprise. What provides a pleasant shock, is to see the public Ethereum blockchain gaining so much ground in the enterprise space.
Wolpert says there is room for both design philosophies, and that we must work to develop open standards in the same way that all web-standards have improved the ability of computers everywhere to know how to interpret each-other.
While there is some uncertainty about the future of Ethereum’s consensus mechanism, there is no doubt that its EVM is enabling a revolution in enterprise tech.
For now, the use of Ethereum’s public chain is leading the charge.
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