Category

Blog

Regulators and Industry Groups Continue Blockchain Efforts

By | Blog | No Comments

Guest post: Matthew Comstock, Shareholder, Murphy & McGonigle, P.C.

Regulators and industry groups continue their efforts to understand blockchain technology and its implications for the securities, futures and related financial sectors. Importantly, regulators and industry groups have not yet advocated for or against any particular type of blockchain technology. Rather, efforts have largely centered on defining what, in the view of those regulators and industry groups, blockchain technology is, how it may be used in the financial services industry, and what the regulatory implications are for its use.

The various financial industry regulators and industry groups have not coalesced around a single definition of blockchain technology. Their definitions, however, typically describe blockchain as a technology that involves a type of distributed-ledger technology that includes a decentralized, public or private peer-to-peer network that records transactions that occur through the network in shared digital ledger.   

The U.S. Securities and Exchange Commission (SEC), the primary federal regulator for the securities industry, appears to have begun formal work on blockchain-related matters with the establishment of the Digital Currency Working Group, which started around 2013. Since that time, the SEC has been asked to clarify whether digital currencies are securities; approved a registration statement to become effective that permitted a company to sell digital securities to the public; and held a FinTech Forum in the fall of 2016, which included a panel on blockchain technology (panelists included members of Hyperledger). In March of this year, the SEC issued two separate controversial blockchain-related orders. It disapproved proposed changes to the rules of two securities exchanges that would have permitted the Winklevoss Bitcoin Trust to trade on one exchange, and the Solid X Bitcoin Trust to trade on another. Each trust would have traded as an exchange traded product, with bitcoin as its the underlying asset. In disapproving the proposed rule changes, the SEC essentially took the position that lack of regulation surrounding bitcoin markets made bitcoin, and thus the trusts, susceptible to fraud and manipulation.

The Financial Industry Regulatory Authority, Inc. (FINRA), which oversees securities brokerage firms (subject to the ultimate supervision of the SEC), recently issued a report (the “FINRA Report”) on blockchain technology. The FINRA Report (1) described blockchain technology; (2) discussed potential applications of blockchain technology to the securities industry (e.g., issuing and trading public company stock on a blockchain-based platform, and centralizing customer identity management functions); (3) identified potential impacts on the securities industry, such as increased transparency (e.g., by maintaining a database containing the complete histories of securities transactions, and altering or eliminating the roles of financial intermediaries); and (4) addressed implementation considerations, such as governance (e.g., “trustless” network open to the public with no single party responsible for the proper operation of the system, versus a private network with parties known and trusted, and transaction validation (consensus-based versus single-node verifier).

Finally, the FINRA Report discussed certain regulatory implications arising out of securities brokerage firms’ use of blockchain technology, particularly with respect to financial responsibility requirements. For example, FINRA raised an issue as to how brokerage firms could meet their regulatory obligations to take custody of “cryptosecurities” held on a blockchain network on behalf of customers. Moreover, FINRA asked whether cryptosecurities held by a brokerage firm would have a “ready market,” i.e., a liquid market, so that firms’ holdings of such securities would be allowable (liquid) regulatory capital. The FINRA Report also noted the brokerage firm records that are maintained electronically must be kept in a non-rewriteable, non-erasable format (also referred to as “write once, read many” or “WORM”). Although blockchain is arguably a superior recordkeeping technology, FINRA nevertheless asked whether a brokerage firm records maintained on a blockchain network would meet the SEC’s WORM requirement.

An organization that primarily represents brokerage firms and asset managers, the Securities Industry Financial Markets Association (typically called “SIFMA”), is in the process of drafting a comprehensive response to the FINRA Report. SIFMA members have indicated that SIFMA’s response will advocate that any guidance regulators provide, or principles that regulators formulate with respect to blockchain, be technologically neutral.   

The International Organization of Securities Commissions (“IOSCO”) recently issued the “IOSCO Research Report on Financial Technologies (Fintech)” that included a discussion of distributed ledger technology.  IOSCO noted that blockchain is one subset of distributed ledger technology, distinguished between permissioned and permissionless systems, described proof-of-work and proof-of-stake consensus algorithms, and emphasized the role tokenization and smart contracts are likely to play in applying distributed ledger technology to the financial services industry. The IOSCO report also identified potential application of distributed ledger technology to the financial services industry in areas such corporate recordkeeping; trading and settling transactions in certain types of financial instruments; ensuring that certain regulatory requirements are met (e.g., compliance with anti-money laundering rules); creating individual IDs to be used in financial transactions; and improving the speed, efficiency and security of financial transactions, among other things.  

The U.S. Commodity Futures Trading Commission (CFTC), the federal agency tasked with overseeing futures intermediaries, among other things, recently proposed to modernize the CFTC’s recordkeeping rules for such intermediaries.  The proposed rules are intended to be technology neutral, and would take a principles-based approach to recordkeeping. Among other things, futures intermediaries would be required to maintain security, signature, chain of custody elements and data as necessary to ensure the authenticity of the information contained in regulatory records.

The efforts described above built upon, among other things, earlier white papers from The Depository Trust & Clearing Corporation and the Board of Governors of the Federal Reserve System.  Expect regulators and industry groups to continue their efforts around blockchain technology.

[VIDEO] Hyperledger Interviews Hanna Zubko, IntellectEU

By | Blog | No Comments

We recently sat down with Hanna Zubko, Co-founder and VP of business development at IntellectEU. IntellectEU is a general member of Hyperledger.

IntellectEU plans to continue to build out several blockchain proof of concepts in 2017 but they are also looking to expand their footprint into other various industry verticals. Hanna explains that it is important to their stakeholders to be able to build a solution using blockchain technology that is enterprise ready and scalable.

Hanna believes a key benefit of joining Hyperledger is the community. She encourages any institution that is experimenting or interested in building blockchain solutions to join. With Hyperledger, IntellectEU can harness the benefits of this new technology and is at the bleeding edge of blockchain.
Watch the full video below!

Meet Hyperledger’s New Security Maven!

By | Blog | No Comments

We’re thrilled to announce that the Hyperledger team is growing! We’ve recently added David Huseby as the Security Maven.

David brings more than 20 years of experience working with and on open source projects in industries including aerospace, video games, and web, both server and client side. For the last decade he has focused on privacy enhancing technology, user anonymity and anti-surveillance. Most recently he was a senior platform security engineer at Mozilla where he focused on web privacy and led the project to merge Tor Browser hardening into Firefox.

Now let’s get into some questions to better understand David’s role, what he will be working on and his own aspirations for Hyperledger.

What got you interested in working on Hyperledger and blockchain?

I am a long-time Bitcoin user and enthusiastI mined my first Bitcoins when they were worth just $4.00 USD. The blockchain technology in Bitcoin has always fascinated me and like everybody else I immediately saw its potential for solving persistent problems in a variety of other industries. Working on blockchain technology has been on my to-do list for years. I was attracted to the Hyperledger project because of its solid community leadership and the integrity of The Linux Foundation. When I was given the opportunity to work on all-things-security and all-things-blockchain at The Linux Foundation, I could not refuse. I am very excited to be joining the team.

David Huseby, Hyperledger’s Security Maven

What are your main goals now that you’re part of the Hyperledger team?

I’d like to work with the community to maintain and grow the trust in our projects. Taking inspiration from other successful open source projects, I’d like us to document a set of software development and deployment best practices that all of the Hyperledger projects follow consistently. Projects like the Linux kernel, the Bitcoin core, and the Tor project have pioneered great standards for managing change and integrity during software development and deploymentwe would do well to emulate them.

I also want to partner with our project teams to build a security vulnerability reporting system that minimizes the friction of reporting security vulnerabilities responsibly.  In addition to the reporting system, I would like to organize and coach a security triage team for driving issues from reporting all the way through resolution and disclosure.

It is also important that we get out ahead of any security related regulatory issues in markets like finance and healthcare.  I’d like to work with our member partners to plan for and minimize the roadblocks for Hyperledger projects moving into regulated industries (i.e. being prepared for audits and code escrow, etc).

In addition to the above projects, I am taking a special focus on the identity problem. I plan to learn all I can about any future projects that fall under Hyperledger regarding personal identity and personal data management with blockchains. Having a good answer to the identity problem is one key element to the success of many of the Hyperledger projects.

What do you think is most important in terms of security for Hyperledger to focus on in the next year?

Blockchain technology is being applied to systems where lapses in security can result in serious consequences. I think our greatest challenge is to nurture and grow the great software engineering culture that already exists in all of the Hyperledger projects.  Security is ultimately a human problem and having good engineering culture naturally leads to consistent application of best practices. In the next year I hope to partner with the community to bring best practices such as signed commits, merges, and releases, dependency tracking, sign off accountability, and responsible disclosure of vulnerabilities to all of the Hyperledger projects. That is how we will maintain the trust of our partners and the broader community that relies on the technology we create.

What’s the one issue or problem you hope blockchain can solve?

I hope that we can solve the identity problem in such a way as to maximize the privacy and sovereignty of everyday people. So much of the computerized world is dedicated to tracking people and monetizing that information. I hope blockchains give me back control over my private self while also lowering the friction of proving that “I am me” to the myriad of balkanized systems. The last time I checked, my password manager had account credentials for over 200 different separate services that I use. Why can’t there be just one cryptographic proof for “this is me”?  And why can’t I be asked to approve what data gets shared? I truly hope we solve this problem, or at least find a good enough solution for most people.

Where do you hope to see Hyperledger and/or blockchain in five years?

In five years I hope Hyperledger is universally respected for having nurtured cooperation and leveraged technical and industry expertise to bring blockchains to market and to make tangible improvements in many different industries. I half-joke that if Apache helped make the Web, maybe Hyperledger can help make the Web easy.  Having a universal identity solution, cryptographically secure ways to share data, and auditable access to digital records would go a long way in making the Web easier for everybody. Hyperledger and The Linux Foundation is the natural place for that level of Internet-wide cooperation and in five years, I hope we will have succeeded.

What’s one thing you wish people understood about security?

I wish people understood that security is mostly a people problem. We’ve all heard stories of bad passwords being the weak link in an otherwise secure system. Having good security is like having good hygiene. It takes diligence and constant attention and strong passwords.

What is the best piece of advice you’ve ever received?

I always live by these two pieces of advice:

  1. If something is worth doing, it is worth doing right. (Thanks D). To me, this means that I should be picky in what I commit to so that when I commit, I am all in.
  2. Always have your passport. (Thanks A). Living by the first piece of advice is intense and this second piece of advice means I never miss a chance to stop and have fun. Sometimes the right answer is to get on the next plane to somewhere, anywhere, and go have fun.

What do you like to do in your spare time?

I live in Las Vegas so what don’t I do in my spare time?  Seriously though, I enjoy spending time with my friends at the Synshop Hackerspace. I am an occasional guest on the Greynoise podcast that is recorded at the Synshop every Friday evening. I also enjoy exploring the south western states, going on hikes, camping, and getting outside in general.  A few months ago I decided to start corresponding with friends through handwritten letters and because if something is worth doing, it is worth doing right, I started teaching myself Spencerian calligraphy to up my power level. I think my favorite thing to do is make new friends, so please, if you see me at a conference or a meetup somewhere, don’t hesitate to come say “hi”; we might become pen pals.

 

Hey – You got your Ethereum in my Hyperledger!

By | Blog, Hyperledger Burrow | No Comments

Last Thursday marks another important milestone in the Hyperledger books: the Hyperledger Technical Steering Committee (TSC) approved a proposal submitted by engineers at Monax and Intel, to incubate the community’s first Ethereum derived project – Burrow, a permissionable smart contract machine.

The Burrow project originated with Monax as eris-db, and has been open source since December 2014. The project has been relicensed to Apache Software License 2.0, in accordance with the Hyperledger governance requirements.

Burrow, becoming a project under Hyperledger, is important for a variety of reasons:

First, and foremost, having an Ethereum derived project under the Hyperledger umbrella should send a strong message that any positioning of the Hyperledger and Ethereum communities as competitive is incorrect.

The blockchain technology community still has many technical challenges to solve, and many different possible approaches to solving them. “Permissioned” and “unpermissioned” represent two ends of a range of options for configuring a distributed ledger, not a binary choice. Choices we can make at the smart contract layer are even more complex. Being able to collaborate on various approaches to these problems is fundamentally important to getting really innovative ideas into production-quality code as quickly as possible.

Secondly, with an Apache licensed Ethereum Virtual Machine (EVM), other distributed ledger projects in Hyperledger (e.g. Fabric, Sawtooth Lake and Iroha), can now experiment with integrating the EVM into their respective platforms. There is still much work to do to make this happen, of course, but the prospect of this is now much more tangible. This also marks the start of a productive relationship with the broader Ethereum community, including the Enterprise Ethereum Alliance as we monitor the specifications developed there for their application towards Burrow.

“We’re extremely excited that Burrow has been accepted into Hyperledger. This is a huge step in creating a forum in which the larger enterprise community can contribute towards building production-grade applications with the EVM smart contact interpreter. Inclusion of the code base in Hyperledger will ensure the longevity of the open source project under the mature devops and governance of The Linux Foundation and will be a primary driver toward the realization of enterprise grade ecosystem applications.” – Casey Kuhlman, Monax

I know that many in the community have been looking forward to (and working towards!) this day. I think it will mark an important point in Hyperledger’s (and blockchain) history. Stay tuned, as we’ll be moving the Burrow project to Hyperledger infrastructure over the next few weeks.

Developer Showcase Series: Hart Montgomery, Research Scientist in Cryptography, Fujitsu

By | Blog | No Comments

Next up in our Developer Showcase Series is Hart Montgomery, a Research Scientist in Cryptography at Fujitsu. This blog series highlights the work and motivations of developers, users and researchers collaborating on Hyperledger’s incubated frameworks and modules. Let’s see what Hart has to say!

Give a bit of background on what you’re working on, and let us know what was it that made you want to get into blockchain?

Like most people, the first time I heard about blockchain was through bitcoin. I learned the details for the first time when my PhD advisor decided to throw the bitcoin white paper into the pool of papers we would present at our crypto reading group, and I had, in hindsight, the good fortune to get assigned that paper. My first thoughts about bitcoin were that it was a really fascinating idea, but probably would never reach the critical mass necessary to make it to the mainstream. Obviously I got that one wrong, and some of my friends still give me grief about it to this day. Eventually I came around to believing that blockchain would be an exciting new area where applied cryptography could be quite useful, and I think that has been correct so far.

I tend to think of blockchain technology as the application of modern cryptography to modern databases. This obviously means that there are many new and exciting cryptographic problems to be studied, as well as old ones that have suddenly become relevant again. As someone who does cryptographic research, this means I have a whole new set of interesting problems to try to solve. The theme of my blockchain work generally involves using cryptography to make blockchains more secure and more feature-friendly regarding privacy and anonymity.

Hart Montgomery, Research Scientist in Cryptography, Fujitsu

What is the one issue or problem you hope blockchain can solve?

My view is that blockchain solves one extremely general problem: suppose you want to have a database or computing environment that needs to be distributed among multiple users who don’t fully trust one another. How can you build this efficiently? The answer is blockchain. While this general problem may seem narrow at first glance, it turns out that it encompasses a huge amount of potential use cases and applications, ranging from finance to supply chain to IoT and more. I’d encourage anyone interested to look at the Hyperledger requirements working group for more applications.

On the flip side, I think that if you aren’t trying to solve an instance of this general problem, then blockchain probably isn’t a good solution. Blockchain has justifiably received an enormous amount of hype over the past few years, but it is still important that the community does not oversell the technology.

What do you think is most important for Hyperledger to focus on in the next year?

I think this is unequivocally security. People aren’t going to start using blockchain solutions until they have full confidence in the security of the platform. From the widely publicized Mt. Gox incident to the DAO hacking, there have been many cryptocurrency attacks that have undermined the general public’s confidence in blockchain security. But this is not to say that private blockchains will be more secure than cryptocurrencies. Once important infrastructure is run on private blockchains and there are financial incentives for hackers, I expect that these blockchains will be regularly attacked too, and security flaws will be found.

I like to use the analogy that a blockchain needs to be secure in an online environment, against an online adversary–like TLS, for instance–but needs to have a massive amount of functionality and complexity–almost like an operating system. The task of securing such a complex system in an online environment is quite daunting, and needs to be given a considerable amount of thought.

Where do you hope to see Hyperledger and/or blockchain in 5 years?

In the very long term, I’d like to see Hyperledger essentially become a toolkit that almost anyone can use to build their own blockchain. There has been a huge proliferation of industries where people have realized that a blockchain solution makes sense, and many of these blockchain solutions will require extremely different blockchains. Consensus algorithms, cryptographic requirements, database storage, inter-blockchain communication–all of these are things that could need to vary highly between different blockchains, so it’s important to have a modular system that allows blockchain system builders to plug-and-play various blockchain components. I hope that we can eventually reach a point where even basic system administrators can set up and maintain specialized blockchains for smaller-scale things like local governments or school districts.

Since this question also addresses blockchain in general, I’d be remiss without saying that I would like to see cryptocurrency succeed and become even more mainstream. In five years (or hopefully less) I would love to have a phone app that I could use to pay for everything in my daily life with cryptocurrency, with all of the security features a cryptographer would desire. I don’t think Hyperledger will be involved in this (although it should clearly have interfaces for interaction with cryptocurrency chains in the long run), but strong cryptocurrencies are still something that I (and, I suspect, most of the Hyperledger community) would like to see.

What advice would you offer other technologists or developers interested in getting started working on blockchain?

I think it is very important to have a good theoretical understanding of the technologies behind blockchain. Sometimes I see people proposing blockchain solutions for problems where blockchain really does not make sense, and this is generally because there has been some conceptual misunderstanding about cryptography or blockchain technology. To this end, I would highly recommend the Stanford cryptography course (CS 255) and the Stanford bitcoin course (CS 251) as good starting points for learning the basics (course materials are available and free online).

Indian Bank removing friction in business transactions using blockchain technology

By | Blog, Finance | No Comments

Guest post: Rajendra Mhalsekar, President, Head, Corporate Banking Technology, YES Bank  

Blockchain technology is poised to disrupt nearly every industry from key players to core functions – and the banking and financial markets industry is at the forefront. In a recent IBM IBV Study, 15 percent of banks and 14 percent of financial market institutions said that they intend to implement full-scale, commercial blockchain solutions in 2017. Mass adoption isn’t that far off either, with roughly 65 percent of banks expecting to have blockchain solutions in production in the next three years.

India’s fifth largest private bank, YES BANK, is among the first wave of institutions around the world to publicly announce innovation in payments using blockchain and cognitive technologies. Collaborating with IBM in 2015, it was the first bank in India to have launched API Banking services, which is a technology protocol allowing one access to the bank’s transaction processing services from an ERP environment in a secure manner.

Making use of blockchain technology

By capitalizing on the efficiency and security features of blockchain, YES BANK has used Hyperledger Fabric to design an innovative supply chain financing solution. It will aim to reduce the turn-around-time for an invoice to payment cycle from the current 60 days to near rapid real-time processing. This will help recognize enhanced efficiencies in terms of cost as well as resources.

Using the Hyperledger Fabric 0.6, YES BANK is working to implement a permissioned blockchain network. This means that each node, or network participant, is required to prove its identity as a member of the network, thereby helping banks to maintain transaction anonymity on the shared ledger while retaining confidentiality of the contract between business users.

Helping resolve YES BANK’s payment challenge

The blockchain solution helps YES BANK resolve complex vendor payment issues. For instance, the bank’s vendor financing solution allows its client Bajaj Electricals to digitize the process for the discounting and disbursing of funds to its vendors by seamlessly integrating with the bank’s systems. The integration of both upstream and downstream systems offering automated processing of transactions greatly reduces the need for manual intervention with the help of YES BANK’s API Banking.

Governing these transactions, the business logic and rules are now captured in a specifically designed “smart contract” chain code. Furthermore, implementation uses a superior Cryptokey, which offers state-of-the-art security for both documents and transactions on the Blockchain. Therefore, YES BANK helps ensure the Financial Supply Chain is more robust, secure and seamless, offering a great customer experience and making a significant impact on the overall Global Transaction Banking space.

Blockchain aims for transparency

Blockchain technology ensures maximum transparency because of its structure, which does not allow for data to be altered by any one party, and works in append-only mode (meaning that records can only be added, not deleted or changed further back on the chain). This allows banks to more accurately track customer payment histories, across borders and banks, reducing the risk of defaulters.

With the recent focus on the financial industry where fintechs and banks are collaborating to make user experience more positive, the transparency in the system will go a long way to transform transactions.

A key consideration with the advent of blockchain technology in business is the regulatory climate. In India, government regulators are already beginning to embrace this technology, and the Reserve Bank of India acknowledged that blockchain has potential to transform India’s financial markets especially because of its inherent security and ability to combat counterfeiting.

Looking forward

YES BANK is aiming to have a transparent decentralized ledger wherein the bank and its customers are aware of every block of information updated, thereby reducing discrepancies between the bank, its end users and vendors, allowing “auditability with accountability” for all. With blockchain technology helping to remove much of the friction in business transactions, it can be instrumental in transforming processes to ensure a better experience for all involved in its network.

Hyperledger’s Monthly Technical Update

By | Blog, Hyperledger Cello, Hyperledger Explorer, Hyperledger Fabric, Hyperledger Iroha, Hyperledger Sawtooth | No Comments

As our incubated projects continue to mature, we’d like to update the community monthly on the progress we make. Below are updates on Blockchain Explorer, Fabric, Cello, Iroha and Sawtooth Lake during March.

Blockchain Explorer

  • Latest architecture document is now available on wiki.hyperledger.org
  • Created several Jira tickets required to complete the functionality
  • Completed the initial setup using the latest architecture as proposed in the architecture document

Fabric

  • We published the v1.0-alpha release [1,2,3] of Fabric, Fabric-ca and Fabric-sdk-node. Work now pivots towards testing, bug fixing and further hardening of the release. The maintainers will publish periodic releases as the code further stabilizes.
  • The TSC also approved incubation of a new Fabric SDK for Go. That project will be on-boarded shortly.
  • There is an active proposal to incubate the Fabric-Composer project, but the TSC needs another week of review and discussion. There seems to be interest beyond Fabric that warrants exploration.
  • Planning for a “connect-a-thon” across multiple cloud providers – one that demonstrates that Fabric can be deployed to multiple cloud platforms and integrated into a highly distributed and heterogeneous consortia network – is under way with a number of community members interested in contributing to that effort.

[1] https://github.com/hyperledger/fabric/releases/tag/v1.0.0-alpha

[2] https://github.com/hyperledger/fabric-ca/releases/tag/v1.0.0-alpha

[3] https://github.com/hyperledger/fabric-sdk-node/releases/tag/v1.0.0-alpha

Cello

  • Finished the operational dashboard theme supports, now we support flexible dashboards based on different requirements.
  • Fixed deployment issues from the mailing list and Rocket.Chat, many users show their favorites in Cello.
  • Started implementing fabric 1.0 supports, new features on chaincode lifecycle management are being discussed and will be planed.

Iroha

  • We added a python library and scala library.
  • API is being refactored to match the new flatbuffer data scheme. This should be completed this month.
  • Ametsuchi, the flatbuffer database, is mostly finished. The first version and integration into Iroha should be completed this month.
  • We are currently targeting a v1.0 release of Iroha by the end of April.
  • A very successful hackathon was hosted by the University of Tokyo on March 11-12, where several teams made interesting applications on top of Iroha.

Sawtooth Lake

  • Sawtooth Lake was awarded 2016 Open Source Rookie of the Year by Black Duck software.
    • Previous winners include OpenStack, Ansible, Docker, and Rocket.Chat.
  • New features continue under master (0-8 branch).
    • 0-8 is approaching MVP feature parity with stable (0-7) along with its new capabilities.
    • Recent new features in 0-8 include on-chain configuration and new CLI tools to build transactions including those configuration transactions

That’s it for the updates! We encourage developers to join our efforts on these projects. You can plug into the Hyperledger community at github, Rocket.Chat the wiki or our mailing list. You can also follow Hyperledger on Twitter or email us with any questions: info@hyperledger.org.

Happy coding!

[VIDEO] Hyperledger Interviews Thierry Chevalier of Airbus

By | Blog | No Comments

We recently sat down with Thierry Chevalier, Chief Engineer of a Digital Product Development and Manufacturing project at Airbus and Hyperledger board member.

In the interview, Thierry explains that an important objective for Airbus is to revamp how they develop products and manufacturing with blockchain.

The benefit of being a part of Hyperledger is to take advantage of an open source initiative, and align on common solutions for handling complex supply chain issues found in aeronautics. Airbus has literally hundreds of thousands of partners and having this kind of solution is politically neutral and affordable for everybody to collaborate.

Thierry believes if someone is considering blockchain, the combination of open source, a robust governance policy, as well as a wide range of technical options including options on private or permissioned blockchain, makes Hyperledger a very good choice.

Watch the full video below!

Transcription here.

Recap: First Hyperledger Tokyo Meetup Sells Out!

By | Blog | No Comments

Even though it’s been more than a year since Hyperledger was born, there hasn’t been much of an opportunity for Japanese enthusiasts to learn about the initiative.

Hyperledger Executive Director, Brian Behlendorf came over to Japan last year to talk about the project and encourage people to work together in the community, but there aren’t many other Japanese resources to turn to. That was a big reason why we kicked off the Hyperledger Tokyo Meetup and the first meeting was a huge success! So much so, that it completely sold out! We booked a venue with a max capacity of 180 people, and all 180 seats were sold out a week prior to the event. We accepted at least 10+ people afterwards and added extra chairs in the conference hall to accommodate attendees. Interest was high to say the least!

We had several Hyperledger member speakers and all of which did an amazing job. It was a rich and fruitful five hours for attendees to learn about all things Hyperledger.

Toshiya Cho of Hitachi and Hyperledger Board Member, kicked off the event by providing a brief overview of Hyperledger. Nishio Yamada and Satoshi Oshima of Hitachi, explained the technical overview of Hyperledger Fabric. Satoshi took the stage wearing his “I am Satoshi” t-shirt (one of very few people in the industry that can actually pull that off.)

Then, Akimitsu Shiseki, took an opportunity to explain one of our latest developing projects, Fabric Composer, which aims to lower the bar in working with Hyperledger for non-platform developers. Makoto Takemiya of Soramitsu and the founder of Iroha then talked about Hyperledger Iroha, another framework in incubation. Iroha is a great framework for small to medium sized use cases.

Yuta Namiki of NEC delivered an extremely interesting talk, as a database expert, where he analyzed the differences between traditional relational databases and blockchains (distributed ledger tech).

Takahiro Inaba and Shinichi Yamashita of NTT DATA, talked about things to consider when implementing a blockchain system; starting from how to select blockchain products, the differences between cloud vs. on-premise, which solution is cheaper to issues like who should own the node and so on.

Finally, Naruto Takiguchi of Fujitsu, talked about his experience and learning from a real POC with a Japanese financial institution. He explained the issues he faced during the POC, and for each issue, he explained the difficulty he faced, how he actually solved it, and what needs to be contributed to the community as a result of the lesson he learned.

Overall, it was a great experience and attendees were able to learn about Hyperledger from a wide variety of perspectives. This was a perfect introduction for the Japanese community, and we’re looking forward to more events in the future. We’re already in the midst of planning the next meetup, which will be much more technical focused.

Big thanks to Fujitsu for letting us use such an wonderful event venue and to all the other members participation in this great event! Anyone interested, can join the Hyperledger Tokyo Meetup here: https://www.meetup.com/HyperLedger-Tokyo/

Finally, if you’re thinking of starting a Hyperledger meetup in your area, you should first visit the Wiki to learn about best practices to do so: https://wiki.hyperledger.org/community/meetups

Blocks vs. Transactions: Language is Important to the Blockchain

By | Blog | No Comments

Guest post: David Pinski, Chief Strategist for Financial Innovation at Hitachi’s Global Center for Social Innovation

As with any new technology, those developing blockchain and distributed ledger technologies (DLT) are developing a new vocabulary to define and describe the relevant components and systems. This new vocabulary matters to more than the people that are deeply involved in the project. It also matters to business people and consumers that are deciding whether or not to adopt this technology. Sometimes those involved in a project lose sight of how others might perceive it.

Since DLT is still in its early phases of adoption, perception is still quite important. Business leaders are making decisions about adoption that will impact the level of investment and the types of use cases that will be served. It is with this in mind that I address the use of the term ‘transaction’ when describing blockchain events.

My observation is that people tend to think of a transaction as a discrete event like paying someone in Bitcoin. And when a business person hears that Bitcoin performs seven transactions a second, they develop the notion that blockchain technologies are slow. And they are, when compared to a relational database, so this just reinforces this understanding. In business terms, seven transactions a second could be a useless technology. Except that those that work with Bitcoin understand that the seven transactions a second refers to the transaction of a block, not a single exchange of Bitcoins. 

In fact, there are about 2,000 exchange events* typically written to a single block. Thus, Bitcoin can support about 14,000 transactions a second (defined later). This is adequate capacity to be useful for many business purposes, but would not support payment card volumes. Moving to Hyperledger, the ‘business version of DLT’, there is even more capability to process the blocks that make up the blockchain.

Hyperledger is designed to support 280 blocks per second. If it were handling Bitcoin type transactions, it could record about 560,000 transactions per second. This is a fairly robust capacity, able to handle all but the largest tasks. But once again, we need to define what a transaction is. In the DLT world, smart contracts, not just financial transactions, can be supported. As a simple definition of a smart contract  for the purpose of this article, is any transaction between parties. A smart contract can describe a transaction with dozens of fields of data. Like the terms of sale, an insurance policy, status of an IoT device, or anything you can think of.

Smart contracts are defined when a distributed ledger (DL) is designed and deployed. Subsequently, the size of these transactions can vary. There could be one smart contract (transaction) per block or thousands. Expectation of capacity and speed can only be set after understanding and designing the business process underlying the smart contract(s).

To further clarify system performance and speed, one should also explain latencies when processing ‘blocks per second’. There is a queuing and commitment process associated with submitting a transaction to a distributed ledger. This process can take anywhere from a few minutes, to more than a half an hour for some Bitcoin transactions. Once again, the speed will be determined by the blockchain technology used, its configuration and load. So, while a system may be recording 560k transactions into 280 blocks per second, the cycle time for processing an individual transaction will take minutes not sub-seconds. As technology companies work with clients, they need to be realistic and careful about performance expectations and service level commitments.

To overcome these challenges, I would like to propose some simple language adjustments when discussing blockchain processing. Since the world outside blockchain considers a ‘transaction’ as a business interaction, such as exchange of currencies like Bitcoin, I would suggest not using that term to discuss the processing of a block into a blockchain. For that, I would suggest using the term ‘blocks per second’ or just ‘blocks processed.’

I am curious what others in the community think, tweet @dapinski or @Hyperledger with your thoughts. 

*Number of events/transactions per block varies, but is currently averaging about 2k/block