On the path to blockchain’s slope of enlightenment

Main visual : On the path to blockchain’s slope of enlightenment

Frederik De Breuck, Head of Fujitsu’s Blockchain Innovation Center in Brussels, Belgium, investigates how Distributed Ledger Technology is moving beyond the initial hype to enable practical application building for enterprises.

In my last blog, I explained why it is a good thing that some of the blockchain hype has now been debunked – with enterprises scaling back on initiatives leveraging blockchain – aka Distributed Ledger Technology (DLT), mainly due to over-inflated expectations.

It is a recurring phenomenon in any technology – they evolve to overcome initial doubts.

Performance was the aspect we looked at last time, noting that new DLTs constructed with enterprise use in mind, such as Hyperledger, have, each in their own way, addressed processing speed such that it is no longer the bottleneck it was with other platforms.

It is time we spoke about the industry-wide concerns about DLT project supervision and deployment, in terms of who within an organization has the final say in the evolution of any concept. That is also linked to the technical practicalities of building and deploying applications, still an important component in any project

As highlighted in a recent story by Bloomberg, analyst firm Forrester points to concerns over immature standards and oversight as the main cause for the bursting of the blockchain hype. In other words, DLT software is not perceived as compatible nor mature – with the associated risk of lock-in – and enterprise users are cautious about not having enough leverage over the future direction and development of any DLT they adopt.

I’m not surprised at the backlash!

I get these concerns, which are the same as those that drove (and continue to drive) the incredible popularity of open source software. In an analogous move away from proprietary standards in enterprise software, the Linux operating system now runs 90 percent of the public cloud workload, more than 80 percent of the world’s smartphones, and 99 percent of all supercomputers.

The open source Apache web server has been the world’s most popular web server for more than 20 years, and today supports more than 40% of all active websites.

It seems safe to conclude from this popularity that the open source model provides the reassurance on oversight and standards that enterprises crave.

This lesson has not been lost on the new DLTs, where openness and trust were among the important reasons why Hyperledger was put under the guardianship of the Linux Foundation and has seen such rapid growth. Hyperledger currently has more than 230 organizations as members, as well as 10 projects with 3.6 million lines of code, 10 active working groups, and close to 28,000 participants who have come to 110+ meetups around the world.

Doing it alone is too slow

The enterprise users interviewed by Forrester also felt that building an application on a DLT technology was just too slow. Stock exchange operator Nasdaq was an early supporter of blockchain and cryptocurrencies and anticipated quickly finding and deploying DLT initiatives of its own. Back in 2016 it spoke publicly about using DLT for voting in shareholder meetings and private-company stock issuance.

However, right now it has no ’widely deployed projects‘. Magnus Haglind, Nasdaq’s senior vice president and head of product management for market technology, recalls that “the expectation was we’d quickly find use cases…but introducing new technologies requires broad collaboration with industry participants, and it all takes time.”

For enterprises trying to do this from scratch and in isolation, it should be no surprise that the delays have become unacceptable. Firstly, building an ecosystem from the ground up is inevitably going to be slow (think how difficult it can sometimes be just to get all stakeholders aligned on an internal project).

Large organizations, quite rightly, take time to evaluate opportunities and risk, which is why a ‘pre-built’ ecosystem, based on an open source, consensus-driven approach, such as Hyperledger Fabric, can be and is so attractive.

The pre-built approach also means that development time is so much quicker. The Hyperledger strategy encourages the re-use of common building blocks, enables rapid innovation of components, and promotes interoperability between projects.

This makes Hyperledger Fabric a platform for the rapid building of distributed ledger solutions, with a modular architecture that delivers high degrees of confidentiality, flexibility, resiliency, and scalability. It is designed to support various pluggable components, and to accommodate the complexity that exists across the entire economy, so that solutions developed with Fabric can be adapted for any industry.

While greater trust and security were important drivers for the early excitement around DLTs, Fujitsu is not alone in seeing beyond these, to the promise of greater efficiency, lower costs and the transformation of processes that new DLTs such as Hyperledger Fabric will create with the high degree of process automation they facilitate.

This is where the Internet of Things and DLT converge and where you will find the real opportunities reside to drive blockchain into applications that will increasingly underpin entire value chains.

On the path to the ‘plateau of productivity’

If it’s true that DLT is now in the ’trough of disillusionment’ on Gartner’s much-touted hype cycle, then the consequence is that we are that much closer to the stage when real, sustainable business applications will start to emerge.

That’s more than a pipe-dream, because platforms such as Fabric now exist to accommodate the performance, process automation capabilities and speed of development that enterprises demand, as well as the peace of mind that rigorous governance and oversight brings.

Those of us involved with Hyperledger think the future of DLT will involve modular, open-source platforms that are easy to use and integrate, while we aim to create an environment that enables us to make this vision a reality.

The combination of advantages inherent with such an approach, including greater intrinsic trust, additional security, the possibility of smart contract automation, machine-to-machine communication and self-executing code, to name just some, makes it a more viable basis for building new, monetizable and realistic business models.

If you’re disillusioned by DLT and on the point of throwing in the towel – talk to us first, as we have deep experience in testing the viability of blockchain projects as well as identifying the critical success factors to get them back on the hype cycle slope of enlightenment, towards the poetically-named plateau of productivity.