Hyperledger for the Blockchain Skeptic

As an enterprise software developer, I’m used to thinking about solving real world business problems. So, naturally, I was pretty skeptical of bitcoin and the blockchain when I first heard about it.  

Yet the idea of a “distributed ledger” kept tugging at me. Since all the apps we’ve built, from ERP to CRM to e-commerce, revolved around a ledger of transactions, what could a global, distributed ledger allow us to build?  

It took me three years of off-and-on studying and a few very smart people to finally make me realize that the blockchain, or distributed ledger technologies (DLTs), is just a small step from what we’re already used to. But that little step could unlock a new world of possibilities.  

In this post, let me address some of the common skepticism I’ve encountered as part of the Hyperledger Climate Action and Accounting Special Interest Group. Then in a follow-up post, I’ll show you why I believe climate change is the killer app for the blockchain.

I Don’t Need a Blockchain

Are you sure? Because you’ve probably already started building a few.  

With enterprise software, we often have to prove that the data we’re using is authentic. So how would you assure someone that the data you’re using has not been altered or tampered with?  You know that the data provider might change its API or the data you get from it, so 

• Did you make a local copy of the data you got?  
• Did you record the date and time you got it?  
• Did you record a hash of the data, so it could be compared with the data you used for your application?  
• Did you store archival copies of the data and the hash so that you could prove that they are all correct?  
• Did you store multiple copies just to be sure?

If so, then you’ve built much of what goes into a blockchain or distributed ledger. A blockchain is really a protocol to store data across multiple nodes while assuring their consistency. It follows all the steps outlined above, plus a few more, to make sure that once stored, data cannot be lost or altered.  

So if you’ve already been building your own “distributed” data records, then you obviously need what the blockchain offers. It addresses many of the pain points of data integration that we deal with every day in enterprise software.  

The advantages of an open source blockchain platform such as Hyperledger Fabric or Hyperledger Sawtooth, compared to a homegrown solution, are many: Most obviously, there is security and scalability of a developed solution. Then there is the support for the “unknown unknowns,” use cases you may not realize exist but would surface over time. Finally, there’s the chance to work with some very smart people and learn more about this emerging technology.

Databases Are Faster than Blockchains

This is certainly true, and nobody would suggest that you replace your database with a blockchain. The two have different but very complementary uses.

Databases are great for fast read and write access of data within an organization. Blockchains are great for making sure data is stored immutably, so that its authenticity could be proven across multiple organizations.  

Another way to think about it is that databases are for building applications, while blockchains are for building collaboration.

There Are too Many Competing Blockchains for Me to Use Them Now

This probably stems from confusing blockchain with Bitcoin, just like people once confused Compuserve or AOL with the internet.  

Remember that blockchain is a technology, while Bitcoin is a protocol and a cryptocurrency implemented with blockchain. There will always be many different protocols, cryptocurrencies, and frameworks implemented with blockchain technologies, just like there were many different websites implemented on the internet.  

Blockchains are Too Energy Intensive and Bad for the Environment

I get this from climate activists, some of whom actually got angry when I mentioned the blockchain.  Again, this stems from confusing blockchain with Bitcoin, Ethereum, and other implementations of the blockchain.

The early blockchain protocols such as Bitcoin and Ethereum used proof-of-work consensus mechanisms, which required a lot of energy-intensive “mining” of cryptographic puzzles. Their  creators probably never imagined them to become as popular as they did, or that they would consume as much energy as whole countries.

Fortunately, we’re all moving away from proof-of-work because it is so energy intensive and simply slow. Hyperledger Fabric, for example, is both fast and energy efficient because it does not use proof-of-work.

Blockchains are Too Immature Right Now

This may have been true five years ago but is definitely not true any more.  There are plenty of blockchain applications — Bitcoin, Ethereum, Compound to name a few — that have billions of dollars of stored value. On the enterprise side, Hyperledger platforms have been used in production for a range of interesting use cases for a while now.

The field will continue to evolve, but, as a whole, blockchain has probably reached the level of maturity of the internet around when Amazon got started, if not further.

There is No Killer App for Blockchain

Which brings us back to the original question: What could a global, distributed ledger allow us to build?

I believe it would allow us to create collaboration on an unprecedented scale, across traditional national and industry boundaries and over long time horizons. And there’s no use case better suited, or more urgent, than climate change. Stay tuned.

About the author
Si Chen has been developing open source enterprise software since 2005.  He is a part of the Hyperledger Climate Action and Accounting Special Interest Group, which is working on using Hyperledger and blockchain to solve the climate change problem. 

Cover image: https://www.needpix.com/photo/1214471/blockchain-block-chain-technology-computer-symbol-network-connection-web