Op Ed: Energizing the Blockchain — A Canadian Perspective

Jan 26, 2017
Original article published on bitcoinmagazine.com
Energy Bubble

Canada’s energy sector is facing a challenging economic environment. As in past commodity price cycles, innovation holds the promise of renewal.

Sharply lower energy commodity prices have dramatically compressed levels of upstream activity, employment and capital investment. Fundamental changes in commodity supply dynamics, climate change policy initiatives and pipeline constraints have contributed to a highly uncertain definition of “price” recovery.

World-leading innovation has always been a hallmark of our energy sector. Drilling technologies, seismic analysis, enhanced recovery and bitumen exploitation are some headline areas where our sector has revolutionized industry practices. The new economic challenges have sharpened the sector’s focus on driving operating efficiencies and cost reduction through innovation. Everything from new remote sensing to edge computing and from enhanced data analytics to cloud solutions are being evaluated and implemented to retool and re-cost the sector’s operating model. We’re seeing a lot of movement in the mining and energy sector demonstrating blockchain technology’s enormous potential to contribute to this retooling. This post aims to summarize these movements and demonstrate how blockchains can impact upstream and downstream operations.

Since its origin as the platform for Bitcoin, blockchain technology has emerged a potential disruptor for global financial services. With a projected industry savings of up to $20 billion by 2022 achieved through disintermediation and infrastructure efficiency, it is no surprise that 80 percent of the world’s largest banks will have initiated blockchain projects by the end of 2017. In capital markets alone, blockchain initiatives will have received as much as $1 billion in investment in 2016. The World Economic Forum has predicted that by 2027, 10 percent of global GDP will be transacted on a blockchain-based system. The financial services industry is taking this technology very seriously, and other industrial sectors are taking notice. Recent use cases for blockchain technology also show revolutionary promise in the area of supply chain management.

In the mining sector, the world’s largest mining firm by market value, BHP Billiton, announced in September 2016 that it plans to use blockchain technology to record movements of wellbore rock and fluid samples and to further secure the data that is transmitted during delivery. Mining companies coordinate with numerous vendors at nearly each step in the mining process. The effective coordination of these vendors is essential to drive key business decisions. At the Blockchain Summit in Shanghai, Tyler Smith, blockchain project manager at BHP, explained that with blockchain technology, data can be shared between the extraction rig, analysts, engineers and laboratories, creating accountability and a constant understanding of where a sample is; therefore replacing the current system in which samples worth up to $100 million are inefficiently tracked through email and spreadsheets. BHP plans to begin requiring vendors to use this technology to collect live data by the end of 2016.

As we move into automating the supply chain, one innovator in particular has focused on pairing blockchain technology with another emerging technology — the Internet of Things (IoT). Filament, a wireless network startup, is building what they believe is the next generation of industrial network technology. By pairing leading edge sensors with a decentralized network, powered with autonomous smart contracts, Filament is creating an industrial network where devices can securely communicate, exchange value and automatically execute actions.

Upon sensing that it requires a new key piece of machinery, based on predefined conditions, a remote drilling rig outfitted with Filament's “Tap” sensors could automatically ping an autonomous drone to deliver the replacement part to the remote location. As the number of connected devices exchanging value among themselves increases exponentially, this network with its consensus-driven ledger will become more powerful and more secure, enabling it to create the next generation of commerce.

Another innovator, Skuchain, based out of California, is seeking to upgrade the entire supply chain network by utilizing blockchain technology to facilitate document transfers and payments, while using smart contracts to automatically execute these functions. In essence, Skuchain envisions an interconnected supply chain where all parties transact on a shared ledger that can automatically execute functions based on predetermined conditions (for example, automatically sending funds upon the signal that goods have been received at their destination and have met the predetermined criteria).

We’ve discussed different ways parties in the supply chain can use blockchain technology; however, the front-end usability that connects the blockchain to the user is also crucial. For example, Factom, a blockchain startup focused on record management, has created a scalable layer on top of the Bitcoin blockchain to create “proof of existence” for all records placed on the network. Factom has partnered with financial institutions, legal firms and governments to explore the potential of immutable records management. This solution could be used for land registries, birth certificates, mortgages and invoices.

To illustrate the front-end simplicity of a document management blockchain solution, Deloitte Netherlands created a prototype that places warranties onto the blockchain. To enhance usability of such records management applications, a front end enables users to simply scan a QR code on the product warranty slip from within the Messenger app, using a chatbot to upload it onto the blockchain. Users can then interact with the chatbot to receive details about the warranty, find retailers to fix the product or transfer the warranty to a buyer. Imagine this simple, mobile user experience in place at each step in the supply chain, with each party uploading their data, documents and records into an immutable ledger.

As we move downstream, we see peer-to-peer markets popping up. For instance, a joint venture by ConsenSys and LO3 Energy dubbed the TransActive Grid illustrates blockchain technology’s potential for revolutionizing energy distribution grids. This grid platform enables homeowners with solar panels to sell surplus power on a local “Transactive Microgrid” peer-to-peer market. This market is built on existing utility infrastructure and future smart meters but introduces an integration with the Ethereum network. By using smart contracts run on Ethereum to tokenize surplus power, individual solar producers can sell surplus renewable energy directly to their neighbor, bypassing the markups and fees charged by their utility providers.

Proof of concepts (“POCs”) developed in partnership with international banks, multinational companies, governments and startups that are focused on solving supply chain inefficiencies are gaining traction and interest across the energy sector. These partnerships are essential to create value-driven prototyping efforts that can be effectively scaled into production.

Borrowing the lessons learned from the financial services industry’s foray into blockchain experimentation, in order to successfully identify initial high-value use cases and coordinate activities across multiple partners and intermediaries, blockchain education is an essential first step. Due to its nascent stage of development and technical complexity, the basic understanding of the applicability of blockchain technology is not yet mainstream.

If history can serve as an example, educational sessions with energy sector executives, supply chain leaders and industry associations to establish a common knowledge base of blockchain fundamentals will enable the discovery of well-defined use cases that address real business needs.

The next step in the innovation cycle is to develop a POC; through rapid development, iterations and failures, a robust prototype can be built to evaluate its effectiveness and feasibility as a solution. These POCs should be focused on solving problems that align with blockchain technology’s value proposition, and which can be built and tested rigorously in a low-risk environment, with the ultimate goal of moving from experimentation to meaningful pilots and eventual deployment in production environments.

For decades the Canadian energy sector has embraced technological innovation to improve cost structure, enhance extraction of reserves and increase corporate resilience. Blockchain technology has the potential to become the fundamental innovation that streamlines supply chain processes, executes contractual agreements, optimizes trade finance and powers autonomous commerce in the energy industry of the future.

Author
Sam Pajot-Phipps
Contributor: Iliana Oris Valiente

A Look at Blockchain Applications within Healthcare

January 19, 2016

With over a billion dollars in venture capital funding, blockchain technology has been regarded as the most disruptive technology since the Internet, as it has the potential to impact any industry that relies on trusted intermediaries. This includes the healthcare industry, and although the application of blockchain within healthcare has generated a huge amount of interest, there are many obstacles to success.

The application of blockchain to the healthcare industry could have significant outcomes:

  1. Health records will no longer need to be stored by health organizations, but can be controlled by individuals and distributed in real time to trusted parties
  2. Information silos will be removed as there will be a free flow of information between the multiple trusted healthcare stakeholders. All healthcare providers will have one reconciled version of the data – globally
  3. Information will no longer need to be manually transferred, but rather, will be automatically distributed to the predetermined trusted parties after specific conditions have been met

Ultimately, this results in improved quality of care provided to patients, reduced costs to store and reconcile patient information, improved visibility and trust between physicians and patients, and reduction in fraudulent transactions.

Vision for the Future of Healthcare

Here’s what it looks like: A patient visits her family doctor who recommends that she should see a specialist. A digital transaction of the referral is sent to the patient’s digital identity and the assigned specialist. After visiting the specialist, the patient confirms the transaction, and smart contract programming automatically updates the family doctor of the patient’s resulting medical condition, and confirms that the patient visited. It turns out that the patient needs prescription medication. A digital transaction of the prescription and number of renewals is sent to the patient and the pharmacist. After receiving the medication, smart contracts automatically tallies the number of remaining renewals, updates the relevant physicians, and sends the invoice to the relevant parties, including the patient’s insurance company or the government. All of these transactions occur in real time, in a secure and trusted environment.

Dissecting Blockchain

This use case demonstrates the potential of blockchain within healthcare, as patients take control of their own medical records, and conveniently transfer the records with trusted parties.

Benefits for the Healthcare Stakeholders

Patient
  • Patients will serve to see the greatest benefit as increased flow of health information will lead to improved quality of care
  • Increased convenience as appointments, referrals, and prescriptions will all be electronically stored
  • Patients can begin to aggregate their health, financial, and drug purchase data
  • Patients will also be able to control who their information is shared with
Physician
  • Increased trust in patient with improved visibility into patient history
  • Reduced burden and risk of storing data
  • Provide improved quality of healthcare, meeting key performance metrics
  • Ability to track referrals given and received
Pharmacy
  • Reduced cost to store and track patient information
  • Improved patient tracking
  • Efficient communication with physicians
  • Less fraudulent prescriptions filled
Insurance
  • Efficiencies realized through easy global transfer of payments
  • Secure tracking of transactions allows for improved visibility into delinquent payments
  • Less work required to check if claim is fraudulent

Barriers to implementation

In order for the vision of healthcare tomorrow to become a reality, multiple barriers need to be overcome.

Regulation

When innovations such as Uber occurred, the technology was implemented first, and then regulations were dealt with later. The healthcare industry does not operate in a similar fashion. Technology to be implemented within healthcare must first be approved by regulators to ensure issues around privacy, security, and mediating conflict can be handled. Since blockchain is fundamentally different to other forms of data distribution, it is important to make sure our laws reflect the principles of a protocol that allows free exchange of information.

Cost

Research suggests that other attempts made for the adoption of electronic health records by hospitals have failed primarily due to cost. In order for blockchain to be a part of the push towards electronic health records, the return on investment needs to be better quantified. This will be easier to do with an increase in adoption rates and the development of proof of concepts. While there is an increase in use of blockchain, it is within other industries, and so the healthcare industry may need to look outside traditional examples to see the value of blockchain.

Awareness

One challenge is that organizations within the healthcare industry are not aware of blockchain, or its potential benefits to their operations. Since the value of blockchain grows as more users and organizations participate, it is important for each stakeholder within the healthcare network to become aware of the blockchain advantages.

Culture of Resistance

The Canadian healthcare industry has traditionally been slow to adopt new technologies. Given the radical transformation blockchain technology offers by removing the central authority, it is expected that the technology will face resistance. It is important to address these concerns by showing how blockchain can be integrated into the healthcare process, without significantly impacting day to day operations.

These barriers are common to many industries looking to adopt blockchain technology, and yet, they have been overcome in the past. Indeed, the financial sector has gone through this cycle and many of the world’s largest financial institutions have adopted blockchain, including the second largest stock-exchange platform, Nasdaq.

Next Steps for the Healthcare Industry

In order to address the major barriers mentioned, key stakeholders need to be engaged.

Proof of Concept

Proof of concepts are integral to raising awareness and promoting the adoption of blockchain. These organization specific projects help to reveal the value an organization stands to gain, and helps other organizations see the potential use of the technology.

Get Patients Involved

Patients also need to get involved in the discussion, as they can help to align the multiple stakeholders. If patients actively voice their demand for a more electronic healthcare system, healthcare providers will be further incentivized to take action. Indeed, in a Canadian survey, 88% of participants agree with the implementation of EHR, and of those opposed, the primary concern was security, with increased patient control over data being the factor that makes patients more comfortable. Blockchain can help push forward the movement towards electronic health records by addressing some of these patient concerns, so it is important for patients to become aware of these new solutions in order to develop their opinions.

Effectively Engage Regulators

It is important for regulators to become aware of the technology, and its security benefits. This starts with open discussion regarding potential security concerns, and how they may be resolved. Regulators can look to other industries where blockchain is currently being used as guidance for how issues are resolved. By working with the regulators, it is possible to promote the added security benefits that blockchain has to offer.

Authors
Lisa Purdy, Deloitte
Daipayan Mukherjee, Deloitte
Farzad Tabaee, Deloitte
Iliana Oris Valiente, Rubix by Deloitte

Shanghai Chronicles

September 28, 2016 Ethereum, Shanghai, Devcon

Last week, Shanghai welcomed hundreds of blockchain professionals, investors, and hobbyists for International Blockchain Week. Monday through Wednesday saw Devcon 2, the Ethereum Developer conference. Thursday through Saturday then followed with the second annual Global Blockchain Summit, targeting the business of blockchain.

I was fortunate enough to make it to Shanghai late Sunday night, ready to see what the community had been up to since last Fall. The city looked alright. Shanghai Tower

Upon arriving at the Hyatt Monday morning, I found a line of ETH heads awaiting registration. Scanning the room for familiar faces, I came to the realization that I had finally reached a point in life where almost everyone around me was basically just a curious nerd at heart. Devcon Lineup

The grand ballroom was soon full of jet-lagged developers saturating the hotel's WiFi capacity. Introductions began, noting the absence of core developers working on a fix to geth's memory leak bug.

Around 10am, Pope Vitalik entered the room, describing a "5:30am military style wake up", with the news that geth clients around the world had been crashing. Soon enough, the talks commenced. I'll mention a few of my favourites, sparing many details that I'll reserve for more technical posts. Devcon Room

Regulatory Considerations for Dapp Developers

Peter Van Valkenburg started things off with his work at Coin Center towards educating regulators, developing policy reports, and the current legal landscape concerning Dapp developers and token distribution. Such warnings and tips on staying out of the grey area, to me, sounded something like "you're probably alright if you're not chasing money".

This was a nice way to start the conference, setting the tone to one of cooperation, safety, and education. These themes in fact dominated a number of sessions focused on formal verification and smart contract security.

Directions in Smart Contract Research

Philip Daian, a Ph.D student at IC3 discussed the academic climate of smart contracts. He proposed a strategy for the correctness of contracts with the use of formal verification methods, escape hatches, and bug bounties.

I hope to see more of this kind of academic rigour in Ethereum.

State Channels With Blockchain Applications

A state channel is a key scalability construct that serves to facilitate rapid off-chain transactions among groups of peers who so agree. Jeff Coleman

Jeff Coleman is actively researching state channels, their implementations, use cases, and problems. After outlining these in no more than 10 minutes, he walked through a comparison of Etherdice played on chain and off-chain.

After a long day, mingling, eating, and drinking promptly began. The view from the 32nd floor was magical. Shanghai View

-Mo ♥

(Supply + Block) chain: How can we apply it?

July 10,2016 Blockchain, Dapp Education

For those of you who missed it, the “Distributed: Trade” conference is a bellwether of what’s to come in the blockchain world. As far as I’ve seen, it’s the first event with an entire track dedicated to use cases outside of the financial services realm, where we’ve seen the majority of initial mainstream interest over the past few years. Rather, the conference focus was supply chain management and included panelists and speakers representing a cross-section of industries and a diverse array of business models. The attendees were also not the standard blockchain conference crew — beyond the industry insiders, there was healthy representation from incubators, academics, and industry leaders from the health care and pharmaceutical, natural resources, and finance world. And this is just the subset of groups that I had the opportunity to interact with in the short, but packed timeframe. Supply chain management has far reaching consequences, underpinning our modern day economy, and the diversity of thoughts and opinions represented at the event fuelled the many offline conversations taking place outside of the forums.

Although I could attempt a full recap of the event, it wouldn’t do the presenters justice. Rather, I’ve opted to highlight a handful of takeaways and include some personal insights on how blockchain technology will impact industries, FSI and beyond.

The day kicked off with a few general assembly sessions, before the agenda separated into two tracks: FSI and non-FSI. The panel sessions in the non-FSI track covered how blockchain is being applied to supply chain management and trade finance, as well as how businesses can integrate with blockchain technology.

Opening remarks came from the organizers, namely David Bailey, from BTC media, Atul Kamra from SixThirty, and Joe Reagan from the St. Louis Chamber of Commerce (yes, the conference was in St. louis — otherwise known as the “gateway to the west”).

To level-set for the audience, Jeff Garzik, from Bloq did a great job providing a simple and succinct overview of blockchain technology. For anyone in the audience that may have found themselves accidentally at a blockchain conference, while expecting a traditional supply chain conference, would have walked away after this session with a basic understanding of the subject to set the tone for the rest of the day. The stage was then passed to the Executive Director of the Hyperledger Project — Brian Behlendorf. Brian kicked us off with a few stories of the http protocol wars in the ’90s and TCIP history, drawing parallels to what he sees potentially occurring now, decades later, with a new crop of open source technologies. The Hyperledger project has generated significant buzz since its launch in 2015, yet the takeaway from the audience members heading into the conference was that very few understood what the project really is. Is it one infrastructure? Who is it built by? What are the projects within the Hyperledger project? What does it mean when it’s announced that one organization is a member of the project? Brian walked through the paradigms of working in an open source community and the challenges of incentives and alignment. With the backing of the Linux foundation, the Hyperledger project is hoping to introduce a guidance framework to the seemingly chaotic blockchain development world (essentially the overhead tasks done for the common good), while incubating individual projects such as Fabric and Sawtooth Lake.

For everyone who has been asking me for the summary notes of the keynote address I delivered before lunch, Pete Harris from the Distributed Ledger media team did a fantastic job in capturing and conveying the essence of the session. The link to the piece is here:https://godistributed.com/ledger/32/. Overall, my session focused on the intersection of inefficiencies and breakdowns across multiple value chains in the pharmaceutical supply chain industry, in parallel to the opportunities blockchain technology presents as a part of the solution. I also shared insights gleaned working with enterprise clients where we’ve built blockchain applications, from a cross-section of industries.

The afternoon sessions in particular were quite lively. One of the panels included Lamar Wilson, CEO of Fluent, Marc Christman from Commerce Bank, as well as Madhav Goparaju from EY, joined by David Gustin as a moderator. Lamar kicked it off with his world view of supply chain systems and inefficiencies and how that translated into the network his team is building around trade finance. If this event was more so similar to other panels I’ve seen, the banker in the group would typically be expected to cover the media-sanctioned topics from their PR team extolling the value add of the banks in any and all circumstances. It was a pleasant surprise when David broke that mold in very explicitly carving out where his employers had strengths and areas where the bank perhaps didn’t want to play. With the focus on the SME business portfolio, the presence of a blockchain start-up promising more efficiency in the antiquated trade finance process didn’t faze the Commerce bank representative.

In fact, Lamar’s comment that the Fluent network can be thought of as a waterway connecting business, and that the most progressive banks “will jump at the opportunity to become ports on the waterway” garnered some approving nods from the Commerce Bank Senior Vice President .

Madhav brought the perspective from the trade finance advisory angle, commenting on the potential for secondary markets in purchase orders across banks. Really the takeaway here seemed to be that networks players, including Fluent, are working to address some of the challenges in today’s systems and are looking for integration partners along the way, and the benefit to the integrated bank would be access to a new type of financing role that may not have been previously part of their mandate.

The following panel included demos by Dave Sutter, COO of Fluent, and Dominik Schiener, Cofounder of CargoChain and IOTA Foundation. The Fluent demo was fairly smooth — simple UI in a much more intuitive layout than the MS DOS-style interfaces often found in backrooms at companies everywhere. Dominik introduced the IOT trends he’s been tracking and the overlap in a blockchain world, highlighting that rather than human-to-machine interaction, we’re moving towards a world of machine-to-machine interactions. This reminded me of one of the demos from the hackathon that had wrapped up the previous day. The demo idea revolved around access to an autonomous shared vehicle that could ultimately interact with a lawn-mower, such that when the lawn-mower is done with your lawn, it can interface directly with a vehicle passing by to arrange its own transportation to the next closest home that has requested a service, all powered by a blockchain infrastructure for micro payments. We’re a ways-away from this world view, but Dominik was laying out the framework for the IOTA non-profit group to start driving this conversation, as well as shedding light on the Tangle technology they’ve built.

Wrapping up the day, the focus shifted to discussions of the increasing array of blockchain and smart contract products in the marketplace from start-ups, and how the established IT vendors are also getting involved with their own products and services. The start-ups pitched their supply chain solutions and some of the panelists shared their experience of introducing blockchain technology to their organizations. On the enterprise panel moderated by Joyce Shen, Director of Emerging Tech Partnerships & Investments at Thomson Reuters, the speakers frequently reiterated the need for established businesses to start contemplating how blockchain could be best integrated into any IT architectures that are relevant and are already in place.

There was no shortage of ideas and alternative approaches to supply chain innovation introduced in the structured agenda, from IOT and its impact on manufacturing, to the rise of power of consumers, with blockchain as an enabling technology. Not that it came as much of a surprise since there’s an opportunity to innovate from design to manufacturing to delivery to end consumers. Meanwhile, blockchain technology is poised to fundamentally change the way we interact with information and other parties.

At this intersection, I believe there’s a tremendous opportunity to tie the pieces together, connecting the dots between business requirements and emerging technologies.

As a caveat, I’ll be the first to point out that blockchain should be viewed as a piece of the overall technology puzzle, especially given the early stages of where the technology is on the maturity curve. With that said, I’m often asked what the killer app will be of today and tomorrow. My suggestion has been, and continues to be, to think longer term in how we can support the blockchain ecosystem, creating a feedback loop where business requirements can be relayed to the deep technology teams so that technology can advance and move forward in practicable ways.

Right now, we are in the early, hypothesis testing phase: small idea, leading to a hypothesis to test in an MVP (minimum viable product), incorporating learnings, and repeating the process iteratively.

Eventually, as the technology matures and scales, the mechanisms for blockchain technology adoption will adjust accordingly.

Ultimately, that’s what the Distributed: Trade conference was is meant to do — spur ideas, communication, and meaningful connections between a diverse set of people that perhaps wouldn’t cross paths in their day to day operations.

Yet it’s these collisions between technology and business that lead to the most meaningful breakthroughs.

With all of that, I’ve already blocked off my calendar for “Distributed: Health” edition set to take place on October 3rd! Will you be there?

-Iliana

When (not) to use a blockchain and the Dapp revolution

May 4, 2016 Blockchain, Dapp Framework

The original bitcoin blockchain was built to solve one problem: the creation and management of a digital currency without oversight by a central body. Since then, individuals and businesses have realized that a blockchain can be used to solve a wide variety of problems, with implications far beyond those introduced by Satoshi Nakamoto in 2008.

Criteria to think about before starting a blockchain project

There are elements of certain solutions that lend themselves to blockchain implementation; here are some of them:

A Trustless Network

Does your problem include many stakeholders who all operate in their own best interest? Usually situations like these require a central body managing the system, and the other members trusting it to uphold the integrity of the network. With a blockchain it’s easy to manage a trustless system between members where agreements are all coded in smart contracts, and the integrity of the ledger is maintained.

Asset Management

Does your problem include the management and exchange of assets? Blockchains lend themselves to managing a ledger that stores exact data about who owns what, so double-spending or counterfeiting are impossible from the outset.

Data Storage

Does your problem involve storing data without interruption, while limiting the ability for users to change any past data? Blockchains store data immutably, meaning that once a block has been validated, the transactions and contracts that are inside of it cannot be changed.

Predicatable Code

Does your problem involve agreements between users, or opaque background processes that would benefit from additional transparency? Typically the code that’s run on a server or in an app is hidden from its end user, but with Smart Contracts it’s possible to read and verify the code before you use it, ensuring it does exactly what you expect; and nothing else. Dapps – what has been done and what’s in progress

The Dapp market is diverse … as it should be since no two problems are the same! Here are some of the distributed applications people are currently building:

Distributed Organizations: True democracy is only possible when members are certain that everyone’s vote was counted, and never more than once. Smart contracts enable members to create new laws or rules that other members can agree with, and their public nature ensures voter fraud or manipulation is impossible.

Smart Devices: Your 21st century dog bowl notices that it’s out of food, and automatically orders some from your favourite online retailer. This is possible through internet enabled devices and smart contracts, which can automatically feed data into the blockchain and make predictable decisions based on the data.

Digital Asset Storage: With blockchains it’s possible to store copies of your files on a blockchain, which leverages its immutable properties to ensure its long-term integrity. This is useful for content creators to prove that their original work on a certain point in time, or to store the files without fear of their loss (as a backup).

Gambling: From rock-paper-scissors to 5 card poker, people have deployed smart contracts that allow users to play money-based games while removing their ability to cheat. Since the rules of the game can be encoded for all members to verify, you can be sure that no intermediary gets a cut of your winnings.

Smart contracts that live on the blockchain enable developers to create more technically efficient versions of solutions that already exist right now. Most of the examples above are in this domain, and are the logical first step whenever a new technology is introduced. The next step will be figuring out what can’t be done without the blockchain. This domain is small but growing, and we’re excited to see what the community comes up with in the next few years.

-Mark B

Blockchain: a view from the trenches

April 29, 2016 Blockchain, Education

As of April 2016, there are over 250 blockchain companies globally with $1+ Billion USD in cumulative investments. It goes without saying that blockchain is a hot topic in the tech world and for good reason— it’s a game changer. We’ve spent a lot of time thinking about this technology and helping our enterprise clients make sense of this space and how applies to them. Here are the cliff notes.

What is blockchain?

To put it simply, blockchain is a digital ledger that can be shared publicly (or not!). It can be imagined as an Excel spreadsheet shared on the Internet; but entries can’t be deleted, only added. Each entry in this spreadsheet is essentially a transaction with four pieces of information:

  • Sender- this is represented by an address which looks like this: 13hgurVQ1rcawJK3NMjEfhQGh5egy653MS
  • Recipient – represented by an address in same style as sender’s
  • Amount – this is measured as a unit of the relevant cryptocurrency (eg. Bitcoin, Ether, etc.)
  • Message – a small message corresponding to the transaction

Transactions are bundled by the network participants, also called nodes, into blocks and then computing power is used to solve a mathematical equation in order to validate and add this bundle of transactions to the chain— hence, blockchain. Once a transaction is validated and relayed, identical copies of the ledger are maintained by each node. Each entry is time stamped, immutable, and due to the consensus required in the network, the transactions are accurate.

How does bitcoin fit in with talk of multiple protocols?

First, there’s Bitcoin and then there’s bitcoin— the former is the computer protocol and the latter is the cryptocurrency. Blockchain infrastructures are built on a protocol, either Bitcoin or a new alternative protocol such as Ethereum. Ethereum is news worthy since they’ve introduced the ability to execute turing-complete smart contracts, in addition to the distributed network functionality introduced by Bitcoin. Rubix is actually built to be Ethereum compatible.

Smart contracts are something that I personally find the most fascinating about blockchain. Smart contracts are essentially self-executing applications that will make the network do one thing if a triggering event occurs. For example, I can write into a smart contract code a trigger event that if you send me a token that represents ownership of a vehicle, then I will transfer you payment (via a coin wallet). This is a simple demonstration of smart contracts in action. Smart contracts are being developed to handle some very complex transactions; such as, calling on future contracts on crop yields based on weather forecasts. In brief, smart contracts are applications that allow for if/then transactions to occur between nodes or individuals on the network.

In a public blockchain network, like the Bitcoin network or on Ethereum, any node can participate. However, now with large corporations and governments using blockchain technology, there’s a need to support the unique needs of consortium and enterprise-specific blockchains. Consortium blockchains, like R3CEV, are most useful when an industry is better off working as a well-oiled machine rather than silos. With R3CEV, over 40 of the world’s largest financial institutions are collaborating to participate in a single blockchain network to enable faster, and theoretically less costly, interactions. Similarly, enterprise-specific blockchains can be used to streamline operations, like inter-firm billing within an organization or data management of personal identity.

Can blockchain be applied to everything?

Yes, and no. We have a running joke in the office where someone will raise a mundane concern like “how do we solve world hunger?” and someone else will answer “blockchain.” This is a joke— although blockchain can be used in virtually anything; we believe that the full value of the technology can be exploited when it is used under certain conditions. The details of these conditions will be discussed in a future post.

The year 2016 will be seeing many consortium and enterprise-specific blockchain trials to put the technology to the test. Blockchain has been referenced as having an impact just as great, if not greater, than the Internet. The technology is still immature for large-scale projects but we at Rubix are very excited to contribute to the industry to enable its potential to be a bigger game-changer than the Internet.

-Mawadda B.

Kicking this off!

April 22, 2016

Welcome to our blog!

Over the coming weeks and months, we’ll use this forum to tell you about ourselves, and to share some of our thoughts on the exciting growth happening during this “Blockchain Revolution” we’re experiencing (looking forward to the Tapscott book coming soon!), and we’ll share some of the thinking that is going into our product, and our vision.

Our team, who you’ll meet individually in subsequent posts, can easily be described as a bunch of blockchain fanatics! From our students, to our engineers, to the laymans on the team like me, we all share a genuine passion for this technology, and for the transformative potential it represents.

Being from Toronto, we consider ourselves extremely fortunate to share origins with some of the great blockchain pioneers we all know and respect. We are constantly inspired by the people around us in this community, and we simply strive to do our part.

Rubix was born out of necessity. Necessity to challenge our own status quo. Necessity to fill a gap in the market. And necessity to be part of the change happening in the world.

Deloitte, our “mother ship”, has been a tremendous enabler of what we do, and we’re very thankful for the foresight they’ve shown on this topic. Alongside our Deloitte colleagues around the world, we are bringing to life game changing applications built on robust technology, and we couldn’t be more excited about how it’s all working out.

Talk to you soon.

- Matt