The whole concept of a decentralized distributed database, a shared ledger, and a singleton computation framework makes Blockchain one of the most prominent technological discoveries of today. It is easy to relate Blockchain to Bitcoin as it was an early adopter and a starter for various organizations to conduct proof-of-concepts and build private networks of trusted transactions, and not to forget the Bitcoin miners.
I would like to cover two topics in this blog, firstly on the various types and characteristics of this framework and secondly on why Blockchain is a disruptor for not only the financial industry but for nearly all verticals. It is beyond cryptocurrency.
Let us look at few players in this space that I have seen since past few years. There is Hyperledger backed by Blythe Masters along with DTCC, SWIFT, IBM and Wells Fargo. Ethereum backed by JPMC, Chase, IBM, and Microsoft. There is Chain.com backed by Visa, Nasdaq, Citi, Capital One. Fiserv and Orange Silicon Valley, a Private Blockchain network with Gyft owned by First Data. R3 distributed ledgers for banks that leads a consortium of over 42 financial companies in research and development of Blockchain usage in the financial system.
Here are the components that make this architecture so unique. An identity platform to build and maintain the zero-knowledge trust for an entity – it can be a thing or a person; a distributed database holding ledgers, that is interoperable; security and privacy protocols, and a private key management system working as a peer-to-peer (p2p) system for discrete connections and access control between the zero-knowledge “things”. All components in this distributed technology are shared, transparent to everyone, and decentralized. The architecture will let devices communicate with each other, be accountable for security, and enable devices to make decisions that in the current world are manual and time-consuming processes.
This mix of technologies is ideal for application in Finance and numerous other areas such as Manufacturing, Banking, Insurance and Internet-of-Things (IoT). By creating a cross-industry open standard for distributed ledgers, virtually any digital exchange with value, such as real estate contracts, energy trades, marriage licenses, can be securely and cost-effectively be tracked and traded.
My first encounter with this technology was early this year when a highly qualified group of cryptographers, engineers, and data scientists requested my team to build them a prototype that could cater to multi-industry business use cases. The core was to prove “device democracy.” It was defined to me and my team as an ADEPT concept, an autonomous decentralized p2p telemetry system proving two features of Blockchain – proof-of-work and proof-of-stake. Yes, it was Greek to me then and for many, it is today as well.
So, what did we build for this smart group of people?
We narrowed down to a simpler use case that would register with our brains and more importantly with our clients. The use case was to build a private chain of devices connected to each other with an ability to conduct transactions based on a rule book (smart ledger). Once the use case was decided on, the next step was to map the right technologies to this. The choices were simple as our mantra was to keep it interoperable, easy to scale, cheap to setup, and open source. The result was a working platform combining various technologies, a month’s worth of work, 10 VM’s, and an Android mobile API. Our first scenarios run on this platform were IoT-driven, where devices could communicate with each other, encrypt the information and make decisions based on actions and pre-configured security threats.
You would wonder where is Big Data in this whole mix?
Well, it played an important role, and in fact, it will continue to play an important role going forward. The Big Data ecosystem is the brain behind many of these architectural components. For example, the identity platform is where machine learning helps make each identity unique in this world – Think of it beyond biometrics and password protection; it is about one’s social and living habits. Big Data ecosystem also helps model decisions on incoming transactions and voting algorithms. It is also important in situations where pattern analysis of usage is monitored for fraud, AML, and other security related activities.
The topic of Blockchain is not a simple one. Especially if you are trying to prove it beyond the usual “get rid of the middleman” use case. However, this architecture, if supported and implemented right has the potential to integrate deep into our daily lives making it much more comfortable and secure.
Below is a helpful list of roles and key required skills for a typical Blockchain venture, and talent that we constantly build in our practice.
Data Scientist – Ph.D. in Computer Science, Mathematics, or Statistics. Experience in machine learning algorithms using R, Scikit-learn, Weka, Theano, Torch, or Tensorflow. Experience with Python, Java, or C++.
Blockchain Engineer – Understanding of cryptographic principles, Bitcoin 2.0, Blockchain, zk-snarks, ring signatures, Ethereum, Multichain, Factom, NXT, Bitshares, BigchainDB, and smart contracts. Experience with Solidity, Java script, Python, C/C++, Ruby, and Scala. Experience deploying Big Data Stacks like Hadoop, Spark, Storm, Accumulo, and MongoDB.
Cryptographer – Expert in cryptographic algorithms and protocols. Understanding of standard and advanced cryptography, side-channel resistance, protocols, and applications. Ability to perform threat modeling and security requirements analysis.