In mid 2017, we were presented with a problem and a solution. How could we differentiate our start-up’s product and solve some of the problems we were faced with in the patent process? The answer was exciting and interesting and came after substantial analysis: BLOCKCHAIN…
Its easy to say things like blockchain is just a buzzword or trendy technology (and it is), but it has become a focus for me in my drive to experience technology. More exciting announcements will follow that, but I was interviewed by an interested party who had some questions about blockchain technology, how we applied it at Loci and what my takes on the environment are. I want to include some of the text here, because I spent a LOT of time on it, here is my introduction:
I have been a technologist throughout my career with many years as a developer across industries from government consulting, industry, and non-profits. I moved into management and later joined the team at Loci to manage the development staff and helped design the solution that we have for patent searching and publishing ideas on the blockchain.
For me it’s about applying an up-and-coming technology such as blockchain to solve problems better than any other solutions. It’s also easy to sit here and say that blockchain is going to change the world but one must keep in mind that it’s not a panacea. What I’m seeing recently is that blockchain has the potential to impact many sectors and therefore it cannot be ignored. Most companies and the government are aware of and piloting blockchain technology. One panel I spoke on included folks from Homeland Security, Health and Human Services and the GSA, all discussing programs they are trying to implement blockchain to improve their existing processes.
When asked to summarize blockchain technology, this is what I said:
There is no greater buzzword in technology these days than blockchain. It seems that every company is talking about it and trying to figure out how it could be used in their systems, and I would argue rightly so.
Let me be clear about one thing, however, blockchain technology is not a panacea and should not always be used as a solution. With that being said, when blockchain is a fit, there is no other technology that can accomplish the same feats and that cannot be ignored. The key, as with any technological solution, is to define when it is the correct solution. Put simply, blockchain technology is at the very least an immutable, distributed database that allows for trust-less and decentralized transaction processing.
Let’s unpack that statement to see the value that a system like this can bring…
Immutable: it is theoretically impossible to change data on a blockchain, no other database or system can claim true immutability.
Distributed: there is no single server or server farm that contains the database meaning that it will continue to exist as long as the underlying system runs, i.e. the internet.
Trust-less: the transparent nature of the database ensures that transactions are proven correct and cannot be falsified, redacted or reversed. This allows for any two anonymous parties to conduct business and be sure that the transaction will go through.
Decentralized transaction processing: I grouped these together because this speaks to the distributed nature of the system, but its really about the transaction processing. Different blockchains have different mechanisms for transaction processing and consensus (the act of the network agreeing a transaction is valid), but the value to the network remains in its ability to conduct the same consistent transactions across the entire world.
This pile of buzzwords really just means that blockchains allow for pseudo-anonymous but completely final transactions across the world in a short period of time.
From there we went into cryptocurrency, ICOs and regulations, which has been a ton of fun to dig through for the past year, but I’ll save that for a future article… he then wanted to know about downsides of the technology.
I believe that blockchain technology is a game-changing technology that should be considered in certain use cases. It is not always a perfect solution, however, and that should always be considered when architecting a solution that may include blockchain. Understanding this is important to the application of the the technology for maximum benefit, and honestly that should always be the case for any solution design.
Blockchain, as I mentioned earlier, is a specific type of database with incredible power with its decentralization and immutability. The problem is that the power it has for these benefits leads to other drawbacks. Decentralization, for example, means that processing time is slow and has to be replicated across nodes. That leads to delays and wastage of energy to power the computations as they are completed and verified by lots of nodes simultaneously. It is wasteful, but it is replicated, which takes a long time and becomes immutable as a result. If your technological solution needs the replication and immutability, this tradeoff is acceptable, especially if you are not specifically responsible for the mining operation.
The other major drawback, which is actually inherent in the solution is that the code is immutable as well as the transactions. Specifically in the realm of smart contracts this is a double edged sword. Code in a contract cannot be changed which means that hackers or bad actors cannot corrupt it, but it means that any vulnerabilities that aren’t detected prior to deployment can have disastrous results without the ability to patch it. This has led to some fascinating situations like the DAO on the Ethereum network and the Parity wallet hack both of which affected millions of dollars worth of assets.
What I’m interested in here is really diving into how/when blockchain technology is the right solution for the problem at hand. I lived that with Loci and am now working through some advice and process that should be looked at when someone says “blockchain?”
I think the rush to try and apply blockchain technology to every problem led to some overeager technology staff trying to fit it where it didn’t necessarily belong (and on their resume!). There is no doubt that the technology itself also has to mature, but I believe that the benefits it can give are worth exploring now for most companies. The key is doing the correct analysis ahead of the pilot program to identify where the benefits and drawbacks fall.
well written!