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Exclusive: How Significant is Consensus As-a-service Model?

While Amazon and Microsoft launched the blockchain-as-a-service (BaaS) platform in 1H 2019, Hedera Hashgraph collaborated with IBM to launch a consensus as-a-service model. Is this the next upcoming tech trend for giants to follow?

Sami Mian, Head of Korea, and Japan of Hedera Hashgraph revealed the significance of the consensus as-a-service model! He also explained the consensus algorithm of Hedera Hashgraph and taught us a lesson comparing BFT and aBFT!

Readers are very interested in the collaboration between Hedera Hashgraph with IBM on the consensus as a service model. Can you talk more on this model and how does will transform the development of blockchain?

Hedera Hashgraph joined Hyperledger. We co-authored a whitepaper with IBM and released it in June. We’ve announced a fourth service on the Hedera Hashgraph platform. We had three services before, one was a cryptocurrency service supporting micro-payments. The other was a smart contract using the solidity coding language. Then the third one was file service.

We announced the fourth service called consensus as a service.

Essentially, we’re providing solution for centralized applications or applications built on private ledgers to have the benefit of decentralization.

Imagine you build an application on Hyperledger like Japanese and Korean companies. They’re building applications or proof of concepts on the private ledger. Companies want the privacy of a private ledger in which the data is not available on public ledgers. They have applications or proof of concept (POC), they are building already on Hyperledger. However, they want the benefit of a public ledger which is trust. In public blockchains, nodes are not only run by selected number of people. We heard from the market that they want the benefits of both and they want to run private applications. They want to run applications in a private ledger, but at the same time, they want to gain the trust element from the public ledger. We have a Hedera API. We’re going to allow Hyperledger applications to plug into our consensus as a service and decentralize their trust. You get the best of both worlds.

With regard to the Hedera Hashgraph mechanism, how does the no forking mechanism in Hedera Hashgraph work?

Hashgraph consensus algorithm is a patented algorithm. Dr. Leemon Baird invented the Hashgraph algorithm in 2015. A lot of people asked us why our platform isn’t open-sourced? Because we think stability is very important for the market. Stability means that we think the public platforms should not be allowed to fork. That’s because we’re an enterprise-grade platform.

If a company spends millions of dollars building a decentralized application, then we want that company to not be afraid of the platform itself forks. For example, if you have real estate being tokenized on the public platform and the public platform itself forks, then we don’t know whether the value should be doubled? Is it on one platform or both platforms? It causes a lot of instability. One way that we’re going to disallow forking is through our legal means, which is the patent of the Hashgraph algorithm.

Another way is what we call state proof. State proof is a mechanism that allows the community and the users to identify which ledger is the real ledger. Let’s say, Hedera Beta forked Ledger comes to the market. Then we have a mechanism called state proof that can tell everybody in the world that this is the real ledger, as opposed to the forked ledger.

Hedera Hashgraph began phase two of its community testing on the micro-payment. When would you expect the micro-payment will become a reality and which industry would benefit the most from this?

Micro-payment is one of the value propositions of Hedera, meaning being able to transfer less than a cent of value at hundreds of thousands of transactions per second (TPS) with finality. Up until now, traditional banking industries are not able to do that, because it costs way more to send it. You can’t send a cent in Bitcoin or Ethereum because of gas costs and miners.

Hashgraph allows microtransactions. The biggest use case in micro-transactions is definitely e-Commerce. All the transactions on the internet today are the most important use case. For example, you listen to one second of music, you pay 0.1 cents. For any IoT applications, you consume a little bit of data. For that data, you provide a little bit of value. Facebook came up with this Libra token. Presumably, they will start to pay people to watch their ads using the Libra token. That’s another way the micro-transactions can disseminate the internet. Anything of value whether it’s small pieces of data, two seconds of music, personal information, or putting a value on your identity, you can use microtransactions.

How Hedera Hashgraph will differentiate itself from the existing competitors in public blockchain like Conflux Chain, Algorand, and DFINITY?

The biggest difference between Hedera Hashgraph and everybody else is our split governance model. We have permissioned governance that is provided by the most trusted companies in the world and term-limited. We’re trying to build an enterprise-grade platform that is governed by experts. Yet we provide open consensus at the same time. You have the best of both worlds, the best of permissioned networks and permissionless networks. This is something that we believe no other platform has.

On top of that, we have the Hashgraph consensus algorithm. Now Hashgraph is tech-wise different to any other algorithm by miles, with hundreds of thousands of TPS, latency is three to seven seconds with finality. In terms of security, we have a feature called asynchronous Byzantine Fault Tolerance (aBFT). Facebook is BFT so they’re not aBFT.

What’s the difference between BFT and aBFT?

Because of Libra, now people know what the word BFT is. It basically means that you can reach consensus even when they’re up to one-third malicious nodes. But BFT has vulnerabilities such as distributed denial-of-service (DDoS) attacks. aBFT provides strong assurances against certain classes of attacks, like DDoS attacks. Because each node comes to consensus independently of other nodes. You don’t necessarily need to sync. to come to a consensus, and that’s the difference between BFT and aBFT.

In terms of the blockchain revolution, Hedera Hashgraph refers to itself as the fourth generation of blockchain. Can you share with us the evolution of blockchain, and what are the elements for the fourth generation of blockchain at Hedera?

First, you had Bitcoin. People were like this is fantastic, we can transfer value. The second generation is blockchain which facilitates value transfer. People started to build a lot of stuff using blockchain as the underlying consensus algorithm.

The third generation is smart contracts. When Ethereum came out, people started to build smart contracts on it, programs that automatically run. But you still had the problem of not being able to order transactions in a completely decentralized and fairway. You still had the problem of not being able to create markets. Because a market is essentially where two people transact scarce resources. For example, in a stock market, it’s very important to know which person bought which asset first. You need to order the transactions and auctions are the same. There are many use cases that are not possible to build on existing blockchain platforms. Because there is no fair ordering, and up until third-generation technologies. We call Hedera Hashgraph the fourth generation DLT because it provides the fair ordering capability that allows markets to be built upon the platform.

Exclusive: Blockchain at the Stage of Tech Convergence

Exclusive interview with Paul Sin: Part 2

How does Deloitte Blockchain Lab envision the future of blockchain? Dr. Paul Sin believes that blockchain is at the stage of technology convergence with IoT, big data and artificial intelligence. He also explained the three challenges for enterprises to implement their own blockchain and various blockchain auditing services offered by Deloitte.

From your experience, what are the pain points for enterprises in implementing their own blockchain?

Since these are enterprise permissioned blockchains, one of the challenges is the commercial model. We need to figure out how these people share the cost of the platform. Going forward, [we need to look at] how they can recover their investments.

The second challenge is regulatory concerns, we need to comply with all the different regulations such as the GDPR in Europe, China’s cybersecurity law, Hong Kong’s PDPO. Liability issues are also a concern. If you are creating a KYC network, for example, if Bank A opens an account for terrorists and Bank B finances the terrorists based on the records from Bank A, who will bear the liability for terrorist financing? This will also be something we will need to sort out. We classify these problems as the governance model.

The third challenge will be the interoperability of the technologies being used by more than 20 platforms on trade finance and supply chain across the world that are in production. You need to exchange data across different distributed ledger technologies, you need to interoperate on Corda, Hyperledger, Ethereum, and also connect the Internet of Things (IoT) with blockchain so that the physical products can be linked to the digital record of the blockchain. You also need to create advanced analytics models that will make use of the data on the blockchain. There is a lot of technology convergence happening at the moment in the market. This is a challenge but also an interesting part of the technology.

Which blockchain-as-a-service (BaaS) platforms are the most popular from your experience working with enterprises, and what are the reasons behind choosing them?

We generally recommend open-source platforms for our clients because it enhances adoption. Even though we deploy blockchain on hybrid cloud infrastructure, we try not to use managed blockchain services unless they are truly open. Some cloud providers have BaaS with open-source technology; those would be the ones we are more comfortable working with. Some blockchain services providing blockchain on a proprietary platform—if one party is on that platform, the whole ecosystem must be using that vendor—those are not recommended. If you see some corporations working with certain well-known vendors who provide proprietary managed blockchain on the cloud, they will have a lot of challenges with adoption. A corporation may find that only they are on the blockchain and no other corporations are willing to join, mostly because the platform is proprietary. This is the reason why it is not attractive from the perspective of supporting the whole ecosystem.

From a corporate perspective, it can certainly save time developing and deploying the technology, so using blockchain managed by the cloud is understandable.

How do you envision the future of blockchain and what is your outlook for enterprise blockchain adoption?

We are now getting to the stage of convergence, as I mentioned earlier, it is now feasible to exchange data with each other without compromising on the authenticity and authorization mechanism. We are also working on technology convergence, where IoT puts data on the blockchain to share among exclusive members, we create a big data pool for the whole ecosystem and we run AI engines on top of that to create insights for analytics. This is what we are working on at the moment.

Other Big Four auditing firms—PwC, KPMG, EY— have launched blockchain auditing services. Does Deloitte have blockchain auditing services currently?

Yes, we have blockchain auditing services. Blockchain auditing is a very confusing term, there are different kinds of blockchain auditing. If a company has certain assets, stored in a crypto format, you will need financial auditing, which is a kind of blockchain auditing. There are also ICOs, STOs, stablecoin issuances, etc., and those need audit firms to audit liquidity, for example. We also conduct IT audits for blockchain platforms, to make sure they are not breaching any technology risks or guidelines, from regulators as well as data privacy auditors.

What are your views on consensus as a service?

I believe this is more for public blockchains because in public blockchains, consensus is very resource-consuming, and it does not make sense to build ASIC server farms in order to create consensus. For permissioned blockchains that we use, the underlying consensus mechanism is very light in terms of power consumption. Many new permissioned blockchains support plug-and-play consensus mechanisms, all of which are open-source, and do not need to do any outsourcing for them.

Microsoft Azure Integrates Lition Commercial Blockchain into Cloud Marketplace

Lition, a commercial blockchain has been integrated into the Microsoft Azure cloud marketplace to provide blockchain as a service (BaaS) solutions. With the announcement made on Feb. 18, Lition becomes one of the few public/private blockchains to receive support from a major cloud provider.

According to the announcement, the integration of the Lition blockchain into the Azure marketplace allows Microsoft Azure’s clients to easily develop, test and deploy Lition side chains and applications on the cloud platform.

Dr. Richard Lohwasser, CEO, Lition said, “Lition is committed to providing an accessible onramp to blockchain for all organizations. We believe that making integration as seamless as possible is vital to bridging the gap to adoption. Azure will be a tremendous asset for our customers. We are excited to bring Lition to their marketplace and show people just how easy it is to put blockchain to work for their business.”

Microsoft Continues Push for Blockchain Innovation

The addition of Lition also demonstrates a continued push for innovation by Microsoft. Last year the technology giant became the first company to bring blockchain to the cloud.

In an interview with Blockchain.News, Saranya Sriram, the Head Cloud Solution Architect at Microsoft Azure, described Azure’s blockchain services as the ‘core team.’ She said, “They’ve come up with about two or three layers. The way I like to unpack it is that you can build blockchain solutions by setting up your own nodes and create virtual machines as well. That’s the infrastructure as a service, and we have Ethereum private blockchain available as well.”

In the Asia Pacific region, there are developed markets as well as developing countries; therefore, there is an interesting mix. “There are markets, which are very open-source focused such as Korea. Fundamentally, the easiest way to move to Azure is infrastructure as a service (IaaS), which means core network storage and compute, our main,’ explained Sriram. She added that the company is increasingly seeing more requests for developer API access services, including authentication and identity, which seems to be very critical. Microsoft Azure’s DevOps toolchain is very integrated and has the ability to be on Windows and Linux operating systems. It can be an open-source for Dotnet developers, as well.

As blockchain is still very new in the enterprise space, Sriram said that there had been a lot of interest for Fortune 500 companies to start using their technology but development is still a challenge in this nascent sector. “With production, commitment, and deployment – if that’s not done at the level expected by these companies, then there’s going to be a lot of challenges,” explained Sriram. “First and foremost, we need to be able to prioritize those challenges to say what Microsoft needs to ship first. That can happen when there are a lot of production deployments on a massive scale.” To properly understand the feedback, Sriram suggested that this may take some time for Azure to prioritize and start building. Currently, Azure supports JP Morgan Quorum as well as R3 Corda.

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Allied Market Research: Blockchain Identity Management Will be a $11.46 Billion Market by 2026

Allied Market Research, a US-based research and advisory company, has reported that the worldwide blockchain identity management sector will escalate to $11.46 billion by 2026 from the $107 million recorded in 2018. According to the release shared with Blockchain.News, this will represent a compound annual growth rate (CAGR) of 79.2% because as blockchain are able to offer an immutable, interoperable, and unified infrastructure needed in the storage of digital identities.

Urge for transparent transactions

The report notes that retail industries have a growing appetite for reliability, authenticity, quality, and product safety, as this propels the realization of the set objectives. Identity management is crucial in the present internet drive economy, and blockchain-based solutions are proving to be a game-changer because of transparent and tamper-proof transactions.

As a result, the urge for transparency is stipulated to be the key factor driving the market growth in the blockchain identity management industry. Furthermore, the rapidly changing international trade and retail sector is speculated to offer a stepping stone to notable players in this sector.

Large enterprises are expected to rule the roost in this sector during the forecast period. Still, small & medium enterprises (SMEs) will have the fastest CAGR of 85.7% throughout the estimated time.

Identity theft is a problem that is rising at an alarming rate across the globe. Blockchain identity management solutions are expected to be embraced by retail businesses, healthcare organizations, and banks, among others, in curbing this menace.

Proliferation of E-Commerce

An increase in the demand for secure solutions, as well as escalation of E-Commerce, are anticipated to fuel growth in the blockchain identity management industry. The report also attests that the rise in government-based blockchain initiatives will be instrumental in its development.

Furthermore, elevated transaction and scalability speed is speculated to be another significant boost in upcoming years. Nevertheless, the lack of awareness pertaining to blockchain technology is anticipated to impede market growth during the estimated period.

On the other hand, recent research showed that the blockchain-as-a-service (BaaS) market is anticipated to skyrocket to $24 billion by 2027.

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Block.one Launches EOSIO for Business as PwC Makes $1.76T 2030 Blockchain GDP Prediction

Block.one today announced a new suite of enterprise service offerings designed to help organizations integrate blockchain-based solutions into their operations. The announcement comes following a recent PwC report that predicts blockchain has the potential to boost global gross domestic product (GDP) by $1.76 trillion.

According to an email shared with Blockchain.News, the four new offerings will leverage Block.one’s performance-focused EOSIO software and will include Blockchain-as-a-Service (BaaS), consulting, technical support, and training and certification programs.

PwC Predicts Huge Growth For Blockchain

While blockchain is most known as the underlying infrastructure supporting cryptocurrencies, PwC experts reviewed other key advantages of the distributed ledger technology (DLT).

Five case scenarios in which blockchain could be used to drive the digital revolution forward included provenance – the tracking and tracing of products and services – payments and financial services, identity management, and the application of blockchain in contracts and dispute resolution as well as customer engagement.

Speaking about the potential ways blockchain technology could be used, Steve Davies, a Partner and Blockchain Leader at PwC UK, said:

“Blockchain technology has long been associated with cryptocurrencies such as Bitcoin, but there is so much more that it has to offer, particularly in how public and private organisations secure, share and use data.”

The analysis evaluated blockchain technology’s potential across different industries, from healthcare, government and public services to finance, logistics, retail, and more.

According to PwC analysts, Asia stands to reap the most economic benefits from blockchain technology over other continents.

In terms of countries, China and the US were designated as the ones that could potentially gain the highest net benefits from blockchain, estimated at $440 billion and $407 billion respectively, according to data from PwC. The net benefits of five countries, notably Germany, Japan, the UK, France, and India were also calculated to surpass $50 billion.

Overall, across all sectors, the public administration, healthcare, and education industry appears to be the biggest beneficiaries, with PwC expecting them to gain approximately $574 billion by 2030 through using blockchain for identity and credentials.

Blockchain Enterprise Entrance

As enterprise digital transformation continues to drive corporate growth, organizations are exploring blockchain-based solutions for more reliable, secure and transparent data infrastructure.

The accelerated interest and adoption of the technology has left a growing gap in both technical expertise and resources needed to effectively incorporate blockchain solutions. Block.one’s EOSIO for Business is focused on closing this gap with simple yet powerful solutions.

Block.one Chief Operating Officer Ted Cahall:

“Despite knowing the inherent benefits that blockchain will deliver to their business operations, many in-house product engineering teams are wary of the complexity involved in setting up and administering their own blockchain […] Our EOSIO for Business customers will be able to work directly with EOSIO experts to ensure that their implementations seamlessly integrate with existing technology, and they will also have exclusive access to the newest EOSIO features and upgrades – all of which will enable in-house teams to focus on other business priorities while still benefiting from the reliability and security of their new blockchain systems.”

The four major components of EOSIO for Business include:

EOSIO Premier Technical Support: Enables companies to easily identify support tiers that suit their needs in outsourcing troubleshooting and technical assistance in order to launch and maintain operations for an EOSIO implementation.
EOSIO BaaS: An automated blockchain platform, fully managed by Block.one, allows companies to leverage blockchain technology without having to dedicate internal resources to ongoing maintenance.
EOSIO Consulting: Offers direct access to EOSIO engineers to empower developers to better identify, architecture, and implement solutions through first-hand exposure on how to design and implement EOSIO smart contracts.
EOSIO Training and Certification: Comprehensive courses covering the foundations of EOSIO including smart contract programming, auditing and the best security practices for integrations.

Clients are already benefiting from Block.one’s enterprise support. Mythical Games, the game technology studio on the Forbes “Disruptive Technology Companies to watch” list, uses EOSIO for Business services to create digital ecosystems around player-owned economies.

Rudy Koch, Co-founder and SVP of Business Development at Mythical Games said:

“At Mythical, we are redefining game economies and creating new revenue opportunities by putting more power and ownership in the hands of players and content creators […] EOSIO is an integral part of our efforts. Leveraging Block.one’s EOSIO BaaS service enables us to continue delivering world-class game technology products to our players and partners.”

BaaS Startup Domineum to Train 100k Nigerian Students in Blockchain Solutions

Domineum, a London-based Blockchain-as-a-Service (BaaS) startup, is set to train as many as 100,000 students under the umbrella of the Nigeria Association of Computing Students (NACOS) in blockchain and emerging technologies.

As announced, the partnership seeks to ensure the youths, which are considered the future leaders in digital technologies, gain the adequate skills they need to be changemakers and contribute their quota to the Nigerian economy.

Africa has often been seen as an untapped region when it comes to blockchain-related initiatives. While the region is known as a major hub in terms of the growth and adoption of blockchain-related innovations.

When it comes to crypto trading activities, Nigeria has consistently been ranked above a number of other African countries, as well as emerging countries in other parts of the world. The move from Domineum to train budding professionals will seek to bridge the gap in what Nigeria currently lacks and what it needs to stay well visible on the radar as one of the most renowned crypto hotspots in the world.

“The NACOS / DOMINEUM partnership is a strategic collaboration that will bring a significant change to all students studying computer-related courses in tertiary institutions across Nigeria,” said Geoffrey Weli-Wosu, Chief Executive Officer of Domineum Blockchain Solutions, adding that “Youths hold the future of IT in Nigeria, and it is paramount that they should be invested in and supported with the necessary resources, connections, and opportunities to excel.”

Crypto and blockchain-related education account for one of the most proactive ways to build capacity in the nascent ecosystem and empower the next generation of developers. Stakeholders in the crypto world, including exchanges and Layer-1 and 2 protocols, are investing heavily in blockchain-related education.

Thus far, most of these programs have led to a series of hackathons from which innovative projects serving the broader crypto ecosystem have emerged.

Blockchain Infrastructure Provider Tatum Secures $41.5M Funding

Blockchain as a Service (BaaS) provider, Tatum has landed $41.5 million in funding, receiving the needed capital backing to expand its business offerings.

Riding on its current track record in the industry, Tatum’s funding was led by Equity Partners with support from other renowned venture firms including Octopus Ventures, 3VC, Tensor Ventures, Depo Ventures, Leadblock Fund, Circle, and founders of Bitpanda.

The startup’s valuation was undisclosed, however, judging by the current adoption level of its offering, Tatum has undoubtedly carved a niche for itself in the blockchain world. The platform helps developers cut down the time, and complications and to shorten the time with which they develop and launch new blockchain applications.

The simplification solution provided by Tatum is currently being used by 90,000 clients and the firm said it gets an average of 7000 new clients per month.

“Blockchain has proven essential to the explosive growth and broad innovation of digital finance and Web 3.0,” said Jiri Kobelka, co-founder and chief executive officer, Tatum. “Tatum is the first company to squarely address the complexities, necessary technological expertise, and lengthy development times that blockchain applications require. We have revolutionized blockchain application creation by slashing development times from months or years of engineering time down to just days.”

With the new capital injection, Tatum said it will place additional focus on its marketing, educational focus, and the building of its community. The startup will also seek to build new capacities as it was able to complete its platform when it previously secured $8 million in funding from investors.

With more developers making their way into the Web3.0 ecosystem, the role being assumed by Tatum is becoming a major consideration for most innovators. In all, Tatum seeks to use the capital boost to keep being the go-to platform for both Fortune 500 companies and startups looking to make their way into the Web3.0 world.

BaaS to Boost Blockchain Adoption in the Healthcare Market, Study Shows

The enhanced adoption of blockchain as a service (BaaS) is anticipated to boost the blockchain in the healthcare market, according to a report by Research and Markets.

Since BaaS entails third-party management and the creation of cloud-based networks needed to build blockchain applications, it seeks to render better scalability, access controls, and customizability in the healthcare sector.

BaaS is one of the key factors expected to push the value of the blockchain in the healthcare market to $4.46 billion in 2026, making a compound annual growth rate (CAGR) of 38.1%.

Furthermore, the different deployment types, like cloud-based and on-premise, are expected to revamp healthcare’s billing management, claims adjudication, interoperability, clinical data exchange, and supply chain management.

Per the report:

“Blockchain technology can provide innovative solutions to the challenges faced by the healthcare industry which include supply chain management, smart contracts, the confidentiality of personal health information, technical issues in data management, enabling alternative payment models, and virus outbreak tracking.”

For instance, Moderna deployed IBM’s blockchain and artificial intelligence to get real-time tracking of Covid-19 vaccination in March 2021. This helped mitigate supply chain disruptions.

The study added:

“In March 2019, Embleema, a healthcare blockchain network provider announced a partnership with Gustave Roussy Institute to apply blockchain technology to integrate, store health data, and data sharing applications for oncology clinical research in Gustave Roussy Institute.”

Therefore, Research and Markets expects BaaS to propel the growth of the blockchain in the healthcare market. Some of the key players in this sector include Microsoft Corporation, IBM Corporation, iSolve, FarmaTrust, and MedicalChain.

Meanwhile, a past study by Market Research Future (MRFR) revealed that the mounting need to tackle data breaches and information leaks would thrust blockchain use in the healthcare sector, Blockchain.News reported.