Blockchain

The Blockchain Milestone You May Have Missed

Noelle Acheson is a 10-year veteran of company analysis, corporate finance and fund management, and a member of CoinDesk’s product team.

The following commentary originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.

Amidst the fanfare of the release of R3’s Corda distributed ledger code, another milestone slipped by almost unnoticed – Hyperledger surpassed 100 members.

On its own, the news isn’t that important – 100 is, after all, just a number. But combine the two reports, and you unearth a development that could define the future of blockchain.

Hyperledger was created a year ago as a unifying “umbrella” for enterprise blockchain open-source development. Among the participants are blockchain companies (including R3), financial institutions and tech giants.

Its approach so far has been a mix of fusion and fragmentation. The blockchain Fabric was created by blending submissions from founding members IBM and Digital Asset to create a flexible enterprise solution. Hyperledger’s explorer tool is the result of combining code from DTCC, IBM and Intel projects.

At the same time as it became open-source, Corda was submitted to Hyperledger, where it will join Fabric, Intel’s Sawtooth and other protocols. Each runs differently, and while all are designed to work with financial transactions, each was created with different criteria in mind.

So it’s logical to wonder whether Hyperledger will apply the unification or fragmentation approach to its newest submission.

Will Corda be incorporated into Fabric or Sawtooth? Or will “components” be stripped out to interact with other solutions?

Scattered clues

To see where this could go, we need to step back and look at the open-source business model.

R3 is a for-profit consortium (currently undergoing a financing round) that has open-sourced one of its main technology assets. Why? To expand its ecosystem, and to encourage developers to improve its functionality.

R3 will no doubt charge for related services such as security layers and consulting, and may develop proprietary apps that it can sell to clients.

It therefore needs to be intimately familiar with the underlying protocol, in order to build on it and commercialize the result. R3 is unlikely to consent to the fragmentation of Corda for broader application, or to the technology being incorporated into another protocol (although it probably wouldn’t object to the other way around).

Hyperledger is a not-for-profit group set up and run by the Linux foundation. Their roles are similar: to foster the development of their communities, encourage standardization and add a layer of governance. The foundation has over 200 members, and as well as shepherding Linux, it has a long list of “collaborative projects”.

Hyperledger has already started down that path.

No one blockchain

But as Hyperledger continues to grow, its members’ interests will spread and diverge. The idea of one blockchain for all becomes less feasible, and the necessary investment less practical.

Unlike with the Internet, we probably won’t end up with one technology standard in the blockchain space, however modular. And that may not be not a bad thing.

Instead of creating a hive of ecosystems competing for talent and users, the initial chaos is more likely to encourage innovation and open up virtually unlimited flexibility.

We’re already beginning to see the emergence of a sector in which different solutions are starting to think about how to interact with each other.

We are getting a glimpse what the future of blockchain will look like.

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Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.

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