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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.

New York Times Experiments with Blockchain to Combat Fake News

The New York Times made an announcement regarding their new project by their research and development team focused on experiments using blockchain. They are finding a solution to combat misinformation, adulterated media issues that harm publishers. This solution can be used by the media industry globally in the future.

Their News Provenance Project plans to use Hyperledger Fabric’s permissioned blockchain, an open-source blockchain framework to authenticate news and photographs. Their team consists of technologists and journalists who are also collaborating with IBM Garage on the development of the proof of concept. The project will consist of storing the details of the news item including the information regarding the where a photo/ video was taken, the person who took it as well as the publishing and editing contextual details. The research and development team believes that adding context to images or videos may bring a positive and clarifying effect for the online media ecosystem.

“All hype aside, blockchain offers mechanisms for sharing information between entities in ways we think are essential for establishing and maintaining the provenance of digital files,” stated the News Provenance Project.

As of their current stage, the research and development team are conducting user-centered research by using a blockchain-based system, which the team can benefit from its tamper-proof feature. The participation of the majority of the media industry will affect the success of the project.

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IBM Takes Majority Control of Hyperledger Blockchain Steering Board

IBM has doubled the number of its employees on the technical steering committee (TSC) of Hyperledger according to an announcement by the TSC last week. IBM now holds six out of the eleven committee seats which has raised concerns about the tech giant’s new found influence on the enterprise blockchain consortium.

Of the six IBM employees: five work for IBM directly and one seat is occupied by Mark Wagner, a senior principal engineer at the IBM subsidiary Red Hat. In 2018, the TSC had only two IBM representatives and the same number of total seats. Wagner was serving on the committee at the time, but IBM did not acquire Red Hat until July 2019. The new committee will begin governing following the election of the new TSC chair next week.

The Hyperledger TSC is responsible for creating working groups to focus on technical issues, approving projects and reviewing updates. Although IBM has been a major player in Hyperledger since its inception, the results are making many from rival firms uneasy as IBM will now have the numbers to steer the committee in its favor.

At stake is the direction of one of the three most widely adopted enterprise blockchain platforms, the others being R3’s Corda and variants of the Ethereum blockchain.

Low voter turnout was also raised as a reason to mistrust IBM’s dominance on the committee, with only 33 percent of Hyperledger members casting ballots.

IBM has not yet offered any comment.

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IBM Opens Quantum Computation Center in New York

IBM has opened the IBM Quantum Computation Center, bringing the world’s largest fleet of quantum computing systems online.

On September 18th, IBM announced the opening of the IBM Quantum Computation Center in New York State which will house the world’s largest fleet of quantum computing systems for commercial and research activity that exists outside of an experimental lab environment.

In 2016, IBM put its very first quantum computer on the cloud. Dario Gill, Director of IBM Research said, “Our strategy, was to move quantum computing beyond isolated lab experiments conducted by a handful of organizations, into the hands of tens of thousands of users.” Since then, IBM’s global community of user have already run more than 14 million experiments on quantum computers through the cloud and published more than 200 scientific papers.

Within one month, IBM’s commercially available quantum fleet will grow to 14 systems, including a new 53-qubit quantum computer, the single largest universal quantum system made available for external access in the industry to date. On the new IBM Quantum Computation Center, Gill commented, “In order to empower an emerging quantum community of educators, researchers, and software developers that share a passion for revolutionizing computing, we have built multiple generations of quantum processor platforms that we integrate into high-availability quantum systems. We iterate and improve the performance of our systems multiple times per year and this new 53-qubit system now incorporates the next family of processors on our roadmap.”

Advances in quantum computing could open the door to future scientific discoveries such as new medicines and materials, vast improvements in the optimization of supply chains, and new ways to model financial data to make better investments.

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Bank of Lithuania Selects IBM and Tieto as Finalists for its Blockchain-Powered LBChain Project

Bank of Lithuania, the nation’s central bank, has chosen IBM, a technology titan, and Tieto, a leading Nordic software and services company, as the finalists in its blockchain-powered LBChain project.

On Oct 23, Fintech Futures revealed that both companies would enter the final level of the testing stage, and the winner will be announced as the year ends.

The LBChain project manager at the Bank of Lithuania, Andrius Adamonis, asserted that the final testing session was ideal in showing the most suitable solution for market needs.

Adamonis added:

“We believe that the greatest advantage of LBChain is its versatility. We strive to create a platform that would not only serve for testing products or services that are already offered on the market, but would also be used to create those that might currently exist only in a financial architect’s mind.”

LBChain’s Mechanism

LBChain is unique because it functions both as a regulatory sandbox and a technological platform. As a result, its novelty is speculated to be instrumental in tackling various challenges witnessed by financial innovators.

Moreover, LBChain’s mechanism is founded on R3’s Corda and Hyperleger Fabric, intended at testing numerous financial services and products.

The Bank of Lithuania has also revealed that it has already tested networks availed by fintech firms from three European nations. Some of the products include an unlisted share trading system, cross-border payments, anti-money laundering (AML), and know your customer (KYC) solutions.

This development shows the confidence that the Bank of Lithuania has in blockchain technology.

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IBM Blockchain Technology Used for Salmon Traceability By Cermaq and Labeyrie

Conscious consumerism is a term continuously making waves because people are becoming more keen on what they consume. For instance, people are concerned about the origin, safety, and nutritional value of what they drink and eat.

As a result, Cermaq, a leading company in the farming of trout and salmon, has teamed up with Labeyrie, a notable French brand of smoked salmon, to propel the traceability of salmon through IBM’s blockchain technology.

By leveraging on blockchain technology and QR-code, conscious consumerism will be prompted because consumers will be availed with information in photos and text about where the salmon they are buying was farmed, the food it was fed, and other relevant information.

By scanning the QR-code present on the product packaging with a smartphone or tablet, consumers can access information about the salmon from egg to store.

Blockchain to offer optimal traceability

“All Cermaq salmon is accompanied by a CV, containing comprehensive information about the fish; its origin, when it was hatched, which freshwater facility it came from, how big it was when it was transferred to seawater, at which seawater facility it has been farmed, as well as health and welfare information such as which vaccinations it has received, what it has been fed, and when it was harvested,” commented Cermaq.

Conversely, Brede Løfsgaard, the sales director at Cermaq Norway, stipulated that blockchain technology was playing an instrumental role in enhancing traceability and transparency.

He asserted: “This is a new and exciting project, which puts a larger emphasis on transparency and traceability in all parts of our value chain. This is something we as a company are very focused on, but also something we see that consumers want and expect.”

The project is stipulated to reassure consumers that the salmon they are buying is nutritious and healthy as it has been farmed sustainably and responsibly.

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IBM Eyes Blockchain and IoT Solution to Eradicate Drone Theft

Companies, such as FedEx, DHL, and Amazon, are developing drones that can deliver packages to clients’ doorsteps. This is a novel undertaking, but IBM is looking at the bigger picture, whereby these drones might steal the packages instead of delivering them.

The computing giant, however, notes that this challenge can be eradicated with the help of blockchain and the internet of things (IoT). Expressly, IBM won a patent for “Preventing anonymous theft by drones,” whereby an IoT altimeter will be triggered if a liftoff happens. It will then track the package’s attitude, and the information will be stored on a blockchain platform.

IBM noted that online purchases are continually increasing, and people have the liberty of flying their drones. As a result, package theft through drones may be inevitable.

The patent affirms: “The confluence of the increase in drone use and the increase in online shopping provides a situation in which a drone may be used with nefarious intent to anonymously take a package that is left on the doorstep after delivery.”

IBM has stipulated that the solution will entail placing an IoT sensor on delivery packages that only triggers if an attitude change exceeding the threshold is detected, as this will mean the items have been lifted from the drone. The sensor will then periodically update the blockchain network.

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IBM’s Blockchain Technology Hand Picked By Coop Italia for Food Traceability

Blockchain technology is continuously being embraced in different sectors, and traceability has emerged to be one of its fundamental selling points.

Coop Italia, the biggest retail chain in Italy, has acknowledged this attribute as it has selected IBM’s blockchain technology to enable its private label brand called Coop Vivi Verde to trace the origin of eggs in its supply chain.

The retailer noted that the solution is founded on a Linux Foundation framework hosted on IBM Cloud, known as Hyperledger Fabric technology.

Blockchain Grants Full Transparency and Visibility

By leveraging on IBM’s blockchain technology, Coop Italia will have full visibility and transparency of the different players taking part in the production chain involving nearly 2 million hens producing at least 200 million eggs annually.

It has been stipulated that these hens adhere to animal welfare standards. As a result, eggs are sourced based on the laid out requirements. Additionally, they have to be certified by two independent third-party bodies, as well as more standards spelled out by Coop Italia.

To access information about the eggs’ journey from farm to store, consumers will be required to scan the QR code found on packages and typing the batch code.

The retailer, therefore, seeks to optimize consumers’ satisfaction levels by deploying blockchain technology and QR codes.

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How Can IBM’s Blockchain Network Support $2 Trillion in Product Logistics by 2023?

IBM Blockchain has been around for several years, delivering on blockchain projects for enterprises in areas such as trade finance, securities, payments and supply chain traceability, as well as establishing new platforms for businesses and improving efficiencies in existing industries.

Alan Lim, one of the initial members of the IBM Worldwide Blockchain team, heads IBM Blockchain Labs in the Asia Pacific. Lim kicked off his journey in blockchain as he was curious about how blockchain was being used in solving some real-world challenges. “I realized that blockchain was a new approach to solve the issues around trust, to look at how we can reimagine or change the way transactions are processed, and how we can establish a single point of view across different parties,” said Lim.

Lim believes that blockchain is an interesting new approach for cross-border transactions that involve multiple parties. “When I look at it from an architectural perspective, it became even more interesting as I dug deeper into it. I started to see that it’s not just about the technologies, there’s the economics behind it as well.”

Lim’s work at IBM has been based on working on blockchain from an enterprise perspective. “What we have seen for the last couple of years, is the maturing understanding of blockchain and its uses for enterprises,” stated Lim. He commented that his journey has geared towards trying to understand the requirements and capabilities of the technology in order to be fully realized from an enterprise perspective. “I’m still very excited about the potential, the technologies and what it can do across a range of different industries beyond the financial services sector. Hopefully, we will see more adoption, as some of these use cases and networks are moving towards the production kind of deployment.”

IBM TYS: The ‘Digital Passport’ to Streamline Supply Chain Processes

IBM and blockchain consultancy firm, Chainyard announced a new collaboration on Aug. 5 regarding a new blockchain network called Trust Your Supplier (TYS), which was designed to improve supplier qualification, validation, onboarding, and life cycle information management. Other founding members of the network include Anheuser-Busch InBev, Cisco, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric and Vodafone.

The TYS network aims to solve issues around manual processes that make it difficult to verify identities and track documents such as bank account information, tax certifications and certificates of insurance throughout the lifecycle of a supplier. Technology research firm Garner Inc. mentioned that by 2023, blockchain will support the global movement and tracking of $2 trillion of goods and services annually.

“We identified a problem, that the current procurement process is a very long time to onboard a new supplier to a company. The company needs to go through the due diligence process to make sure that the given suppliers are compliant as necessary credentials to be able to support the buyer’s needs,” said Lim.

Lim explained that this is a reoccurring process, across different organizations, therefore he pointed out that the process should be simplified. “To streamline the whole process, we would enable a ‘digital passport’, then different organizations and suppliers would secure their necessary credentials and would make it easier for the supplier to enter into a new relationship with the purchase and vice versa.” IBM is currently working with different parts of the ecosystem to empower a more efficient onboarding process.

IBM Food Trust: Cutting Through the Complexity of the World’s Food Supply with Blockchain

Alan Lim, one of the initial members of the IBM Worldwide Blockchain team, heads IBM Blockchain Labs in the Asia Pacific. Blockchain.News sat down with Lim to learn more about IBM’s blockchain initiatives, including its Trust Your Supplier and Food Trust platforms.

IBM Food Trust was first launched in August 2017, with 10 Foundation members aiming to use blockchain in food traceability to solve issues in the food supply chain. Prior to the launch, IBM, Walmart, and Tsinghua University announced a collaboration to improve the way food is tracked, transported, and sold to customers in China. Juniper Research recently announced that IBM Food Trust is one of the leading blockchain players in the food provenance space.

Since the launch of the IBM Food Trust, millions of transactions have been entered onto the blockchain, as the technology provides transparency and efficiency in supply chain record-keeping to help ensure food safety for consumers. “I think the problem we’re trying to solve is the issues around the current food supply chain. Whether it’s related to issues around food safety, issues around the freshness of food, there’s an opportunity for being more efficient,” Lim added.

The dire need for trust and transparency

Lim explained that the food supply chain is quite complex, as the ecosystem consists of an extensive range of farmers, growers, packing houses, distribution centers, retailers to the consumer. “There is a dire need for a common view across the value chain to establish trust, but not just the ability to track and trace but true transparency across the different parts of the ecosystem.”

“One thing that we realized very early on is the need for standards. We’ve been partnering with various industries, parties, and associations,” said Lim. He also mentioned that the IBM Food Trust has also investigated standards from GS1, a non-profit organization headquartered in Belgium that develops and maintains global standards for business communication. Lim believes that standards are very important, and the group is looking to onboard different parties from different parts of the ecosystem across the globe. “This becomes even more important, so we’re looking at how we can better partner and adopt some of these standards, whether it’s uniquely identified produce, whether it’s looking at better ways of tracking, including the life cycle of the product,” explained Lim. “With the adoption of standards, we think that would be a key enabler for us to be successful in this area.”

One of the design principles that the IBM Food Trust decided on was that the data provided by the different parts of the ecosystem remains in the different parts of the ecosystem, different players in the ecosystem will need to grant permission to another party in the supply chain to have the visibility of the data. Lim emphasized that IBM is just the solution provider and operator for the network and stressed the importance of the ecosystem.

Interoperability of IBM Food Trust

From a data model perspective, Lim explained, “If we’re able to conform on the same data standards, it makes it easier for information to be shared by different networks and systems, platforms that are on blockchain and those that are not.”

Lim mentioned that the design of the interoperability of the solution is a more advanced kind of adoption; however, integration is more complex. “With the integration, we have to put in place interfaces, which are standard-based through APIs and companies that are looking to integrate with the IBM Food Trust solution can do so using those established APIs to be able to connect in, publish information, and retrieve information about the food supply chain.”

The IBM Food Trust has convened an advisory council made up of different parts of the ecosystem. As described by Lim, some parties are even competitors with each other. “The idea is to ensure that the principles are being followed very closely.”