Enterprise-Grade Blockchain to Take Business IT Systems to the Next Level in 2018

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Ask any blockchain developer, and they will give you not one but multiple use cases in their respective trades and PoCs (Proofs of Concept) to demonstrate blockchain’s relevance and functionality in their industry.

However, ask them about the practical implementation of blockchain for business, and you will find them struggling for solutions. Enterprises are no strangers to the challenges they face at the time of execution, and openly acknowledge the hurdles they face when it comes to deployment of this complex and innovative blockchain technology.

This brings us to the vital question of whether or not 2018 is going to be the year when blockchain will move from its testing phase to its phase of implementation in various enterprises.

Feedback from businesses in 2017 has shown that the primary challenge of shifting use cases from PoC to the pilot phase and then to mass production involves five key aspects of enterprise-grade requirements:

• Operational resilience
• Supportability and management
• Performance at scale
• Security and confidentiality
• Enterprise integration

The establishments already testing blockchain use cases acknowledge these challenges and have an urgent need to address them. Oracle, one of the leading tech vendors, already identified in 2017 these challenges facing the blockchain platforms. The software upgrades that are now underway to enable enterprise level implementation are likely to ensure that enterprise blockchain will finally be ready to launch in 2018 and organizations will be able to go from testing stage to production.

Scaling Blockchain Performance

 

There are a number of companies that deal with close to a thousand transactions per second. For instance, a telecom company in Asia tackles as many as 100,000 mobile payments and billing transactions per second (tps). Then there are credit card processor companies that handle more than 13,000 transactions per second during their peak times.

Needless to say, these corporations are looking to create large networks of blockchain users so that they can handle the massive transaction volume, while controlling the latency in transaction time. It will be easier for them to do this with lower taxes as well and less regulations which enables them to expand, hire more, and take on more risk because their revenues have increased.

However, blockchain applications available today do not operate at these output levels. Most of the functional blockchains at present do not even hit a 100 tps mark. Bitcoin, the super popular cryptocurrency, averages at 7 tps. The latency in these transactions can be anything between few minutes to a couple of hours. Enterprise-grade blockchain will not only help to increase their throughput, but also keep the transaction latency to less than a second for numerous enterprise use cases.

To achieve this objective and overcome the limitations, new enterprise blockchain platforms must use an architectural process where dissimilar work is done using isolated scalable servers, also known as containers. The approach must also take support from faster consensus protocols, make best use of parallelization, leverage asynchronous flows, and enhance the execution ecosystem.

A Linux Foundation project that Oracle was a part of in 2017 already has some of these architectural features. However, more can be achieved by leveraging the knowledge earned from the systems that are already producing that kind of throughput in different organizations to achieve desired latency and output levels.

Furthermore, to scale a permissible blockchain network, where all users are linked to legitimate bodies to hundreds of members, also needs an efficient and dynamic integrating process. Enterprise Proof-of-Concepts hardly ever include more than a dozen participants in a single blockchain.

Some processes used for onboarding make suppositions that do not survive the practical application. Therefore, efficient tools will be needed to tackle the process of introducing enterprises into production networks in a streamlined manner. Additionally, all the essential permissions and verifications should be obtained to make the best use of identity management services.

Members who are part of the network should be able to position their authenticating nodes by using existing cloud or onsite data centers in an open environment.

Building System Resilience

 

The enterprise systems are designed in such a way that they can prevent downtime and recover from component failure quickly. The high availability in any business-critical process relies on systems that can overcome outage issues and quickly bounce back in case of module failure. Software and hardware are no strangers to breakdowns. Therefore, it is vital to design highly resilient systems, accounting for the potential risk of failures. The key is to develop a framework that keeps going in all situations.

For instance, Oracle’s conventional enterprise software and service replication guarantees that the system will be able to endure a single or multiple component failure. At the same time, developing a resilient blockchain ecosystem involves deployment of redundant peer nodes corresponding to each member enterprise, reproduction of other blockchain network components and clustered ordering services, which are already inherently present in the architecture of Hyperledger Fabric.

Apart from redundancy, independent monitoring, and failed component recovery as well as uninterrupted backup of configuration and ledger data can ensure quick, self-directed rectification of most malfunctions without the need for human intervention.

According to research, 70 percent of downtime is a result of human error introduced during the process of rectifying the inaccuracy or creating a reconfiguration. Therefore, it is critical to reduce manual involvement with the system.

Bolstering Security

 

Blockchain deployments are put through security evaluations that analyze how blockchain can limit transactions and ledger access to approved members, ensure data encryption at-rest and in-transit, and make certain that the network communication cannot be tampered with. They also check the legitimacy of digital signatures.

From their inception, enterprise blockchains must involve creation of a permissible network with all members known as legal entities that have valid enrollment certificates issued only to members that are registered through membership services. These certificates are signed cryptographically and create a secure link between identity of its members and validation features with a cryptographic key that verifies their digitally authorized messages.

Through digital signatures, clients and nodes can verify the message integrity by applying it to all network messages. Another layer of security is added by encrypting message interchange and validation of message end points.

Automatic encoding of stored data can help ensure data encryption in-transit and at-rest. Consistent and transparent application of this standard for all stored ledger data and secure communication can be a leap forward in preserving security and integrity of the blockchain network. It will also go a long way in thwarting hacking attempts.

Enrollment of new member organizations and issuing them digital certificates by blockchain certification body involves a fundamental process that relies on proper verification of the establishment’s identity and access rights. This can only be possible with resilient key management and identity management capabilities.

Furthermore, even the use of protected systems does not guarantee completely secure environments because credentials can still be misappropriated through social engineer attacks or spearfishing. Therefore, it is important to have a process of certificate reversal as part of the contingency solution in order to avert the use of discredited certificates.

At the same time, gaining consistent access to blockchain REST APIs or admin handlers or interface with peripheral client applications can only be possible through robust multi-faceted access controls complete with physical, logical and data security controls. It should also have an adaptable or behavioral certification system that can match historical patterns with user behavior to flag substantial deviances.

Not only should enterprise blockchain provide external security, but should also be able to use Hyperledger Fabric channels to conduct secure transactions. Using this process will isolate peer nodes and support private ledgers that are available to the peers on the same channel.

Furthermore, the data and transaction discretion can be enhanced by integrating access control authorizations in a smart contract. There should also be a provision for private peer to peer interactions that can inhibit transaction information visibility from other peers. Selective encoding of the crucial data for limited access by approved members can further strengthen data integrity and privacy.

Creating Support Infrastructure

 

As the organization creates a PoC and demonstrates the blockchain application to a specific use case, how can it be transitioned to production stage to get desired output?

Who will design the blockchain framework and network components and support their infrastructure? Who will work at the backend providing troubleshooting and monitoring services, handling upgrades to new versions?

As blockchain moves over to production, supportability and operations become highly critical, including managing operations and configurations, troubleshoot malfunctions, tackle upgrade/patch lifecycle with backward compatibility and keep a close watch on service-level agreements.

One possible solution is providing blockchain as a managed service (BaaS) that incorporates ready to use operational abilities and infrastructure to manage, patch, and support the infrastructure, while enterprises can concentrate on the business of generating value from using blockchain.

The BaaS service provider would be responsible for integration and upkeep of the underlying technologies that are required to keep blockchain functional. They will also tackle troubleshooting to provide seamless interface for the peers to monitor SLAs, handle policies, perform active configuration, and preserve the smart contract lifecycle.

Enabling Integration

 

Blockchain will eventually expand instead of swapping the existing enterprise systems of record (for example, ERP, core banking, human capital management, and supply chain management).

However, it can be a complicated and expensive affair to build these integrations individually. For businesses to successfully note ledger updates, share data, bring out transactions, and record blockchain events into SORs, they would require pre-built onramps for enterprise systems and API-driven techniques of integration.

Transforming a unique blockchain PoC into an all-encompassing part of the IT framework relies on its capacity to advance and simplify these assimilations. It can be beneficial to employ application integration toolkits that can tackle standard business events and processes.

Further expansion is possible by using API-driven development that depends on an API platform that uses REST APIs for raising blockchain transactions and assessing the disseminated ledger. Through this step, new applications can be quickly distributed that encourage innovation and integrate current backend processes.

Key Takeaway

 

2017 was a year for blockchain experimentation in the form of Proofs-of-Concept and pilots across a spectrum of industries, such as financial services and supply chain. It was also used in some government operations such as the FASt Lane Process for IT schedule initiated by the US General Services Administration.

For enterprise blockchain to move on to the production phase in 2018, the technology would have to address all the key areas and will have to be fine-tuned for implementation. Vendors such as Oracle and Hyperledger are already gearing up for the challenge to help enterprises adopt blockchain technology as part of their IT systems in 2018.