You actually know something about the finance industry, not sure this is the thread for you ;) You're absolutely right about the core problem.
I worked for several years on an 'enterprise blockchain' system. We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
I have to admit, at the very start I was skeptical about why so many large companies seemed to want this stuff. Like Tim, I also spent a lot of time talking to staff at these large institutions to understand where they were coming from. Unlike him I didn't work for AWS which is pretty much the exemplar of centralised infrastructure, so maybe it was easier to pick up on some of the more subtle issues involved.
There are a few things to understand about businesses that decided they wanted blockchain:
1. They have complicated inter-firm communication and synchronization needs.
2. They solve those needs today via creating centralized trusted intermediaries (like CLS). This comes with a world of pain and problems like the obvious "too big to fail" issue that was exposed in 2008, but there's also a lot of less obvious problems, like these institutions immediately becoming stagnant rent seekers who don't innovate.
3. They exist in markets that lack obviously dominant players who can push things forward. Many people in the tech world don't understand this because we rely so heavily on a handful of ultra-profitable, ultra-huge tech firms that spend lots of treasure on giving out freebies and standards setting, but that's abnormal.
So they heard about how Bitcoin can synchronize different companies view of a real financial object like a ledger without a SWIFT-like organization sitting in the middle, and thought "yes that sounds like what we need". And they're kind of right, as long as you think in terms of business problems rather than technology!
"Blockchain" is a concept that works for them speaking in the purely abstract social sense because it acts as a neutral rallying point. If one company in a market observes that maybe having a giant specialized too-big-to-fail clearing house like CLS isn't the ideal way to solve atomic transactions, and they go to their partners saying "hey let's use this cool thing we designed" the answer will always be no because their partners will say, why should we empower our competitor? Blockchain as a concept is owned by nobody, and the core idea is that it empowers nobody, so it acted as an enabler for conversations that would otherwise never have happened. Whether the final result actually uses proof of work or even has blocks at all actually isn't so relevant except in the sense that business owners don't want to get ripped off by people lying to them about what they built.
Tim Bray should really understand this dynamic better than most people because he created XML, which crops up in the enterprise space all over the place, often in ways that aren't really appropriate. Something like protobufs would have been a far better fit but they use XML. Why is that? Well, XML went through a massive hype wave ~20 years ago thanks to the W3C relentlessly pushing this vapourware "semantic web" concept, so for a brief period XML was the future of everything. Again, this created a socially acceptable rallying point at which complex inter-firm business problems could be solved in a relatively decentralized way. The tech got used regardless of merit simply because it was something everyone could agree on and unlike ASN.1 the protocols/tooling was free.
Back to blockchain. The platform I designed for this use case (Corda) was a competitor of the DA platform used in ASX and has done relatively well in the market - it reached number 1 by number of projects using it and unlike the ASX case actually has real deployments that are actually decentralized. Over 90% of Italian banks are using it for inter-bank reconciliation! [1] There are other projects that use it too which seem to be working (I'm not involved in any of them directly and haven't worked on Corda for several years now). You never hear about them on HN because they're too Starship Enterprise to be interesting to the crowd here, but the idea that there are no working blockchain projects isn't actually true.
We managed this partly by walking the tightrope between what people said they wanted (blockchain!) and what they were telling us they actually wanted in customer interviews (what we came to call distributed ledger technology). There was definitely a fair bit of overlap but not enough to just throw Ethereum at a problem and call it solved. What they really needed was a combination of better inter-firm messaging, signing/cryptography, atomic financial transactions without a CLS-style intermediary that actually takes custody of the assets, a robust identity framework, good developer support and training materials etc. Some of this can be found in blockchain related research like BFT algos, others were somewhat solved already, but blending them together into a coherent platform was hard.
There's lots more that can be said about this - some customer projects failed, but the reasons ran the gamut from tech to social/political/business reasons. It wasn't as simple as "blockchain is a scam", which is what Bray seems trying to imply here. There actually is a there, there. It's just really, really hard to solve these problems without a hype wave to coordinate and synchronize intent.
> We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
because it was actually how I selected Corda as the infrastructure for a project a few years ago. The customers and managers wanted Blockchain®, and I wanted to deliver something that actually added some kind of value, and I found Corda which - as I told my CEO - was "close enough to a blockchain that our marketing splash wasn't lying".
(Whereas to my fellow devs, I said more or less "look, it's Spring Boot with a replicated event-sourced database and a funny CLI admin panel")
Unfortunately the project never got past the test stage because - this is gonna shock you - the very first, extremely basic smart contract we encoded in Corda was immediately violated by the customer's processes, and they absolutely refused to change.
Still, I want to thank you because your platform enabled me to retain my dignity without pissing off my boss for a half year or so.
Hi everybody... Richard Brown, CTO of R3, the firm behind Corda, here.
As Mike says, we're somewhat unusual in that there are many live, successful Corda deployments around the world. Mike's comment about how Corda is blockchain-like but not, strictly speaking, a chain of blocks is at the heart of this I think. Here's what I mean:
How many 'introductory' presentations have you been to (or, worse, given) to semi-technical people, where Bitcoin and other public blockchains are 'explained' by describing the components? You probably know the sort of pitch I mean: they laboriously build up the concepts - transactions, signatures, hashes, blocks, chains of blocks, mining, etc, etc. Such presentation are usually correct. But they impart almost no intuition. It's little wonder that so many 'business people' come away from them thinking that a blockchain is some sort of mysterious and magical technology.
There's a presentation I like to give where I go the other way. I give a one-line description of the problem Bitcoin solves [1] and then I help the audience 'invent' Bitcoin for themselves from first principles. There's an old blog post of mine that gives the rough idea [2]. The point is that successful architectures solve well-stated problems. Cargo culting never works.
Where I think many corporate deployments of blockchain went wrong was that they saw the huge enthusiasm for 'blockchain tech', had a vague intuition that 'inter-firm' or 'market-level' problems were ripe to be solved, but they never fully internalised that Bitcoin's (or Ethereum's) architecture isn't some sort of inviolable, handed-down-from-high blueprint... it's merely a very elegant engineering solution to a well-stated 'business problem'.
Yet many 'enterprise blockchain' platforms seemed to begin with the architecture of a public blockchain, and then tweaked it to make it palatable to businesses (eg engineering cumbersome privacy solutions on top to work around the inherently broadcast nature of the public chains). This always felt a bit weird to me.
With Corda, we were fortunate to have been given the time and space by our backers to write down our equivalent of the Bitcoin problem statement, and then to engineer a solution to that problem. Yes - of course, we knew we were in the 'inter-firm business process' space, and we knew the problem we were trying to solve was in some way 'blockchainy' But we did try really quite hard to write down the problem statement [3] and then go forward from there, rather than starting with a pre-existing architecture and then modifying it.
Yes - as Mike says, architecturally it looks a lot like Bitcoin (eg it has an unspent-transaction output data model). But it also has a bunch of other things that, to this day, no other Blockchain has... eg the Flow Framework that allows decentralised inter-firm workflows to be modelled (think temporal.io but without any centralised infrastructure). And, like Mike says, Corda passes data point-to-point and confirms each transaction one at a time - no blocks, no broadcast.
You would not believe HOW MUCH GRIEF we got from the blockchain community for that design in the early days. Yet - several years on, it seems to be working.
[1] I claim that the 'requirement' for which Bitcoin is the solution is: "build me a system of un-censorable digital cash."
[3] Our problem statement? "Build me a platform that enables multiple firms to record and manage the lifecycle of the business contracts they have with each other, minimising the need for any new third parties." At least, that's what I thought I was building. Mike might disagree, however... I know he likes the "decentralised database" interpretation of Corda.
I think your interpretation is fine :) Maybe I was aiming for a fully generalized decentralized database, but in the end there's probably too many finance or business-specific concepts in the core model to really deserve the title. At least in Corda 4.
And I should have given you more credit in my post, apologies for that. Indeed Corda has successful 'blockchain' projects where other platforms often don't, largely because of your rigorous problem-definition-first mentality that kept us seeing Bitcoin/Ethereum as a bag of useful ideas rather than a template that we had to follow. It was a great collaboration which I enjoyed a lot, and the platform was very fundamentally shaped by your efforts and insights!
No need to layer on the flattery... I was hand-waver in chief (and like to think I did a good job in bringing people with us and creating the space for you and the team to work without too much distraction and noise), but it was you who actually brought all the pieces together into a coherent platform. There was nothing in your post I disagreed with!
I worked for several years on an 'enterprise blockchain' system. We often called it distributed ledger technology because our platform didn't actually use chains of blocks or proof of work, and it didn't have a token or anything like that. It was essentially a type of database but it had a lot of ideas from Bitcoin in it and was blockchainy enough that customers accepted it as such.
I have to admit, at the very start I was skeptical about why so many large companies seemed to want this stuff. Like Tim, I also spent a lot of time talking to staff at these large institutions to understand where they were coming from. Unlike him I didn't work for AWS which is pretty much the exemplar of centralised infrastructure, so maybe it was easier to pick up on some of the more subtle issues involved.
There are a few things to understand about businesses that decided they wanted blockchain:
1. They have complicated inter-firm communication and synchronization needs.
2. They solve those needs today via creating centralized trusted intermediaries (like CLS). This comes with a world of pain and problems like the obvious "too big to fail" issue that was exposed in 2008, but there's also a lot of less obvious problems, like these institutions immediately becoming stagnant rent seekers who don't innovate.
3. They exist in markets that lack obviously dominant players who can push things forward. Many people in the tech world don't understand this because we rely so heavily on a handful of ultra-profitable, ultra-huge tech firms that spend lots of treasure on giving out freebies and standards setting, but that's abnormal.
So they heard about how Bitcoin can synchronize different companies view of a real financial object like a ledger without a SWIFT-like organization sitting in the middle, and thought "yes that sounds like what we need". And they're kind of right, as long as you think in terms of business problems rather than technology!
"Blockchain" is a concept that works for them speaking in the purely abstract social sense because it acts as a neutral rallying point. If one company in a market observes that maybe having a giant specialized too-big-to-fail clearing house like CLS isn't the ideal way to solve atomic transactions, and they go to their partners saying "hey let's use this cool thing we designed" the answer will always be no because their partners will say, why should we empower our competitor? Blockchain as a concept is owned by nobody, and the core idea is that it empowers nobody, so it acted as an enabler for conversations that would otherwise never have happened. Whether the final result actually uses proof of work or even has blocks at all actually isn't so relevant except in the sense that business owners don't want to get ripped off by people lying to them about what they built.
Tim Bray should really understand this dynamic better than most people because he created XML, which crops up in the enterprise space all over the place, often in ways that aren't really appropriate. Something like protobufs would have been a far better fit but they use XML. Why is that? Well, XML went through a massive hype wave ~20 years ago thanks to the W3C relentlessly pushing this vapourware "semantic web" concept, so for a brief period XML was the future of everything. Again, this created a socially acceptable rallying point at which complex inter-firm business problems could be solved in a relatively decentralized way. The tech got used regardless of merit simply because it was something everyone could agree on and unlike ASN.1 the protocols/tooling was free.
Back to blockchain. The platform I designed for this use case (Corda) was a competitor of the DA platform used in ASX and has done relatively well in the market - it reached number 1 by number of projects using it and unlike the ASX case actually has real deployments that are actually decentralized. Over 90% of Italian banks are using it for inter-bank reconciliation! [1] There are other projects that use it too which seem to be working (I'm not involved in any of them directly and haven't worked on Corda for several years now). You never hear about them on HN because they're too Starship Enterprise to be interesting to the crowd here, but the idea that there are no working blockchain projects isn't actually true.
We managed this partly by walking the tightrope between what people said they wanted (blockchain!) and what they were telling us they actually wanted in customer interviews (what we came to call distributed ledger technology). There was definitely a fair bit of overlap but not enough to just throw Ethereum at a problem and call it solved. What they really needed was a combination of better inter-firm messaging, signing/cryptography, atomic financial transactions without a CLS-style intermediary that actually takes custody of the assets, a robust identity framework, good developer support and training materials etc. Some of this can be found in blockchain related research like BFT algos, others were somewhat solved already, but blending them together into a coherent platform was hard.
There's lots more that can be said about this - some customer projects failed, but the reasons ran the gamut from tech to social/political/business reasons. It wasn't as simple as "blockchain is a scam", which is what Bray seems trying to imply here. There actually is a there, there. It's just really, really hard to solve these problems without a hype wave to coordinate and synchronize intent.
[1] https://www.r3.com/case-studies/spunta/