ConsenSys, the leading name in Ethereum based blockchain solutions, recently published a review of what could be the most influential and eventful year for cryptocurrencies to date. The company talked about its performance in 2018 and how some companies that adopted Enterprise Ethereum early on, fell victim to ‘The Chasm’ of early technology adoption.
The company narrated how the world has moved on to the next stage of adoption- moving from the ideation process, developing a Proof of Concept to building actual products. ConsenSys divided its performance in 2018 into three key areas, explained below.
Enterprise Blockchain/Ethereum Market
The top 10 biggest companies in the world showed great interest in blockchain while MarketWatch estimated the global size of the enterprise blockchain market to balloon to $20.3 billion by 2025, compared to $4.6 billion in 2018. ConsenSys quickly capitalized on the trend, launching a Blockchain Foundations course on Coursera, a popular MOOC service.
However, the most important Enterprise Ethereum milestones were reached when JP Morgan launched Quorum, an Ethereum client providing better privacy settings or a permissioned network. Not only this, it comes with public licensing that makes it mandatory for any software created on the network be open source.
Mana, another Ethereum client, written in Elixir that improves upon Quorum was also launched this year. ConsenSys too launched Pegasys’s Pantheon. The project is dedicated to implementing Ethereum in production and works as an extension of Quorum. It comes with an enterprise-friendly Apache 2.0 license providing more propriety to the organization that develops the software.
Additionally, it is a java client helping onboard an army of developers to make enterprise applications of Ethereum more viable. Pantheon’s private nodes also connect to the Ethereum mainnet, bring a powerful transformation in the way organizations connect to mainnet applications.
Pantheon is one of the most important Ethereum client releases. At the time of its release in October, Pantheon was updated to the Constantinople release. Note that the Ethereum mainnet will be opting for the Constantinople hard work later this month.
The client is already equipped to work with multiple consensus algorithms, which includes the traditional Proof of Work as well as the Proof of Authority (PoA), which could be used for fast private networks. The next release would be equipped with IBFT 2.0. It is also available on Microsoft’s Azure Marketplace and can be accessed directly via Azure Portal.
Another milestone for ConsenSys came in the form of Kaleido, one of the most promising implementations of Enterprise grade Ethereum that has added 1550+ consortia blockchain networks, generated 150 million blocks and added over 4000 nodes since its launch in May. Their Blockchain Business Cloud is created in collaboration with AWS and ConsenSys.
Enterprise Ethereum Use Cases
As the number of applications using trade finance increased, numerous industries were benefited. The first solution that ConsenSys discussed for the trade financing sector was Komgo, a global blockchain platform that reduces paperwork by digitizing letters of credit.
A big breakthrough in the banking system came with Santander as the bank developed a real-time payment system for both domestic and cross-border payments using Ethereum. They also created a cash tokenization utility to help clear and settle payments within 10 to 15 seconds. Another banking revolution started in the Philippines with Project i2i which provides financial inclusion to millions of unbanked residents
In South Africa, Quorum was utilized to create Project Khoka where the South African Reserve Bank tested a proof of concept of a network that handles the typical daily volume of transactions but settles them within two hours.
Blockchain made its presence felt in the philanthropy sector as well, with projects like Luxarity, which provide 100% traceability of donated funds. In the healthcare sector, the Caifeng Gene will become the first-of-its-kind blockchain-based genomic data exchange to address the rising number of diabetics in China.
In the supply chain sector, Atato launched a blockchain traceability program for tuna development company Pacifical. It would help customers get certified and sustainable tuna products. Greenfence Consumer, on the other hand, will help Sony and Fox studios to sell intellectual property and digital collectibles to users.
Radiant Earth Foundation partnered with ConsenSys to create a proof-of-concept to track payments and licensing of geospatial satellite data. In the oil and gas industry, Ondiflo- a joint venture between B2B integration company Amalto and ConsenSys, helped in creating enterprise-grade blockchain solutions to work for all ticketing-based services from identity and certification to financial settlements.
The mining industry also moved a step closer to blockchains, as ConsenSys partnered with Open Mineral, a trading platform for metal concentrates. Together, they created Minerac, a consortium of mining companies and financial institutions which works on Ethereum to exchange trade critical documents like letters of credit.
Standards and Consortia
While the development of applications for the enterprise is important, it is equally critical for the young industry to develop standards and protocols for itself. It also helps in creating shared frameworks for industry groups. Last year, several such initiatives came to the fore.
The first among these was Enterprise Ethereum Client Specification, released by the premier standards-setting body for Enterprise Ethereum- the Enterprise Ethereum Alliance (EEA). It would help in creating a “single, open-source, cross-platform standards-based framework to speed up business transactions.”
The EEA and the Hyperledger Foundation, two of the leading DLT consortia decided to join each other’s organization to strive together for mainstream blockchain adoption.
Other organizations are also working to up the ante for blockchains. Web browser standard-setting organization W3C is working on a web ledger protocol while the International Organization for Standardization (ISO) is creating the ISO 307, a distinct set of standards designed for blockchains and distributed ledger industry.
Where is ConsenSys Going From Here?
In 2019, the company made a major announcement about its collaboration with hardware manufacturer AMD and Abu-Dhabi based investment management firm Halo Holdings. Together, they will create the W3BCLOUD, leveraging ConsenSys’ experience in blockchain and AMD’s hardware capabilities. It would also be the first independent cloud computing blockchain infrastructure adding state-of-the-art security to robust, high-output blockchains.
However, the ConsenSys mesh has several differing viewpoints about the year that was and the future of Enterprise Ethereum. Monica Singer, South Africa Lead, thinks that the biggest breakthrough in the industry was the fact that blockchain showed several industries how it could reduce friction. She noted that now the world has the technology that could bring the idealistic concepts of governance and transparency into practice.
Solutions, Developer Guilherme Campos, talked about the development of meta-transactions as a way to boost the adoption of DLT. However, Law and Technology expert Joyce Lai focused on the regulatory part of the young industry. The Ethereum community achieved a big breakthrough in June this year as Director Hinman from the Division of Corporate Finance of the Securities and Exchange Commission commented on the application of US securities law on token sales. He said that Ether is not a security.
Challenges Blockchain Faced in 2018
Venture Partner Cecily Mak suggests that confusion between blockchain and cryptocurrency is one of the most enduring challenges in the blockchain space. Mak also commented that misunderstanding the two concepts creates a pervasive initial sense of distrust and speculation regarding “blockchain” as equivalent to “cryptocurrency.”
Liquality founder Alex G added that seeing traditional intermediated business models getting rehashed instead of being dismantled was the biggest challenge of the year.
What Will Be Blockchain’s Most Dominant Theme in 2019?
Cecily Mak noted that governments and enterprises may still continue to maintain centralization and control. This could lead to a more informed debate on the pros and cons of both centralization and decentralization and “the power of blockchain to advance humanity as a whole.”
Sr. Solutions Architect & Strategist Constantin Kostenko said:
“Surprises that will feel like overnight success from the groups and companies that were heads down building in 2018.”
Nicole Adarme, Product Marketing Manager, said that 2019 would mark a drastic increase in the adoption of Enterprise Ethereum. Joyce Lai, on the other hand, narrated the efforts undertaken by the State of Wyoming, especially the introduction of HB70, which creates a safe haven for the creation of consumer tokens, which will be distinguished from the financial investments and HB101 classification.
He also talked about the steps undertaken by the CFTC to understand the Ethereum network better. Monica Singer said that the most dominant topic for this year would be the creation of security tokens that will be regulated like typical stock exchanges.
Which Aspect of Blockchain Should Be Improved in 2019?
Mak noted that the barriers to entry in the industry must reduce for the greater good, referring to the relative cost of getting familiar with blockchains for both enterprises and governments. Nicole Adarme backed his views.
Mark Sandusky said that user acquisition should improve. He noted:
“Getting people to play these games and use these dApps — not ‘because it’s blockchain,’ but because it’s the most desirable option available. Then we can go about seeing how these dApps and games hold up when people are actually using them.”
Georgia Rakusen said that blockchains need to solve real problems to become successful and become mainstream. Guilherme Campos put this view into perspective, saying:
“Let’s stop talking about blockchain and start talking about products. No one cares about how the Internet works, as long as they can use Facebook, or WhatsApp, or Snapchat…”