Early May, the Indian IT services and consulting powerhouse Wipro, announced it had joined the Enterprise Ethereum Alliance (EEA) as a founding member. This Alliance, formed around the open-source blockchain-based platform Ethereum, was officially launched end February with 30 founding members to develop enterprise-grade blockchain solutions.
“Enterprise Ethereum is a great way to fast-track enterprise adoption and Ethereum is one of the fastest growing technology platforms used by our clients for developing and deploying enterprise blockchain” Krishnakumar Menon, Wipro vice president for service transformation.
Ethereum, launched in July 2015, is an open-source, blockchain-based, general purpose decentralized application platform, enabling smart contract functionality. It employs the Ethereum Virtual Machine and the Solidity programming language to directly implement and execute peer-to-peer and multiparty agreements among other applications.
“Ethereum is already one of, if not the, most widely used technologies for developing and deploying enterprise blockchains. Enterprises love the availability of open-source implementations, a single standard, the rapidly growing developer ecosystem, and availability of talent. But enterprises expect resilient secure systems and a robust controls environment. EEA aims to bring these together, both to provide enterprises the forum they need and also to advance Ethereum general,”, Jeremy Millar, founding board member of EEA.
Many initial members have developed pilots and production environments using Ethereum and bring unique understandings of enterprise needs. These include supply chain provenance tracking, inter-bank payments, reference data, securities settlement, and many others.
“Ethereum was the first blockchain supported in (Microsoft) Azure and it is evolving to address the needs of enterprises globally. Focusing on requirements like privacy, permissions and a pluggable architecture while retaining its public roots, Ethereum continues to widen the scope of what developers, businesses and consortiums can achieve”, Marley Gray, principal program manager at Microsoft
The original version of Ethereum had a public network that anyone could join. There has been a lot of controversies surrounding Ethereum in recent times. The platform witnessed a lot of criticism and attacks last year. Despite multiple hacks on Ethereum-based applications and a “controversial splitting” of the Ethereum network, enthusiasm in the network has apparently not diminished. On the contrary!
Enterprise Ethereum Alliance (EEA)
The Enterprise Ethereum Alliance was launched a few months ago with 30 founding members including big organisations in the banking, technology, energy and information industries like CME Group, Intel, ING, JPMorgan and Microsoft, as well as a number of emerging start-ups focused on blockchain like BlockApps, ConsenSys and String Labs.
The aim of the EEA is to work together to “build, promote, and broadly support Ethereum-based technology best practices, standards and a reference architecture” and create a private version of Ethereum open solely for verified participants.
It aims to allow members to open private blockchains for specific purposes, meaning financial institutions can have their own blockchain while shipping companies create another for their own purposes. The companies in the EEA will help develop the open-source Ethereum codebase in a way that ensures that business processes can plug into the platform and profit from its advantages.
Their efforts will be coordinated by the Enterprise Ethereum Alliance, which will guide the engineering of a standard blockchain technology based on the Ethereum blockchain and customized for the needs of all enterprise members.
“The goal of the Enterprise Ethereum Alliance is to align the various interest groups, the users, the start-ups, the large technology platforms, to a single roadmap so that we can take those steps together”, Jeremy Millar, board member EEA
Enterprise Ethereum will build upon the current Ethereum scaling roadmap and maintain compatibility and interoperability with public Ethereum. Ethereum’s public and private networks will share standard protocols, but have different configurations for privacy and security, depending on each organization’s needs. The top priorities for the alliance now include ensuring scalability and security.
J.P. Morgan is responsible for developing the basis of the blockchain tech for the alliance. Called “Quorum”, the bank’s code has been designed to add privacy protections into the mix, among other characteristics.
In fact, it is believed Enterprise Ethereum will contribute significantly to the overall development of Ethereum.
“The Enterprise Ethereum Alliance can address the concerns of organizations looking for private chain governance, but can also make contributions to the public Ethereum chain”, Jeremy Millar, board member EEA
“The Enterprise Ethereum Alliance project can play an important role in standardizing approaches for privacy, permissioning and providing alternative consensus algorithms to improve its usability in enterprise settings, and the resources the project and its members are contributing should accelerate the advancement of the Ethereum ecosystem generally” Vitalik Buterin, Ethereum Inventor
While the Ethereum alliance will focus on the development of private blockchains, the hope is that these will one day link up with the public Ethereum blockchain, which is open to all.
“That interconnection of public and private chains actually creates a very strong network,” “Each chain strengthens the other at an exponential level”, Alex Batlin, blockchain lead Bank of New York Mellon
“There’s enormous value in building the first alliance focused on shared design between public & private chains (i.e. Ethereum), why the two shall inter-operate and how that interoperability benefits tremendously both sides of the ecosystem”, String Labs (a crypto studio, incubator and investor)
Founding members of the Alliance’s rotating board of directors include Accenture, Banco Santander, BlockApps, BNY Mellon*, CME Group*, ConsenSys*, Intel*, J.P. Morgan*,, Microsoft, and Nuco. Also joining is IC3, or the Initiative for Cryptocurrencies and Contracts, an academic group consisting of researchers from universities such as Cornell University, UC Berkeley, and Israel’s Technion.
Non-board, and additional founding members are AMIS, Andui, BBVA, BP, brainbot technologies, Credit Suisse, BNP Paribas, BP, Chronicled, Cisco, Credit Suisse, Cryptape, Fubon Financial, ING, The Institutes, Monax*, String Labs, Telindus, Tendermint, Thomson Reuters, UBS, Vidroll, and Wipro. *also a Hyperledger member
“For ING, leading edge technology is the key to developing innovative solutions for our customers and the Enterprise Ethereum Alliance is a perfect example of how we play at the forefront of these developments. Ethereum is an extremely powerful multi-purpose blockchain and we’re proud to partner with the Enterprise Ethereum Alliance to leverage this computing platform to seek efficient and secure propositions for our clients”, Mariana Gomez de la Villa, Senior Program Manager Blockchain at ING.
“The Enterprise Ethereum Alliance was designed to enable organizations to easily deploy a single standard blockchain stack and build applications on that stack for the public, permissionless blockchain as well as for private, permissioned Ethereum blockchains. The EEA may turn out to be the most important project of 2017 in the blockchain ecosystem”, Joseph Lubin, Founder of ConsenSys, Co-Founder of Ethereum
The group is experimenting with new governance models designed to give the kind of control regulated enterprises need.
Specifically, a rotating board of directors will help create a sense of accountability, while various other blockchain-based governance models are being considered to further empower the ‘self-organizing’ network effect created by authors of smart contracts and other code developers working on independent projects.
EEA Vision Paper
In the meantime the newly formed Enterprise Ethereum Alliance (EEA) also has published a Vision Paper: Enterprise Ethereum Vision. In this paper, the EEA discusses many topics related to Pluggable Consensus, governance, interoperability, Ethereum protocol updates, secure code execution, storage and performance optimization.
The EEA has thereby identified five goals for 2017, including:
- Develop a sufficiently modular Ethereum implementation to separate and define clear interfaces between networking and storage layers – that is a prototype for pluggable consensus that minimizes the code changes required to switch consensus algorithms.
- Experiment with potential consensus algorithms, along with data privacy and permissioning frameworks.
- Develop a clear set of capabilities and performance characteristics that suit the needs of enterprises
- Develop a Version 1 specification for Enterprise Ethereum
- Leverage a robust governance process to ensure alignment and agreement on approaches
For more detailed information see: https://www.infoq.com/news/2017/03/Enterprise-Ethereum-Vision
Enterprise Ethereum Alliance versus Hyperledger Project
The Enterprise Ethereum Alliance, consisting of participants from different industries arrives as a challenger to several other blockchain collaborations, especially to the Hyperledger Project (see my blog: Blockchain and the Hyperledger Project: beyond the hype). Both are working on open source blockchain initiatives and there are a number of companies that are members of both. But should the Alliance be seen as a threat? Let’s look at the similarities and differences.
First, the HyperLedger Project is developing their own blockchain from scratch, led by IBM. The Enterprise Ethereum Alliance on the other hand is collaborating to tailor an existing open source Ethereum blockchain to enterprise needs
Second, the Hyperledger Project is a community designed to prevent dominance by a party or group. While IBM is one of the founding members of Hyperledger the code development is a collaboration approach by the community with no single party making the decision for inclusion. The Enterprise Ethereum Alliance is building and adding enterprise services to existing Ethereum. It is an attempt to bring Ethereum up to that same level of Business-to-Business requirements and patterns, rather than an organisation having to build those capabilities from scratch.
Third, the Hyperledger Fabric (the most widely used HL project) is being built from the ground up with enterprise (and private) blockchains in mind. Note that Hyperledger itself is a collection of projects (similar to Apache) that will eventually become integrated and reusable (Iroha, Sawtooth Lake, Cello, Composer, and Dashboard). EEA is formed around the Ethereum platform, which is built as a public permissionless BlockChain.
Future network of interoperable blockchains
It is becoming all the more clear that the future will be one where we will see a large number of different blockchains for various purposes. According to Vitalik Buterin ”the concept of one blockchain to rule them all — a unique blockchain carrying a unique digital currency and used for all distributed-ledger applications — is obsolete”.
Instead, we will have a network of interoperable blockchains, built on different distributed-ledger technologies and carrying different digital currencies, which can be federated to handle different aspects of distributed applications.
Ethereum and regulation
Last week a discussion session was held in Brussels, hosted by both European Parliament and European Commission on the future of blockchain regulation. In her closing remarks, Claire Bury, deputy director general of the European Commission’s Directorate General for Communications Networks, Content & Technology, cited Ethereum as “one of the more sophisticated applications”.
She went on to highlight the technology’s challenges, quoting developer Vlad Zamfir’s, (a consultant at Mavens of London and a leading member of the Ethereum community) recent tweet that “Ethereum isn’t safe or scalable”. In fact he stated that Ethereum is not safe, scalable and an immature experimental technology, but safer than other blockchain platforms.
“I say it because I want you to understand where I’m coming from when I react to feeling euphoria in the Ethereum community. I felt euphoria for about the first eight to 12 months of becoming involved in Ethereum— I am not feeling any euphoria anymore. I am mostly filled with concern about how everything could go horribly wrong, with feelings of being overwhelmed, with being unable to keep up with everything that I feel requires my attention”, Vlad Zamir
The surprising mention of the Ethereum smart contract platform by a regulator was echoed in the results of an audience poll. In response to the question: “What should regulation focus on?”, the most popular answer, displayed in full colour on a screen above was “Ethereum”!