Interview with Brian Behlendorf, Executive Director of the Hyperledger Project

Gartner gave blockchain a huge pat on its back when it included this technology in its Top 10 Strategic Technology Trends for 2017 . But will it be smooth sailing from here on? We invited Brian Behlendorf, Executive Director of the Hyperledger Project to talk about the project’s most important accomplishments and how countless industries can benefit from blockchain’s use.

JAXenter: Hyperledger is one year old. What are the most important accomplishments so far?

Brian Behlendorf: At the end of January, Hyperledger has seen 3,821 commits made by 119 contributors representing 222,865 lines of code. Fabric and Sawtooth Lake projects picked up new contributions, developer momentum, and significant commercial interest over the past year. More than 25 proof of concepts and pilots built on top of the technologies in 2016 by some of the world’s leading financial services institutions. Hyperledger also launched Healthcare Working Group in October to house and foster technical and business-level conversations about appropriate applications for blockchain technology.

We owe a lot of the growth and success of Hyperledger in its first year to The Linux Foundation’s model of governance. The model has allowed for collaboration at the highest level among organizations of all shapes and sizes, as well as for developer communities, and technical experts to iterate in an open, fair and structured manner. All contributions are valued and are encouraged within Hyperledger.

JAXenter: What are your plans for the near future? What is the next milestone for Hyperledger?

Brian Behlendorf: As we head towards further maturation of the Hyperledger umbrella projects to 1.0 releases and beyond, our goal is to increase enterprise developer interest and traction by communicating the benefits of developing in a truly open community. Like we see in other thriving open source communities, the power comes from public development processes, from the “do-ocracy” where governance is based on participation, and where development ideas get input and scrutiny from some of the brightest developers in the industry. The end result of all this is code that will change how the world works.

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JAXenter: New members Airbus, Wanda, and Energy Blockchain Labs point to more industries with potential to be reinvented by blockchain technology in 2017. What other industries can benefit from blockchain’s use?

Brian Behlendorf: It’s hard to argue there is an industry that can not be touched by this in some way. Every industry uses transactions to get work done. Every industry has trust challenges. Every industry suffers from contracts being manually executed and assets being opaque. Some will adopt before others, though I think every industry will have early adopters who benefit.

Banks and other market-makers will not accept a new player who simply attempts to centralize at a different layer.

JAXenter: Is the fact that more industries are interested in putting blockchain to use an indication that this technology is ready to go mainstream?

Brian Behlendorf: It’s not too crazy to think that in the next five years, nearly every Fortune 500 company (perhaps even the top 1000) will be transacting on a distributed ledger, and automating their processes using smart contracts. Blockchains really only make sense as a way to build a common system of record within a network of peers – that is, you can’t implement a blockchain by yourself, you need to do it with others. So anywhere where a company participates in a network of trading partners, a supply chain, a regulated market, etc., then they likely will see an operational and strategic investment in blockchain tech. Plus, the prospect for using this tech to go beyond a common system of record, to creating actual digital assets on a chain (an insurance contract, an options contract, shares in a company, etc) is very real and people are already piloting this. Sadly, most consumers won’t see this, as this will be mostly about making B2B systems more efficient and transformative. But it should result in more competitive and trustworthy marketplaces.

SEE ALSO: It’s up to the developers how soon blockchain goes mainstream

JAXenter: When we spoke last, you mentioned that it’s up to developers how soon blockchain goes mainstream. Has the number of developers working on this technology increased?

Brian Behlendorf: The number of developers showing up at our meetups and events, on our projects, and in the broader community continues to grow. As more of them understand the underlying value of the approach — not hype and VC-driven startups, but at the places where real money can be saved, or real new applications built — I believe that’s had an effect on the broader community of developers who were sitting this out so long as it was exclusively associated with cryptocurrencies. People can now see how to fit this into existing governance models, existing transaction networks, existing business relationships, disrupting some legacy trusted-third-parties here or there but not requiring everyone to change their business models simultaneously. This pragmatism may be interpreted as a compromise to some, but to others it’s essential to getting started, to demystifying everything.

We’re still developing what you see in mature technology domains from a management and monitoring and design perspective — what you might call the “DevOps of blockchain”.

JAXenter: In your view, what are the limitations of blockchain?

Brian Behlendorf: Many real-world applications will be held back by transaction rate issues until we have a mature stable of technologies and techniques for scaling transactions across chains. This is true even in a consortium chain setting, where you can achieve much higher transaction rates than on the public chains but getting to tens of thousands of transactions per second across geographically diverse networks with non-trivial validation logic running on each node will be an architectural and design challenge for many developers working in this space. The good news is there are many use cases for much lower transaction rates (think land title, think medical records for a small country, think supply chain flows for a given industry), and developers at Hyperledger are working on great techniques for addressing scalability. This is just a function of time.

There is a broader issue that this domain is still very young, and we’re still developing what you see in mature technology domains from a management and monitoring and design perspective — what you might call the “DevOps of blockchain”. With the Cello project we are starting work in this space, the end goal of which is easy and fast deployment and management of the underlying layers so that everyone else can focus on smart contracts and apps on top. We’ll make substantial progress this year, but this can be a challenge to going to production today.

JAXenter: Infosys Consulting said in its white paper titled Blockchain Technology and the Financial Services Market that banks are joining forces with the FinTechs because they need to understand the technology . Do you think the involvement of FinTechs could lead to a broader adoption of blockchain technology?

Brian Behlendorf: I’ve not read the report, so here’s my take: No doubt there is a wave of young companies specializing in blockchain technology, and the banks are partnering with many of them simply because innovation can be difficult inside of large, cautious, regulated institutions. That’s a tremendous opportunity for these new startups but they (and their investors) should be cautious about business models and approaches that attempt to use blockchain tech to establish themselves as the new center of the ecosystem. Many small companies have what I’d call SWIFT-envy and PayPal-envy — highly critical of centralized financial systems that create substantial financial return for their owners, and rightfully pointing to blockchain technology as a way to decentralize those systems. But that doesn’t mean the banks and other market-makers will accept a new player who simply attempts to centralize at a different layer. So it will be a highly competitive world, with banks hesitant to form exclusive relationships, and the technology itself makes lock-in and high margins a challenge.

JAXenter: IMF claimed in its piece called The Internet of Trust that blockchain can become “the next internet.” What’s your take on that?

Brian Behlendorf: I think Ginny Rometty at IBM said it better — what the Internet was to information, blockchain technology will be to transactions. This is all additive to existing Internet technologies and efforts, and will hopefully help counter some of the tech trends that favor re-centralization. This is a much better kind of “cloud” than trusting one vendor to hold all our data and all our apps for us. In that way, long term, this is key to reinventing how much of the utility of the Internet is delivered to us. But it will sit next to and above HTTP, SMTP, TCP/IP, and all the rest.

Thank you very much!