Amazon Managed Blockchain


Jonathan Fritz presents a “Deep Dive on Amazon Managed Blockchain.” Before getting into the details of Amazon’s service, he addresses some of the basic concepts regarding blockchain.

Many business networks rely on central authorities, which can be inefficient, expensive and require time-consuming auditing.

An alternative would be a consortium, which could achieve better outcomes by sharing information.  However, they may not agree on how data can be secured and fairly shared.  

Multiple organizations need to independently verify transaction histories and need a single, up-to-date, accurate view of data.

Business logic among multiple organization could be simplified through automation.

Asset transfers require an expensive and inefficient escrow.

A public network needs a way to maintain a tamper-proof history of transactions and global state.

Blockchain resolves these points and eliminates the need for a central authority in business networks.

THREE MAIN BLOCKCHAIN COMPONENTS:

1) Distributed ledger (bottom layer)
2) Consensus mechanism
3) “Smart Contract” execution environment (top layer)

LEDGER DATABASE

The journal is the essence of a blockchain. The journal records an immutable log of all transactions and is maintained by nodes in the blockchain network.

CONSENSUS MECHANISM

This is how the network assures what data goes into the ledger and the data that it’s in their stays correct.

SMART CONTRACTS

Where the applications function and interact.

PUBLIC AND PERMISSIONED NETWORKS

Public networks allow anyone to participate. Members are incentivized to maintain the network.

Permissioned networks limit the members to known entities.

They both have applications in the world.

AMAZON MANAGED BLOCKCHAIN

AMB is a fully managed service that makes it easy to create and manage scalable blockchain networks using open source frameworks: Hyperledger Fabric and Ethereum.

This is a decentralized network and is not owned by Amazon and is low cost: you only pay for what you use.

HYPERLEDGER FABRIC (available now)

Creates permissioned networks with channels to limit the transactions on the ledger each member can see.

Has smart contracts, called Chaincode.

Validation policy for executing Chaincode and is configurable.

Has no native cryptocurrency.

ETHEREUM (coming soon)

Create smart contracts using the Solidity language that runs across nodes in the network.

Very scalable.

Create permissioned networks or use public Ethereum network.

Configured to use Proof-of-Work consensus algorithm for public networks and Proof-of-Authority for private networks.

Anyone who can access the network can see all data on the ledger.

IN BRIEF

Amazon Managed Blockchain is a fully managed blockchain service that makes it easy for customers to create and manage scalable blockchain-based transaction networks using the open source blockchain frameworks Hyperledger Fabric and Ethereum.

Blockchain technologies enable groups of organizations to securely transact, run application code and share data without a trusted central authority.

What is a Merkle Tree?

Merkle trees allows efficient data verification across a network.

In cryptography and computer science, a hash tree or Merkle tree is a tree in which every leaf node is labelled with the hash of a data block and every non-leaf node is labelled with the cryptographic hash of the labels of its child nodes.

Decentralized networks operate without relying on a central source of truth, and instead rely on group coordination in order to establish a shared state. Trust is distributed among participants, so to have confidence that each participant is telling the truth, there must be a mechanism for guaranteeing that participants have not accidentally corrupted or intentionally tampered with the system’s state.

Hence, the Merkle tree: a data structure that was patented in 1979, and because of its unique content validating and performance qualities, has since become the backbone of decentralized software like Git, BitTorrent, ZFS, and Ethereum.

Hash trees can be used to verify any kind of data stored, handled and transferred in and between computers. They can help ensure that data blocks received from other peers in a peer-to-peer network are received undamaged and unaltered, and even to check that the other peers do not lie and send fake blocks.

“Devvio Has Solved Blockchain’s Biggest Challenges”

There are no shortage of bold claims and blatant hype in the blockchain industry.  And that’s not even including the crypto universe.

Enter Devv.io, which states it “Has solved blockchain’s biggest challenges.” Now, if you’ve been in the space a little while, it would be easy to dismiss this as just another hopeful promise and pay it no mind. 

But the reality is, someone ‘will’ solve blockchain’s biggest challenges. Technology moves forward.  Challenges ‘are’ solved. It’s an inevitability. In other words, regardless of how jaded one might become, in time blockchain’s current challenges will become little discussed history.

In the following linked article by John Koetsier, he interviews Devv.io CEO, Tom Anderson, who states: “We have the fastest blockchain in the world. We have the least expensive smart contract system. We have a solution for fraud, theft, and loss. We have a privacy solution that will work within government regulation. We have a stable coin that can be implemented within KYC and AML constraints. It is not until one has solved ALL of these problems that blockchain can truly fulfill its potential and become a world changing technology.”

Let me assure you, I, like so many others, wish to see this as demonstrable truth. The world is waiting.

Insolar: Open-Source Blockchain

The blockchain space continues to expand. Many blockchain entities will likely not survive in the next few years.  Yet some of them will become dominant.

It’s too early to determine which will be the winners.  It’s even possible that the future’s largest blockchains have yet to be established.

If we look to the internet and the worldwide web as a potential frame of reference, we might cite WordPress as an example of success for websites.  The internet has its roots in the 1960’s and gained massive adoption in the 1990’s with the introduction of the worldwide web.  WordPress is a web hosting platform that was established in 2003 as an open-source and free online software solution, which has since become the dominant website platform on the web.

It’s not inconceivable that an open-source blockchain could follow a similar trajectory, although such is not guaranteed, since there are a number of factors that can bring about massive adoption, not the least among them being ease of execution, security and cost.

Hence, it’s interesting to see Insolar describe itself as “building an open-source enterprise-grade blockchain platform to enable seamless interactions between companies and new growth opportunities powered by distributed trust.”

Insolar further states that “its code is open source and its research is freely shared; it supports the most popular enterprise languages (Golang and Java); and it allows 3rd party microservices, dApps, and smart contracts.”

Additionally, “Insolar doesn’t require expensive upfront investments in IT labor and infrastructure to deploy; it can be run on the cloud, securely and scalably.”

In this article, Insolar is launching a new blockchain-as-a-service platform, the company outlines their “fourth generation” technology as “an open-source, enterprise-grade blockchain platform and ecosystem that helps companies rapidly and affordably deploy distributed business networks.”

I will be interested to see if Insolar , or some other open-source blockchain, can make a name for itself in the space.

EOS Update from Brendan Blumer

Brendan Blumer, Block.one Co-Founder and CEO, speaks about their 4 billion investment, creating a new internet infrastructure and allowing people to take control of their privacy.

Block.one is the company behind EOS.IO, which is a blockchain protocol powered by its native cryptocurrency EOS.

EOSIO operates as a smart contract platform and decentralized operating system intended for the deployment of industrial-scale decentralized applications through a decentralized autonomous corporation model. The smart contract platform claims to eliminate transaction fees and also conduct millions of transactions per second.

In the video interview, Blumer describes blockchain as a secure way to store and transfer data. Whereas, the internet was a fundamentally insecure way.

He notes that there won’t be one blockchain for all purposes. Different types of governance will tailor to different types of industries.

Blumer also touches upon blockchain’s innate ability to create transparency, even in Force majeure circumstances.

What is Blockchain Tokenization?

Tokenization

Tokenization is an intrinsic part of the Blockchain technology that serves the purpose of platform identification and accessibility.

For example. Bitcoin is a token.  And so is Litecoin, Dash, and other currencies that function over a blockchain. While tokens can represent money, as in the examples above, they can also represent other things.

The demand for a particular blockchain product or service is usually the main determinant of the value and eventual market price of its token. This is why there is a variation in the prices of different altcoins in the Blockchain environment. For example, Bitcoin is more readily accepted by merchants than Litecoin, and is consequently more valuable.

Broadly speaking, tokenization is the process of converting some form of asset into a token that can be moved, recorded, or stored on a blockchain system. That sounds more complex than it is. To put it simply, tokenization converts the value stored in some object — a physical object, like a painting, or an intangible object, like a carbon credit — into a token that can be manipulated along a blockchain system.

Blockchain tokenization is powerful because it has the potential of  tokenizing everything from “gas” on the Ethereum blockchain (GasToken), to fine art, real estate, or even “attention” (Basic Attention Token), which have applicability in social media and advertising. There is also the possibility of tokenized governance — making 1 token worth 1 vote in meetings for some organizations.

The Tokenization of Things

In October 2017, Matthew Roszak discussed how we’re transitioning from an old model where money is used to equal power; changing to “money becoming technology” via the rise of cryptocurrencies and tokenized assets on the blockchain; and ultimately becoming “technology equals power.”

In brief, a token is a scarce, digital asset. Bitcoin was the first.

Roszak states that Bitcoin is one of the greatest inventions of our time. More specifically, it’s one of the greatest technological, financial, political, industrial and humanitarian inventions of our time.

Blockchain is like the rails for Bitcoins (tokens), which represents the cars that run on the rails.

Roszak discusses how things can be tokenized, not just money, resulting in new opportunities for businesses and entrepreneurs.

Blockchain and tokenization is one of the greatest generational opportunities for entrepreneurs and investors. 

He notes how technology generally outpaces regulation and that the early phase of technology adoption includes some risk and uncertainty.

Matthew Roszak is co-founder and chairman of Bloq, a leading blockchain enterprise software company. Mr. Roszak is also founding partner of Tally Capital, a private investment firm focused on digital assets and blockchain-enabled technology with a portfolio of over 20 investments, including Block.One, Civic, Factom, Rivetz and Qtum.

Mr. Roszak is a blockchain investor, entrepreneur and advocate. He has spent over 20 years in private equity and venture capital with Advent International, Keystone Capital Partners, Platinum Venture Partners and SilkRoad Equity, and has invested over $1 billion of capital (from start-up to IPO) in a broad range of industries. Mr. Roszak is a director and beneficial owner of Eboost, Enter Financial, MissionMode, Neu Entity, Onramp, SolidSpace and TrueLook.

Mr. Roszak serves as chairman of the Chamber of Digital Commerce, the world’s largest trade association representing the blockchain industry. In addition, Mr. Roszak serves on the board of BitGive, a no This talk was given at a TEDx event using the TED conference format but independently organized by a local community.

Vitalik Buterin Explains Ethereum

In 2014, Vitalik Buterin explained decentralized applications (dapps) and Ethereum. He notes that dapps reduce costs, remove points of failure, prevent censorship, promote transparency and trust.

Ethereum borrowed the concept of distributed consensus and cryptographic proof that makes cryptocurrencies such as Bitcoin so effective in trustless payments. Ethereum then extended the use of these technologies to trustless agreements (Smart Contracts). This allows developers to easily build innovative, new products on a collusion-resistant foundation without censorship.

In brief, Ethereum is a platform that makes it possible for any developer to write and distribute next-generation dapps.

Vitalik Buterin is a Russian-Canadian programmer and writer primarily known as a co-founder of Ethereum and as a co-founder of Bitcoin Magazine.

What Is Hashing in Blockchain?

Blockchain validation relies on data encryption using cryptographic hashing.

Simply stated, a hash function takes some input data and creates some output data.  More specifically, a hash function takes an input of any length and creates an output of fixed length.

And more precisely, cryptographic hashing represents processing the data from a block through a mathematical function, which results in an output of a fixed length. A fixed length output increases security, since anyone trying to decrypt the hash won’t be able to tell how long or short the input is simply by looking at the length of the output.

An ideal cryptographic hash function should have five properties:

  1. It would be deterministic so the same message always results in the same hash
  2. It would be quick to compute the hash value for any given message
  3. It would be infeasible to generate a message from its hash value except by trying all possible messages
  4.  A small change to a message should change the hash value so extensively that the new hash value appears uncorrelated with the old hash value
  5.   It would be infeasible to find two different messages with the same hash value

There are lots of different types of hash functions. One blockchain cryptographic hash function is SHA-256 (designed by the United States National Security Agency). When there is a number such as “256,” it generally refers to the length of the output.  In this case, SHA-256 will produce a 256 bit output. So, an input value of “Hi,” “Blockchain” or “1,000,000” will all have an output of 256 bits (64 English characters).

Usages of Blockchain

Blockchain represents data and transaction security: unchangeable blocks of data that are decentralized and distributed on public, private or hybrid computer networks. (“Immutable Distribution.”) Blockchain establishes faster, more efficient, more transparent, more accountable and less expensive operations and transactions.  Following are some examples of blockchain usage.

ACCOUNTING AND AUDITING

Blockchain decreases the possibility of errors and ensures the integrity of the records.

HEALTHCARE

Healthcare devices will be able to store data they generate on a healthcare blockchain and append the data to a person’s medical records.

REAL ESTATE

Property blockchains can quickly verify finances, reduce fraud and provide transparency to the entire process.

ENERGY

Blockchain could be used to execute energy supply transactions, as well as metering, billing and clearing processes.

RECORD MANAGEMENT

Governments are responsible for maintaining individuals’ records, such as birth and death certificates. Blockchain can simplify record keeping and make the records far more secure.

VOTING

Every vote can be transparently and irrefutably traced to its source without sacrificing a voter’s anonymity. You cannot change the past and you cannot hack the present and you cannot alter access to the system.

DATA STORAGE

The fact that every computer on the network is continuously verifying the information makes the blockchain an excellent tool for storing public data.

TOKENIZATION

Tokens bind the physical and digital worlds.  Tokens stand as the identity of their respective blockchains, offering access to the services or solutions provided by their resident platforms.  More famously, they also serve as digital assets and opportunities for investment, depending on how much the community values their platforms. In the physical realm, tokens are used for supply chain management, intellectual property identification, anti-counterfeiting and fraud detection.