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A former Salesforce manager starts a debate about public and private blockchains in the community

May 16, 2020

The question of whether Companies have to use public or private blockchains for their business It has become very relevant today. A recent Fortune Business Insights report predicted that the blockchain market will reach $ 21 billion by 2025, highlighting the fact that Large companies bring new impulses to the market through new investments.

Not surprisingly, as more players enter the blockchain arena, information about the best blockchain solutions for businesses is discussed. During the Online Consensus: Distributed Conference, Adam Caplan, senior vice president of new technologies at Salesforce, said that public blockchains are not secure enough to be used by companies.

What does the market need?

Upon request, Caplan told Cointelegraph that Salesforce customers want all the benefits of a public blockchain, e.g. B. Audit trails and full transparency. Business customers still need data to be selectively shared::

“Thats what our customers say you want to Share data with our partners and work more closely together; All the benefits of classic blockchains, but you don’t want to share information with everyone. They may want to share certain data with companies within their network, but not outside the network. They also require detailed security tools. “

A former Salesforce manager starts a debate about public and private blockchains in the community
A former Salesforce manager starts a debate about public and private blockchains in the community

Regarding his own use case, Caplan said that the Salesforce blockchain primarily appeals to business-to-business customers who need different permissions and security settings on a blockchain network. He noted that it is important for these organizations to control and understand who can access the data. As such, Caplan mentioned this Public blockchains for business use are beginning to “fade” as enthusiasm for business blockchain technology comes trueand added:

“Now we are leaving the excitement of the corporate blockchain from a few years ago and We focus more on the business value and return on investment that blockchain can bring to businesses. As we move in this direction, elements like managing your own infrastructure, decentralization, and the importance of consensus along with the theory of public blockchains for businesses are beginning to fade away. “

While Salesforce may do so, Caplan has determined this Public blockchains provide security for certain use cases. He mentioned that Bitcoin (BTC) is safe as long as it is completely public. He also noted that financial use cases with digital currencies and assets are suitable models for public blockchains.

Why should companies use public blockchains?

The question then is whether public blockchains can be used for a variety of business use cases, including those outside of finance. This is important to consider, especially when it is recognized why companies would use blockchain networks at all.

The results of an EY report by Forrester Research show this Most companies see blockchain technology as a solution to improve business performanceMaintain data integrity, which can lead to new revenue or business models. Other use cases for blockchain include improving efficiency in supply chain management, payment support processes and digitizing document flows.

However, the report states that The pressure to join a private network founded by another company is not a key factor in the introduction of blockchain technology. While private blockchains are a popular choice among companies, the report highlights the significant and growing interest in public blockchain networks for all of the use cases mentioned.

Paul Brody, global blockchain leader at EY, went on to explain to Cointelegraph that classic blockchain systems can do two things that traditional systems cannot:

“First of all, blockchains can Conduct transactions reliably and properly without intermediaries. Secondly, act as an immutable form of recording. Both functions are things that private blockchain networks are unable to do. “

Brody explained that by definition Private blockchain networks require intermediaries. In addition, he said that since then, these systems are unlikely to ever be viewed as immutable record storage There are not enough nodes in the independent systemsAdd: “While the Ethereum blockchain has 10,000 nodes, it’s not uncommon for private blockchains to have some nodes and run in a single cloud provider infrastructure.”

It is proven that There is a good chance that public blockchains will flourish in the business worldMuch remains to be done to ensure security, scalability, regulatory requirements and more. In addition, EY worked with Microsoft and ConsenSys to develop an open source blockchain project called Baseline Protocol that works in Ethereum’s core public network.

According to Brody, the idea for the baseline protocol came about a year ago when EY was working on another project called Nightfall: A solution to ensure a scalable, cost-effective, reliable and private infrastructure for public transactions. Brody noted that Nightfall has removed the major hurdles to making public blockchains usable for private transactions (lowering fuel fees), although some challenges remain. The The Baseline Protocol tries to resolve the remaining problems related to companiesand according to Brody:

“Public blockchains need to verify participants’ identities and we wanted to close this gap. The baseline protocol takes over Nightfall’s work and adds additional elements to private transaction informationsuch as identity management, with which companies can carry out secure and reliable end-to-end transactions for public blockchain. “

While progress on the baseline protocol is still ongoing, ConsenSys lead developer John Wolpert mentioned this The baseline protocol can improve contact trackingThis particularly affects the vulnerabilities identified in a recent Google and Apple proposal for a contact tracking system.

Related: Zero Knowledge Tests Explained

In terms of security, Brody found that the The baseline protocol solved the security problems associated with public blockchains using zero-knowledge testsMention that corporate data is never stored in the chain. The only information stored in the chain in this case is links, hashes and mathematical tests. He further explained that zero knowledge tests are key to solving scalability problems in the Ethereum blockchain, adding:

“In December last year, we were able to complete 20 transactions in a single block. We have a mathematical roadmap that allows us to perform more than 2,000 transactions in a single block. Zero knowledge tests are a key technology to enable scaling“”

Kevin Feng, VeChain’s chief operating officer, also mentioned that public blockchains have come a long way in recent years. Feng told Cointelegraph that Once companies understand the benefits of public blockchains, they will find that open networks are better than private ones::

“We have been watching the tendency of many companies to open blockchains. Many of our customers, like Walmart, use the VeChain blockchain to track their product information and then digitally certify this data. “

Feng mentioned that VeChain recently partnered with well-known fashion brand H M to provide customers with supply chain tracking data. He explained that With “My Story” more than 4,000 sustainable products were tracked.;; A tracking platform operated by VeChain and developed by the international classification society DNV GL.

Like the baseline protocol, VeChain uses zero knowledge tests. Feng pointed out confidential information is not stored in the chainInstead, the hashes or timestamps are placed on the blockchain so that everyone can see certain information that happened at certain times.

Feng continued to notice this Governance is another important concern when it comes to companies using public blockchains However, they have different governance mechanisms such as the “authority test”, in which the authority nodes are operated by companies or individuals instead of being dependent on the energy of the mining industry.

Danny Brown Wolf, director of associations at Orbs, said the same to Cointelegraph Several companies are interested in moving from private blockchain models to hybrid approaches and eventually switching entirely to open blockchains.

Wolf explained that There is still concern about the control of private blockchain networks by “trusted third parties”.. “Salesforce acts as a trusted third party, which means companies have to trust Salesforce to process their data,” he said. Like EY and VeChain, Orbs is also trying to solve the problems related to public blockchains for business purposes, as Wolf noted:

“”We develop orbs to solve governance problems by giving each application its own virtual chain that is connected to the main chain. This enables autonomy in terms of governance, which can take place at the virtual chain level and not at the infrastructure level. In return, the power of organizations is easily maintained while still offering strong guarantees for a public blockchain to users and employees. “

The debate is on …

While it is obvious that Companies can serve both private and public blockchains, may be too early to know if one is better than the other. Brian Behlendorf, CEO of Hyperledger and advocate of open source, told Cointelegraph that it is inappropriate to say that public blockchains are better for all potential business use cases, and it would be inaccurate to say that public blockchains have no potential uses for businesses. Said:

“We can already see that Some companies have decided to use public blockchains only to a limited extentWhether it receives payments in cryptocurrencies, non-consumable tokens like baseball trading cards, and even some that are similar to stable coins, like the Tradeshift / Monerium e-money association. We also believe that there is a lot of potential in public and authorized distributed registers like the Sovrin Foundation Identity Utility Network. “

Although this may be the case, Behlendorf found that the vast majority of industries interested in using blockchain technology continue to have legal requirements regarding data residency, data protection, auditing and taxation, as well as requirements for top performance can currently support publicly distributed registration. For these reasons, Behlendorf believes that It will take companies a long time to trade mainly in public blockchains. Following Behlendorf, Gari Singh, the chief technology officer of IBM Blockchain, expressed similar concerns as Cointelegraph:

“Generally speaking, Blockchains without permission are not suitable for most current business use cases. Organizations must meet many regulatory and compliance requirements, and without knowing who the participants are (both validators and customers), it is not possible to meet these requirements. “

While a private blockchain model currently seems more suited to the needs of companies, Brody remains optimistic and notes this Private blockchains still have no key element for the successful functioning of companies, an ecosystem that works:

“Most private blockchains don’t have subscribers. Even those with subscribers don’t have a robust or competitive service provider network. But Ethereum has a vast network of service providers. Our goal is to migrate this DeFi network from transactions that are fully public to private transactions. “

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