Public vs Permission Blockchain Part 1 Finding a definition | Blockchain: Out of the Labs

I guess we'll just get started. Good afternoon, everyone. My name is Daniel Kari. I am the founder of a company called Pactum. We work with financial services companies and blockchain companies.

We do derivatives.

My co-founder, Anders, he's somewhere here. If you guys are interested in learning about managing risk on the blockchain, please come talk to me after this panel. I'm gonna go ahead and let these panelists go ahead and introduce themselves. The topic is Permission versus public blockchains or open blockchains.

Catherine.

Hello.

Okay, better. I'm Catherine Nicholson. I'm CEO and co-founder of a company, a startup called BlockCypher. We are like AWS for blockchains. We make APIs, so blockchain web services. We're blockchain agnostic and we mostly run open chains, which I guess is why I'm on this panel, and a number of private chains as well.

Hi, I'm David Haynes. I work for Oracle. We do everything, pretty much. I work specifically in the applications division. My role is to look at what our SaaS applications should look like in the next 3, 5, 7, 10 years, which means increasingly over the last Hi, my name is Shelby Kumar.

I lead commercialization and partnerships for a company called Filament. We intersect with Internet of Things and sort of the physical world, mostly connecting industrial equipment. We are working on a protocol that leverages aspects of blockchain technology, and happy to speak more about it.

Hi, Sean Barclay, Interactive Creative Director and founding member of IBM Blockchain. I'm also part of the Hyperledger project and specifically the Hyperledger Fabric. I have a very interesting job where I get a horizontal view of what's going on in IBM Blockchain and the Hyperledger project. I oversee basically all the product design, all the products and services from IBM Blockchain. Along with the solutions that you guys are seeing in the news these days. In terms of Hyperledger Fabric, the things that are separated, I think, from what we've been talking about in terms of Bitcoin and Ethereum, we deal with known identities. We also deal with no cryptocurrencies whatsoever to do transactions, and we also have smart contracts just like Ethereum does.

So my first question for the panelists is, how would you best define open versus permissioned blockchains? Who wants to take that? We can always hand you a mic.

I'll trade off. So how I define open versus permissioned is basically open, the analogy is the internet. Okay, it's open to anybody to participate, anybody that wants to join. It's a trustless environment, and you can jump right on in. A permission chain is a consortium. You know, as Sean mentioned, who the entities are that are participating in that permission chain because they have given permission to participate in that blockchain.

So I have a slightly different take on that. I think I'll be fairly controversial here just to get some questions.

By all means.

So I think permissionless, I don't think that's going to work. I think use cases will become very, very limited.

So you dislike cryptocurrency?

I'm not saying I dislike it. Personally, I love it, but I just don't think professionally, I don't think it's going to happen. The reasons: one, the DAO hack. We cannot get a group of people with no committee leadership to make decisions. The Bitcoin, you know, trying to figure out changes in the block size and how to get the throughput up has been going on for I don't know how long now.

3 years.

3 years, thank you. 3 years. 3 years. And people say, you know, oracles in IBM just slow. Not quite us. So that's a problem. It's a problem to get consensus for the entire world, especially where some of that world may be, you know, I don't want to pick on any country, um, you know, have bad intentions. Um, you know, there was a news article today, I don't know if anybody saw it, there's a company that produces hardware for Bitcoin mining, there's a backdoor, Bitmain I think it's called, there's a backdoor in their machines. which comes from mining. I mean, that's huge. So, you know, we have these vulnerabilities. When we say permissionless— sorry, when we say permissionless, my view of permissionless, I think the internet is permissioned. If I want to set up a URL, I can't just jump on anonymously. I have very limited information that will become public, but I have to go through the I have a lot of choice. I have, you know, GoDaddy or Google or whoever it is. There's a massive amount of choice and competition for me to register my domain name, but I do need to register. So I see that permission will have much broader meaning than maybe people think it is, where it becomes this kind of thing similar to the internet where there's a lot of places, but I do have to So, Filament's perspective and sort of where we come from is also opinionated.

I think it was a little bit less controversial. What we're representing is machines. So machines are gonna— we're gonna put devices into a mine for 10 years, and we have to trust that the contracts that we run on those devices will be maintained and trustable with no backdoors and no hacker access, and we just have something that's reliable. So to To date, the only thing that's battle-tested and reliable is the Bitcoin blockchain, which is why we use it. So the idea of governance and sort of the human politics and organizational politics around decision-making are fun to watch, and we sort of think of ourselves as spectators to the blockchain ecosystem. But what we're really looking for is something that we can put our machines into. I liked Jack's analogy. Point that hash to the identity of our devices. Are these contracts valid? Can they operate? It just needs to be true, and that's really what we look for. So I think our belief is that there will be— it's so early that there'll be multiple chains, different types of permissioning, different levels of that. We don't put any information, and so it's not necessarily open internet where everyone can participate, But what we do is when we're bridging the physical and digital world, it's under the ethos that there isn't a defined number of parties that will use that connection. So at the point that you're connecting a machine to the internet, it's the owner of the machine is the one who's paying for that network access. But in the future, the manufacturer might also be interested, a subcontractor might also be interested. You might be defining parties in the future.

And so we're setting up a foundation layer of infrastructure on something that's So I have a slightly different take, being the designer of the group here. So at IBM we have what's called design thinking, and it's all about thinking about the user, the use cases, and why you should actually be doing something. So the thing that you should all be asking yourselves, you know, whatever technology you do, is why do you need it? Why do you need a blockchain? Why would you just use a blockchain over a database? And in particular, when you think about business, okay, and you're moving assets, what do you need to do with those assets? Who are you working with? That will dictate whether you're using a public blockchain or a permissioned blockchain. So in a case like banks, they need to know who their customers are. They've tested all the different blockchains out there, and they were telling us and other parties that, look, blockchain's cool, Bitcoin's cool, Ethereum's cool, but here's why we can't use it. for doing business. And that was kind of the precursor to creating the Hyperledger Fabric and the Hyperledger project to create blockchain standards for business. They need to know who their customers are, and in a lot of cases they can't use cryptocurrencies to do the transactions. So they needed to also know who the parties are that are transacting in the network, so they needed a permissioned network setup to help facilitate that.

I just want to make sure that— Daniel asked a question on the definition between open and permissioned, not whether it's binary as the one or the other. I think that there is a coexistence between both of them, just like there is a coexistence between intranets and internets. And there will be applications which are much more inclined for permissioned blockchains, but there's undoubtedly a whole slew of applications that are much, much more elegant in an open blockchain. And so there will be a lot of coexistence between the two, and I think Filament can attest to