Oracle, IBM, and blockchain leaders discuss how permissioned ledgers like Hyperledger Fabric could reshape enterprise payments and settlement. Ripple shows how permissioned systems scale where Bitcoin's mining model fails. Adoption accelerates when blockchain solves critical business problems with real budgets, not just proofs of concept.
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Well, let's talk about fraud just for a minute, because I feel like what I kind of want to get at is, like, from Oracle and IBM's perspective, is there ever going to be a regulatory environment where there could be a hybrid situation where digital assets could be used on things like Hyperledger, things like that? One of the things that I think, like, in technology we've seen is, like, early on in cloud computing, you go to a Fortune 500 company, they're like, well, we're not going to we're not going to do that because of security concerns. But now we're seeing there's like a hybrid model 10 years later. And so I just wonder, would there be a regulatory environment where there could be a hybrid solution?
So, yeah, I mean, the cloud. So the cloud, Oracle's— I've seen that the products that I previously owned was like Oracle's General Ledger, those products. Financial management for some of the world's biggest companies. And I saw within the space of 12 months— or I do a conference one year, 4 years ago, and we had some of our biggest customers in a panel. And I said, okay, this was in the drinks after, what do you think about the cloud? We've got, you know, our products now available on the cloud. What do you think? They're all like, yeah, maybe for HCM data, HR records, but financial data, don't see it happening. 5, 10 years, Maybe the next year the conversation went like this: what do you think about the cloud? Yeah, let's talk about how we can get there. And, you know, they're not public, so GE, you know, have been live on cloud for a couple of years.
What was their differentiator though in one year?
The change was, one, it was proven by some early adopters. There was— they actually went out and found out about it. There's also the cost thing, like You're playing an operating expense and not capital expense. But they could see the innovation, right? They were tired of hiring staff to manage the DBA and the hardware. They were tired of upgrading the hardware. They just suddenly realized there's a whole lot of mess that we don't need to deal with. And to payments, it's a similar problem. Now, the banks may work this out. But if they don't, other people probably will. There's a company called Ripple, which based in San Francisco, doing really, really well at disrupting cross-border payments. Now they have some way to go, I think, but that's just the beginning. So I think we will see massive disruption in these things that are very expensive, like cross-border payments. And as you've said, there are ways to Transfer Ripple does it. They know who everybody is, but they use a cryptocurrency to make the money transfer. And there will be companies that figure this out, and I think we'll see disruption. I think they will be permissioned ledgers, maybe using Hyperledger, which you know I think shows a lot of really good promise because that will scale. And I think that's the problem I have with. Bitcoin is— the mining process, the power requirements is problematic.
So with Hyperledger Fabric in particular, I don't want to go into too much detail, but essentially it's been designed to be modular with the sense that you can have modular consensus. So we have a non-mining consensus right now using Kafka for V1, but there's been conversations in the community about Which is not up with what Ethereum is doing, or Bitcoin. So you can do other forms of consensus to do other types of asset transactions. So I think that yields interesting possibilities for the future. I think it's— all the Bitcoin and blockchain technology in general is way early stages. They've been saying like last year was the year of the POC, this is the year of the pilot, next year will be the year of the production. Everybody's still kind of like testing it out, making sure how efficient it is. So I think you only have so many banks right now that'll actually settle with cryptocurrencies. So I think that's one thing that has to change. As they adopt it more as a form of payment and settle, then yeah, then you could have more of a hybrid model going forward. But it's going to take time. And I think the more people adamant about wanting it, to do business, then yeah, you'll see change happen quicker.
Yeah, I'll just add on to that. I interface with a lot of innovation teams and blockchain labs at these large industrial companies, people who haven't adopted cloud because they don't trust it, but they want to implement a blockchain solution for real. So there's so much talk within these little teams that have been allocated by some executive to decide what their strategy is. For blockchain. And I think until it's tied to a critical business problem that has budget allocated, that needs to be solved for a critical function that isn't solved by other solutions, like scaled adoption is just a hard thing to hope for. And you know, we're a startup, we just raised money, we have to hit revenue. We're just not banking on people POCs and proof of concepts driven by these labs, to be honest. So, uh, I, you know, I think if that's your function at a company that has momentum and power, it's about driving an elegant solution that— I think IBM has a whole team dedicated to this now. It's like looking at, you know, what, what about this technology is actually useful to something you're trying to solve.
Um, and so I've been pushing all of our conversations in that I think the analogy you made on cloud is a really great analogy because I was part of Siebel Systems, right?
Yeah.
Okay, and so it was an on-premise solution. For the most part, everybody went on-premise. Financial institutions still want on-premise, and so my reply is always, how many CDs do you want me to deliver our solution with? But it's— you don't know what's going to change. You thought that cloud perhaps would take 5 years. That's what your customers were saying because that's what they were projecting and that's what their business as usual plan was. And then next thing you know, AWS comes out with margins of 26% because they've bet fully on cloud. And everybody who was in on-premise solutions is like, oh shit, I fucked that one up because I wasn't forward-looking enough to realize that my customers may not tell me what I need to be designing for. What I have to do is actually look ahead and hear what their business problem is, but project what the solution will be. Instead of just listening to them.
Yeah, no, that's really true. And that's why I think the only problem with blockchain is I think there's still a lot of technical technology problems to solve for it to scale fast. And I think that rather than the will to adopt may be what slows us down. Now, you know, IBM has a huge team working on Hyperledger Fabric. I spent a lot of time looking at that. That's really good. We've been doing some prototyping things with that as well, and some of our customers are. And the fact that it's open source, and IBM, you know, credit to them, you know, they feel very good about pushing everything out there that they've done, all the research, and hopefully other people will jump on that because that is the way I see it. You know, it's a Linux Foundation project. You know, Linux was a great example. So I think if we can solve some of these technology problems and let it scale fast so we can get that throughput that people need for some of these big problems, then I think we may be surprised how fast it—
