2017: Ethereum will move from information technology to enterprise

Rage Review : From early Bitcoin experiments to senior bankers joining startups, to the establishment of the public Ethereum decentralized application platform, to the emergence of many private permissioned systems using blockchain, blockchain has developed into a top enterprise information technology (IT) trend before entering 2017. Ethereum is fully functional and simple to operate, and can be said to be the most used blockchain technology in enterprise development today. Enterprise Ethereum will be built on the current Ethereum scaling roadmap while maintaining compatibility and interoperability with public Ethereum. Relevant people said that Enterprise Ethereum will soon make a significant contribution to the overall development of Ethereum.

Translation: Flora

The enterprise use of blockchain technology has continued to develop at an almost incredible pace over the past year.

From early experiments with Bitcoin to senior bankers joining startups, to the creation of the public Ethereum decentralized application platform, to the emergence of many private permissioned systems using blockchain, blockchain has emerged as a top enterprise information technology (IT) trend heading into 2017.

Yet the market has moved beyond the incubation phase (where innovators effectively built the technology and its first few applications) and perhaps beyond the early adopter phase.

Gradually, mainstream enterprise IT organizations are educating themselves, experimenting with blockchain, and working to use blockchain technology to address new use cases and complex IT challenges.

More and more frequently, our customers are asking for help building MVPs instead of PoCs, or hardening production-ready environments.

Amid this whirlwind of adoption, it is also clear that certain key technologies are on their way to becoming potential de facto standards, such as blockchain platforms.

Why IT Loves Ethereum

Ethereum is arguably the most used blockchain technology in enterprise development today.

With more than 20,000 developers worldwide and holdings valued at around $1 billion, not to mention an emerging open source ecosystem of developer tools, it’s no wonder that Accenture found “every typical innovation lab” running and experimenting with public blockchains.

Cloud service providers are also supporting Ethereum as a first-class citizen: Alibaba Cloud, Microsoft Azure, RedHat OpenShift and Pivotal CloudFoundry all have Ethereum as one of their (if not the main) blockchain products.

The reason is that the software is widely used, and it is easy to download the Ethereum client and choose the development environment and development method you like.

Ethereum is fully functional and easy to use. A one-stop web developer can acquire the basics of the Solidity smart contract programming language in a few hours and develop an initial application in a few days.

The documentation is extensive, as are code samples, application frameworks, and training. So it’s no wonder that many companies use Ethereum as their blockchain of choice.

Today, companies are using or planning to use private Ethereum networks in a variety of areas such as supply chain tracking, payments, data privacy, compliance, and asset tokenization.

Three major challenges

Of course, it will be some time before we see investment banks fully move securities clearing and settlement to the Ethereum network.

That being said, we have indeed seen private Ethereum blockchain networks come into production, even in the financial services sector.

Enterprises adopting Ethereum face several challenges, notably:

1. Ethereum was originally designed for public chain adoption, where the need for trustless transactions outweighs absolute performance. Current public chain consensus algorithms (especially proof of work) are overkill for networks with trusted participants and high throughput requirements.

2. By definition, public chains have limited (at least initially) privacy and permission requirements. While Ethereum does allow for permissions within smart contracts and the network layer, it is not compatible with traditional enterprise security and identity architectures or data privacy requirements in a timely manner.

3. Obviously, the current Ethereum improvement process is mainly determined by public chain issues, and it is a challenge for enterprise IT requirements to become a priority.

As a result, many enterprises that have implemented private Ethereum networks have either “tweaked” or forked open source implementations or relied on proprietary vendor extensions to meet their needs.

Some of these companies are experienced and at the cutting edge of computer science, such as: BlockApps STRATO, Hydrachain, Quorum, Parity, Dfinity, and Raiden.

While understandable and, in fact, until now, the only effective approach, the drawbacks are obvious: lack of application portability, code base fragmentation, and vendor lock-in.

Historical parallels

Not surprisingly, enterprise technology vendors, corporate users, and Ethereum startups have been discussing this for months.

With the blessing and participation of ethereum founder Vitalik Buterin and the nonprofit Ethereum Foundation, those discussions have expanded to a dedicated vendor group, where the largest enterprise users and ethereum infrastructure leaders are collaborating on the roadmap, legal structure, governance and initial technical development.

To some extent, this follows the same path as other important platform technologies such as TCP/IP, HTTP, and perhaps more relevant (from a software perspective) Java and Hadoop.

Java never became a widely used enterprise development tool; in fact, it was originally developed for interactive television (especially set-top boxes and smart cards - anyone remember Java Cards?).

However, Java has many advantages for web development with a database backend (also known as Web client-server or three-tier architecture): it has comprehensive Web and database APIs; it offers "write once, run anywhere" platform portability, simplified object-oriented, syntactic programming structures, and a rapidly growing ecosystem.

In fact, the creation of Java Enterprise Edition (then called J2EE) was not only the work of Sun, but also the combined efforts of a bold startup (WebLogic) and a group of enterprise customers and other vendors. Similarly, Hadoop was originally created to index web and advertising services.

Who would have known that TCP/IP would become such a ubiquitous protocol today?

The envisioned solution

Based on this, I believe Ethereum is one of the few, in fact perhaps the only, blockchain technology with a similar trajectory and potential.

The early “public permissionless” vs. “private permissioned” split was a strong response to the Internet’s consideration of internal network usage, which was very popular before enterprises adapted to the security and scalability issues of public infrastructure.

By uniting key adopters, supporters and shapers of Enterprise Ethereum, we are exploring the provision of platform services, both for the technology as well as providing governance and tools for the creation of the “Enterprise Ethereum” standard.

It is a community of builders and doers, developing effective governance for business needs, but without being ‘dead by committee’ or having to ‘pay to play’.

Some of our collaborators have discovered that the refreshing nature of this approach and the speed of technological advancement can be achieved with a single standard and open source code base.

Furthermore, Enterprise Ethereum will build on the current Ethereum scaling roadmap while maintaining compatibility and interoperability with public Ethereum. In fact, we believe Enterprise Ethereum will soon make a significant contribution to the overall development of Ethereum.

Stay tuned...the best is yet to come!