Microsoft Azure CTO hopes blockchain will connect all industries and use Bletchley to create a cross-industry blockchain alliance

If Microsoft Azure CTO Mark Russinovich is right, R3cev may be just the beginning.

Mark Russinovich envisions a world where a single blockchain consortium encompasses all industries. In fact, given that blockchain’s network effects can only scale with the number of participants, he believes that such a future is inevitable as companies pursue efficiency in numbers, meaning that all industries will use blockchain in the future.

And so far, the evidence suggests that Russinovich is right.

With the formation of the R3cev blockchain consortium last year, blockchain consortiums have become popular, and the number of announced blockchain groups has continued to increase. In order to meet the growing demand, Microsoft has also launched the Bletchley project, which aims to make it easier to establish blockchain consortiums.

While Microsoft’s suite of blockchain-as-a-service (BaaS) tools will continue to be open to all protocols, consensus algorithms, and databases, Project Bletchley was designed from the outset to help peer companies leverage their similarities even if they are competing against each other.

Rather than wondering where the next alliance will emerge, Russinovich believes we need to look at the various existing industry alliances. He said that the industries in which these alliances are located have intermediaries, and these industries are waiting for blockchain to make them more efficient.

Russinovich said financial firms are currently thinking:

“If they’re going to be disrupted by blockchain, they’d rather do it themselves and take advantage of the disruption.”

Disruptive Alliance

According to Ecommerce Digest, alliances are generally owned and operated by competitors within an industry to create shared standards, unify supply chains and self-regulate in order to return benefits to the industry as a whole.

Some examples that demonstrate the diversity of such vertically connected organizations include the UK Retail Consortium, connecting retail outlets and related businesses in the region; the Additive Manufacturing Alliance, based in Columbus, Ohio and run by the EWI Association; and the more recently established Healthcare Internet of Things Alliance, a non-profit affiliate of the Intelligent Health Association.

While Russinovich did not elaborate on which alliances Microsoft is approaching specifically, he said the company has "significant interest" across industries, including retail, manufacturing, finance and healthcare. "All of those are industries we're looking at," he said.

To speed up the formation of related blockchain alliances, Bletchley provides a distributed ledger module framework with a variety of different functions, all of which are requested by previous customers. Instead of starting from scratch, companies can form alliances and share what they already know.

Russinovich calls this approach a best practice for blockchain as a service.

He said:

“That’s part of the vision for Project Bletchley, to focus on solutions based on what we learn with our partners, where the technologies can be adapted to solve problems together, and others in peer organizations can quickly leverage those solutions.”

Protecting the Alliance

But building an alliance to share skills and make supply chains more efficient is only valuable if that alliance is secure.

Currently, Microsoft is working on two efforts aimed at strengthening security in two key areas: smart contracts running on consortium blockchains, and the edge of the blockchain where third-party data enters.

At the time of Bletchley’s initial announcement, Microsoft revealed a new form of middleware, called ‘cryptlets’, designed to act as gateways to allow trusted data to interact with blockchains.

Cryptlets are code that can be executed in a verifiable way - a blockchain can call out a cryptlet, which can then be "injected" into the distributed ledger with real-world data, such as the price of a commodity from a verified source. In a white paper from Microsoft, the company describes cryptlets as a kind of 'fabric' for building a blockchain enterprise consortium.

While Cryptlets focuses on ensuring the edges of a blockchain are secure, Kinakuta aims to make what happens on the blockchain less buggy.

Kinakuta, an early-stage working group formed last week, has invited a number of industry leaders to help make smart contracts more secure. This type of effort is crucial if an industry-level alliance is to be formed.

As the DAO smart contract debacle earlier this year made clear, vulnerabilities in these programs can cause widespread ripple effects if enough people agree on the terms.

To reduce the likelihood of those bugs, Microsoft director of business development and strategy Marley Gray said Kinakuta uses a custom coding language designed to minimize human error.

Gray said:

“Kinakuta will be closely associated with the Bletchley project. Bletchley is very much about making blockchains secure.”

Building on the past

By creating a framework that consortium members can connect to and being able to provide consortium members with a secure way to input their own data and data from third-party institutions, Russinovich believes Microsoft has laid the foundation for the explosive growth of the number of blockchain industry groups.

Microsoft first entered the blockchain industry in late 2014 when it formed its first partnership with bitcoin payment service provider BitPay. A year later, Microsoft launched a new blockchain-as-a-service toolkit hosted on its Azure cloud development platform.

Since then, Microsoft has added more than a dozen third-party “tools” to the platform, including recently adding a service created by cryptocurrency projects Monero and Tendermint.

As part of Microsoft's efforts to lay the groundwork for a broadly expanded alliance, they established Project Bletchley in July this year, and earlier this month Microsoft opened its BaaS product to all users of its Azure test environment.

Microsoft is currently working on cryptographic tools designed to bring greater privacy to future members while also leveraging the reliability of a shared ledger. According to Russinovich, his goal is that within the next three years, consortia created using Microsoft’s tools will be larger and have fewer middlemen.

Russinovich concluded:

“I think we’re going to see blockchain products inside a lot of companies, alliance participants from a variety of industries will work together, and we’re going to see some real-world use of blockchain.”