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Expert Interview (Part 1): James Kobielus on Separating Blockchain Hype from Reality

Since Syncsort recently joined the Hyperledger community, we have a clear interest in raising awareness of the Blockchain technology. There’s a lot of hype out there, but not a lot of clear, understandable facts about this revolutionary data management technology. Toward that end, Syncsort’s Integrate Product Marketing Manager, Paige Roberts, had a long conversation with Wikibon Lead Analyst Jim Kobielus.

In this first part of that conversation, we discussed the basic definition of what the Blockchain is, and cut through some of the hype surrounding it.

Roberts: Tell us a little about yourself.

Kobielus: I’m James Kobielus. I’m the lead analyst at Wikibon. I’m a veteran analyst covering data analytics, artificial intelligence and cloud data computing, and one of my research focus areas is Blockchain. In fact, I plan to write and publish a Wikibon research document on its maturation in the enterprise some time in the next few months.

Ah, good timing for the interview then. Let’s start with the basic definition. What exactly is the Blockchain?

Blockchain was defined initially by the legendary inventor of Bitcoin, Satoshi Nakamoto, which is not really his name, just a pseudonym. Blockchain is not a currency, rather it is a distributed, trusted hyper ledger. It’s essentially a database, but the architecture is distributed and can be stored on dozens, or hundreds, or thousands of separate computers that remain in synchronization with each other. The hyper ledger of data is stored in a secure fashion where everybody can read the Blockchain, and nobody can repudiate that they made an update to it because there’s a trust mechanism built-in. And the Blockchain cannot be changed. It’s immutable. Once you write something to a Blockchain, it cannot be deleted, it cannot be edited, so it’s a very specialized type of distributed database. In other words, where your traditional databases enable you to do what we often call CRUD operations; create, read, update, and delete the data. Blockchain only allows you to create and update the data by adding to it. You can also read it, but you can’t delete it. So, it’s specialized to a variety of applications that don’t require full CRUD semantics.

Okay, that makes good sense. CRUD operations are pretty familiar to anybody in the database space. How is the Blockchain different from other databases?

So, first of all, it’s not different in any radical sense from a number of approaches that have been around for a while now. There are plenty of distributed databases in the world from various vendors that use a variety of approaches to split the data into separate tables, or volumes, with varying degrees of synchronization across different servers. There are approaches in traditional relational databases such as sharding that enable the datasets to be distributed across many nodes.

What makes Blockchain different is that it is primarily for logging data for a secure, trusted record of transactions. Nobody can deny that they posted something because there is a complete audit trail in the updates that were made to the chain. There’s a distributed trust mechanism built into it that you don’t necessarily see in other data platforms or distributed data environments as an embedded capability.

Blockchain also is not limited in the types of data it can store, like say, a relational database is limited to storing structured data in structured tables. It can store pretty much any type of data within the blocks themselves. The term “block” actually has a real meaning in the Blockchain architecture. The data blocks can store textual data, video objects, application code or whatever you have. So, it’s quite versatile. It is a database that can store unstructured, multi-structured data, in addition to structured data.

Blockchain is open source. There are a lot of open source databases, of course. It was originally incorporated into Bitcoin and it’s still the foundation for Bitcoin, and for most cryptocurrencies, but Blockchain has evolved independently of the currencies. Using Blockchain doesn’t necessarily imply that it’s supporting a cryptocurrency application. It could be potentially supporting many kinds of applications.

There’s a core open source distribution, and there are various forks to that distribution, such as for the Hyperledger foundation. Hyperledger is an industry group that manages core Blockchain open source code. There is also the Ethereum Project managing other forks.

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Syncsort also sees Blockchain as important to our customers going forward. We recently joined Hyperledger so that we can help contribute to it, like we did in the early days of Hadoop and Spark. Blockchain has a lot of hype around it, though. One of the biggest things we’re trying to do is see what is hype and what is reality. Why do you think Blockchain has been riding so high on the hype train?

Hype serves an important purpose which is to raise people’s awareness and understanding of particular things. Usually in a marketing context, if you want to sell products, you have to make people aware of it and what it can do. Everyday technology has a hype cycle so, what you have to do if you’re a buyer is get down to exactly what the product does, what differentiates it from other approaches. How mature is this technology? Is it a stable code base? Are there standards? How widely is it adopted? How tested is it? Is there an ecosystem around it?

Blockchain has actually been around for about 10 years. Over that time, it’s grown in a lot of ways, one of which is in its tie to cryptocurrencies and the media around that. It has raised awareness of the Blockchain with a lot of business people, technical people and even consumers.

Supply chain management is one of the dominant use cases or patterns where I’ve seen Blockchain deployed. But the general understanding isn’t there yet. I wrote an article last May for SiliconANGLE called, “Blockchain isn’t ready for enterprise primetime. Here’s what will get it there.” The hype is well in advance of people’s understanding of what Blockchain is all about. That’s a fact.

It’ll take a couple of years for a general understanding across Blockchain and the technologies related to it to really get to a point where people are as familiar with Blockchain as they are now with something like mobile computing. So, the awareness will take a while. Also, it will take a while for the startup community to catch up. There are a LOT of startups, but none of them have really taken off yet. I could list some names, but they’re all unfamiliar to most people, even technical people.

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Ten years ago when Hadoop got started, there were a bunch of startups, and a few rose above the rest, and built substantial businesses based on Hadoop: Cloudera, Hortonworks, MapR and a few others. There is no equivalent, familiar brand, yet, that’s focused on Blockchain as a platform vendor. For this space to mature, for us at Wikibon to consider it mature, there needs to be a few of these startups that rise above the pack and survive. An enterprise IT professional needs to know that these companies will be around in a few years.

Also, many of the big, established IT vendors have already stepped in with their own Blockchain products and services. I mean, IBM certainly does. AWS launched their own platform over the past year or so. So has Microsoft, Oracle, and so has VMware.

What I’m getting at is all of these established IT vendors are starting to test the waters in terms of the Blockchain market with tech solutions and cloud services. None of them has had runaway success in terms of Blockchain platform, in terms of adoption. None have become the de facto standard either. We haven’t even gotten to the point where the M & A in this space has picked up.

The hype is very much in advance of the actual maturation in the shakeout of the Blockchain space

Yeah. There’s no Cloudera, or Hortonworks that’s come forward for yet.

Not yet, no.

Be sure to check out Part 2 of this conversation where we deep dive into the real practical value of the Blockchain and some of the business use cases where it shines.

Jim is Wikibon’s Lead Analyst for Data Science, Deep Learning, and Application Development. Previously, Jim was IBM’s data science evangelist. He managed IBM’s thought leadership, social and influencer marketing programs targeted at developers of big data analytics, machine learning, and cognitive computing applications. Prior to his 5-year stint at IBM, Jim was an analyst at Forrester Research, Current Analysis, and the Burton Group. He is also a prolific blogger, a popular speaker, and a familiar face from his many appearances as an expert on theCUBE and at industry events.

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