Blockchains in the Cloud: What a Day for a Daydream!

by Tim Sloane 0

IBM’s announcement last week that it will deploy its blockchain technology in the Docker environment within IBM’s Bluemix cloud was touted in this Quartz article. In actuality, cloud deployment adds complexity to blockchain deployments by increasing the number of potential deployment models and introducing new non-standard ways of controlling access. This article in Quartz correctly indicates that IBM is investing heavily in blockchain technology but is overly optimistic regarding how cloud deployment might speed adoption:

“Large businesses (especially those in financial services) have been trying to figure out how they can tap into the blockchain, the technology underpinning the bitcoin cryptocurrency. They’re intrigued by the possibilities of a transparent and cheap ledger system capable of creating an immutable record of transactions and monitoring sensitive data, like health records. But keeping that type of record secure—especially if it’s housed in the cloud—is a major concern. With an announcement on Friday, IBM is trying to get ahead of those questions.

Big Blue announced the launch of new blockchain services that run on its cloud and Docker, which lets developers test and launch applications. The hope is that this reduces the time it takes to get a blockchain service up and running—but IBM is also hoping it brings flocks of blockchain developers to its cloud. “With this announcement, we’re looking to rev the engine on mass distribution,” explained IBM’s VP of blockchain technology Jerry Cuomo in an interview.

A key piece of its new services is a framework for how companies should approach security when it comes to running a blockchain network in the cloud. In the financial services industry, regulations and data privacy concerns are major impediments to mainstream blockchain adoption, says Cuomo. By outlining IBM’s strategy for protecting blockchains, the firm hopes industry groups will follow.”

The real challenge associated with implementing a business solution on any blockchain is understanding how the blockchain will alter each participant within the value chain and how to manage read/write access across all of the actors that must participate in the business solution being proposed. Mapping cloud software deployment models and complex access controls to the public/private key pair that is implemented in a traditional blockchain, combined with managing hash chains, is not an easy problem to solve for an initial release, much less a deployment model that must be managed over several lifetimes.

Overview by Tim Sloane, VP Payments Innovation at Mercator Advisory Group

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