The Case for a Transaction Fabric for the Internet
Blockchain doesn’t solve a technical problem…it solves a social problem.
If you are reading this, you know something about distributed ledger technology, DLT for short and often popularized as “blockchain”, and now you want to find a better, faster and more satisfying way to build real applications that transact via DLT channels on the world’s most advanced distributed ledger fabric, Hyperledger Fabric v1.0, available today in open source at Hyperledger.org and ready for production this month.
But why do we need this thing that 120 companies and 5000 people all over the world worked together over the past 18 months to build?
There are countless untapped opportunities to reduce inefficiency and increase commerce by building networked solutions that transfer assets and manage inter-party agreements. You might ask, why should there be so many untapped opportunities when the Internet has been making it easy to form networks for decades. The remaining friction that makes forming business networks costly and time consuming today isn’t technical — it’s social. Simply put, sovereign entities don’t like ceding power. Presented with the opportunity to join a business network that is controlled by another party, the leadership team of a company or government will take a long time deciding whether joining will give that other party too much power in their relationship or if they really trust them not to change the system without consent.
While the Internet helped decentralize control of the communications layer, until the advent of distributed ledger technology, someone had to be put in charge of physically running the centralized servers that formed the backbone of a business network. That gave someone root access to the machines, ability to change application code, and physical possession of most or all of the participants’ information. That might be ok when the information is a tweet or a public document, but it tends not to be ok when the information contains transaction records on trillions of dollars of assets or the automated rules by which those assets may be traded.
History is replete with examples of failed attempts to centralize such networks, in particular between powerful businesses and government entities. And even in successful cases, the level of effort, political power and time expended was considerable — not simply in forging consortia but in keeping them from falling apart.
The Hyperledger Fabric offers not simply a technological innovation, but a foundation for the cultural shift in approach to business networks that can truly disrupt and accelerate industry, because it allows all the members of the network to HAVE control while not requiring any one of them (or any other third party) to be IN control of the system through which they do business. Removing that issue alone can make it a lot easier to form and grow viral business networks for purposes that until now were simply too hard to get going…not technically but, frankly, politically. And this is a lot like how the Internet and the Web made what used to be hard — making distant servers and systems work together — easy enough to use for almost anything. And that changed the world. Twenty-five years later, it’s time to do that again by adding this new transaction fabric to the Internet.