Hyperledger: What is it, what’s it good for, and wasn’t it in Spaceballs?
In Spaceballs, Darth Vader parody Dark Helmet has his Luke Skywalker parody Lone Starr right where he wants him when Lone Starr tells his co-pilot Barf to “switch to secret hyper-jets” and to go into “hyper-active.”
There are many different blockchains out there. There is the Bitcoin blockchain. There is the Ethereum blockchain. And there is also the Hyperledger blockchain among many others. Is the Hyperledger blockchain as fast as ludicrous speed? Are the rest just a bunch of Cuisinarts?
This post is dedicated to discussing the Hyperledger blockchain, the blockchain that the edX “Blockchain for Business: An Introduction to Hyperledger Technologies” course focuses on.
How did the Hyperledger come about?
The Hyperledger Project is a product of The Linux Foundation. The Linux Foundation is “the organization of choice for building sustainable open source ecosystems” according to their website. What that means is that the Hyperledger Project is not the product of a private company such as IBM or Oracle, but rather the product of a community. The benefit of this approach is that a community should come up with rules and standards that are beneficial not to one organization, but to a much broader community. In this case, the Hyperledger Project community includes developers and leaders from such organizations as American Express, Cisco, Daimler, Digital Asset, Fujitsu, Hitachi, IBM, Intel, JP Morgan, and SAP. Here is a full list of the organizations involved in the Hyperledger Project.
What is the goal of the Hyperledger Project?
The goal of the Hyperledger Project is to create a blockchain specifically for the enterprise community. If the Bitcoin blockchain is for individuals who want to make transactions without a middle man like a bank, then the Hyperledger blockchain is for companies that want to make transactions or execute smart contracts without intermediaries.
More specifically, the goals of the Hyperledger Project are:
What is not the goal of the Hyperledger Project?
The Hyperledger Project is not affiliated with any cryptocurrency and does not transact any cryptocurrencies. The project highlights the other ways that the blockchain can be useful aside from the world of cryptocurrencies.
What are the pros and cons, the strengths and weaknesses of the Hyperledger blockchain thus far?
Jon Reed’s recent article debates this issue rather well and includes key feedback and updates from the executive director of the Hyperledger Project, Brian Behlendorf. Here are some of the key takeaways from Reed’s piece:
1) Some believe there to be “barriers to wide-scale blockchain adoption, including regulatory hurdles, established customer behaviors, IT assets and skills development”;
2) Behlendorf notes a “misperception about how you [need to be a big company to get involved], when half the members of Hyperledger are startups. 40 percent of them are headquartered in the Asia Pacific region. It’s really a global effort”;
3) Behlendorf also says that, “Even the developers working on the different projects come from a mix of companies like IBM and Huawei and other large companies, down to individuals working for startups or students”;
4) As for hurdles to Hyperledger’s success, Behlendorf said that, “It turns out running systems at scale is more than just having the code, there is a real skill to it. And blockchain specifically will have different scaling characteristics than your average big data lake or your average large website. So there will be some expertise required behind that.”
Reed is keen to note the frothy optimism that surrounds the blockchain and wisely shares the reason why Behlendorf, a former venture capitalist (VC) himself got involved in the Hyperledger Project:
“As a VC you’re supposed to be skeptical, by nature. I was pretty skeptical until somebody mentioned to me the use case of land titles and emerging markets. For me that was finally an example where I could make a very reasonable financial argument for why you didn’t want anybody to own, or be at the center of that database. You wanted a truly decentralized, distributed ledger.”
Reed then goes a step further and addresses the frothiest of frothy optimism around the blockchain, cryptocurrencies. Specifically, Reed writes that “Behlendorf was drawn to Hyperledger because he doesn’t believe blockchain uses should all be tied to currency.”
Lastly, Reed reports that Behlendorf also joined the Hyperledger Project because of its association and support from The Linux Foundation which gives it credibility and a community.
As you can tell from reading, some of Hyperledger’s issues are also blockchain’s issues which are also the same issues that new technologies and products have; these issues include natural skepticism about something new that is not readily understood, a fear or reluctance to change or try something new, issues with having to integrate something new into something old and familiar, a lack of workers who understand how the new technology works, and a number of unknown unknowns that will come to light over time.
At the same time, some of the pros and strengths of the Hyperledger blockchain come in the form of its greater promise which has only started to be fulfilled. This promise includes lower transaction costs between businesses and more trust between business entities which should, in theory, lead to more business and more safe business with less bad actors, need for attorneys, or loss of revenue due to one party hosing the other. Yes, hosing is a technical business term.
Who is currently using Hyperledger? How are they using it? And to what success?
The company that has arguably done the most with the Hyperledger Project is IBM. Out of it, IBM has created the IBM Blockchain Platform which has had a few notable use cases thus far. One is with Walmart’s supply chains which mentions a pilot program, but no results as of yet. Another is with private equity at Northern Trust which does not share data from the results of the problem that they solved for their client. A third is trusted identity with SecureKey which alludes to “$50-$70M” in efficiency savings at unnamed telecommunications companies and hundreds of millions of savings at financial institutions, again without citing hard data.
Again, it’s early days and hopefully there will be more data about the blockchain’s ability to provide greater efficiency through lower transaction costs sooner than later.
What support does Hyperledger have? What kind of community does it have?
Reed reports that there are 20,000+ people in Hyperledger meetup communities across 60+ cities and that the edX MOOC founded by Harvard and MIT on the Hyperledger had 16,000 pre-registrations. Question is, how many of those 16,000 people passed the course? And, more importantly, how many Hyperledger jobs are there out there? A quick search of blockchain engineers on Indeed.com found this:
Friends often say to me, “You believe in the blockchain, enough to spend time taking a course on it and writing a blog about it, so, what is it’s future?” That remains a good question. One day it may help us transact business at ludicrous speed, but till then a Cuisinart is still faster than doing something by hand.
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