A Look Back at 2018: The Year of Enterprise Ethereum
A comprehensive roundup of Consensys’ Enterprise Ethereum product launches, use cases, and future implications.
“Proof of concept” is a phrase heard often when it comes to Enterprise Ethereum. It’s a stage. It means that a company is working to understand how blockchain can help them and in what way, and how it should be implemented from a technical perspective. Before 2018, many companies entered this stage and stopped there. Perhaps enterprise blockchain was in the “early adopters” phase, in a lifecycle similar to Geoffrey Moore’s technology adoption life cycle from “Crossing the Chasm.”
Were we straining to cross the chasm of enterprise adoption?
For Enterprise Ethereum, and for other new technologies and platforms, the path to mainstream adoption will perhaps follow the three steps: 1) ideation 2) conceptualization and 3) actual implementation. Up until this year, organizations worked to conceive practical use cases, or to actually find the time, resources and buy-in to commit. After all, blockchain is designed to coordinate multi-company processes, so getting buy-in across multiple parties takes time.
As we near the end of 2018, the story has changed, the ice has broken. Enterprise Ethereum usage has moved from proof of concept to the next phase. Functioning projects are being built, delivered and put into use. Let’s take a look back at this year in three sections, starting with the enterprise market, including the tools and products that launched this year, and then to the good stuff: the real-world use cases and success stories. We’ll close with a brief look at the latest in Enterprise Ethereum community and consortia standards.
1. Enterprise Blockchain/Ethereum Market:
Contrary to the turmoil occurring in the cryptomarkets, in many ways, 2018 was an important year for the steady development and growth of enterprise blockchain. Many top enterprises, including the 10 largest companies in the world, began exploring blockchain use cases in their industry. Market Watch estimates the global market size of enterprise blockchain at $entre4.6 billion in 2018 and will expand to $20.3 billion by 2025. The level of interest in enterprise blockchain is also growing. Coursera and ConsenSys launched a Blockchain Foundations course that quickly gained thousands of sign-ups, with a majority of the interest coming from the enterprise sector. Use cases from providing Syrian refugees with easy digital payments and verifiable identities to promoting financial inclusion across the rural islands of the Philippines are delivering real-world social impact using Enterprise Ethereum.
Enterprise-grade Product Launches
Product-wise, we might look back on 2018 as the year that momentum around Enterprise Ethereum products reached a level reflective of public Ethereum. Up until this year, JP Morgan’s Quorum has been the primary Ethereum client modified for enterprise needs, allowing permissioning controls regarding access to networks and more robust privacy settings. Quorum implementations fall under a public licensing which necessitates that any software created with it be made open source.
This year, more Ethereum clients have launched (including Mana, a client written in Elixir a coding language based on the Erlang’s Virtual Machine) to improve on Quorum and broaden the market. The most significant advancement is Pantheon from PegaSys, the Protocol and Engineering Group at ConsenSys, which we wrote about back in October.
Pantheon by PegaSys — Now Hyperledger Besu
Pantheon was written with the singular focus of getting enterprise Ethereum implementations to production. The Java client seeks to be an extension of Quorum and represents a major milestone in enterprise Ethereum for multiple reasons.
First, Pantheon has been released under a more enterprise-friendly license, Apache 2.0, which allows enterprises greater ownership over the software they develop. Secondly, Pantheon is a java client, a programming language that brings with it an estimated 10 million developers and a host of technical advantages for enterprise implementations of Ethereum, from it’s pluggable architecture and plethora of libraries to valuable monitoring and infrastructure tools.
But perhaps most interesting with far-reaching effects is that Pantheon allows users to run nodes within a private, enterprise network as well as nodes that can connect to the Ethereum mainnet. This ability to bridge to the mainnet has huge potential; in the words of the PegaSys team, it allows private networks to “seek compatibility with the powerful network effects Mainnet applications will be able to offer.” This also opens contribution to the protocol layer from a plethora of knowledgeable developers.
Kaleido
With over 1500+ consortia blockchain networks, 4000+ nodes and 150M blocks generated since launching in May, no other product in the Enterprise Ethereum ecosystem has seen the success of Kaleido or made real progress towards making enterprise blockchain easier to adopt.
Kaleido’s Blockchain Business Cloud, in collaboration with ConsenSys and AWS, is the leading SaaS platform for building, running and scaling complete enterprise blockchain solutions. It accelerates and simplifies the entire journey from blockchain exploration, proof of concepts and pilots to live production business networks. It’s the first and only platform that offers production-ready, consortium-level plans that cater to a spectrum of needs and roles among network participants. The platform enables users to create a private chain in a matter of minutes and a straightforward interface for onboarding and governing users, along with plug-and-play access to related services, cloud integrations, and 3rd party applications through the Kaleido Blockchain Marketplace.
Kaleido makes it both easy and free for users to get going with its Starter Plan. Just as Salesforce simplified and democratized access for CRMs, Kaleido is transforming enterprise blockchain with its easy-to-use SaaS and low cost of entry.
“The development of Kaleido could well become one of the more important blockchain stories of 2018 and beyond. It is quite possible that the enterprise use of Kaleido will one day be considered the equivalent of a seal of approval for a network’s blockchain technology.”
– Born2Invest writer, J. Frank Sigerson
We discuss notable enterprise success stories of 2018 below and most are running on Kaleido.
Amazon and EY Launches Blockchain Enterprise Solutions
Also of note is Amazon’s announcement of their AWS Managed Blockchain, which will offer support for Ethereum some time in 2019 and will have a console allowing users to deploy nodes, add and manage users, and support high-transacting, scalable applications.
And lastly, Ernst & Young made a groundbreaking announcement that it has developed an implementation of private transactions on the public Ethereum network using zero-knowledge proof technology, called EY Ops Chain Public Edition, potentially removing the need for totally private enterprise Ethereum networks. This could enable companies to interact and transact on the mainnet while keeping transaction data, terms, and participants private. Enterprises will also have the advantage of the security from the thousands of decentralized nodes that the mainnet provides compared to smaller private networks.
2. Enterprise Ethereum Use Cases:
Sector: Trade Financing
komgo
Problem: Commodities financing requires a tremendous amount of trust between transacting parties to hedge against all of the vulnerabilities the industry’s complexity allows. Imagine a container being transported from Hamburg, Germany to Long Beach, California, two of the largest ports in the world. That one container requires many verification points along the supply chain, meanwhile banks, financers, imports, exporters, and governments all experience financial risk resulting from any potential delays, errors, or miscommunication.
Solution: komgo is a global blockchain-based trade financing platform that can digitize letters of credit, which are traditionally paper documents that describe the financing options firms have on commodity trades.
Future Implications: The komgo platform will eventually provide digital verification of cargo shipments for specific letters of credit, which can provide transparency, reduce costs, and prevent fraud.
Sector: Banking and Finance
Santander
Problem: Banks struggle with compliance, payment settlements are often slow, and the threat of cybersecurity attacks is always prevalent.
Solution: Santander Bank developed a cash tokenization utility and real-time payment system for domestic and international payments on Ethereum. Payments were cleared, settled, and disbursed in 10–15 seconds.
Future Implications: Transactions of money and digital assets via a blockchain are approaching fast and will reduce friction for customers, prevent fraud, and provide greater transparency for financial systems.
Project i2i
Problem: Over 35 million Filipinos still do not have bank accounts because they are located in rural or hard to reach places.
Solution: In 2018, Project i2i — the network that aims to provide financial inclusion to unbanked Filipinos — has grown from 6 participating banks to 110 banks in the year 2018. The partnership between ConsenSys and UnionBank plans to have 480 rural banks and 2,600 branches in the region on board by early 2019.
Future Implications: The pilot, which leveraged Kaleido, proved that blockchain can be harnessed in order to reach farther into rural communities and include people who are otherwise financially excluded.
SMBX
Problem: Small and Medium businesses are vital for economies around the world. Capital while more available than ever is still restricted to those with a high net worth and elite network.
Solution: The Small & Medium Business Exchange (SMBX) offers a blockchain-based exchange for issuing, buying, and selling small business bonds to community investors. These bonds allow individuals to invest directly into small and medium-sized businesses in a fast and transparent manner.
Future Implications: Peer to peer and community investing has the potential to provide capital to SMB’s that would benefit from paying interest rates without the additional regulatory fees that burden typical bank loans. The potential for individuals and community members to invest in local businesses has the potential to spur economic growth and democratize financing.
Project Khokha
Problem: Banks struggle with compliance and payment settlements are often slow which increases friction and wastes capital.
Solution: Project Khoka. In a consortium with seven commercial banks, the South African Reserve Bank conducted a proof-of-concept trial with Quorum, an enterprise-grade implementation of Ethereum, to process the typical daily volume of payments with full confidentiality and finality in less than two hours.
Future Implications: Transactions of money and digital assets via a blockchain are approaching fast and will reduce friction for customers, prevent fraud, and provide greater transparency for financial systems.
Sector: Charity and Nonprofits
LUXARITY
Problem: Philanthropists and charity donors rarely have transparency on how their money is being spent or who is receiving it, sometimes resulting in the misuse of funds and in extreme cases embezzlement.
Solution: ConsenSys recently partnered with LUXARITY, the social initiative of the Lane Crawford Joyce Group (LCJG), Asia’s premier fashion retail and brand management group, to register re-sold luxury goods on the blockchain and allow consumers to donate the funds from their purchase and have 100% transparency and traceability of the impact of their contribution.
Future Implications: Tracking and monitoring charity donations can bring accountability to philanthropy and incentivize investment in transparent and efficient charitable organizations.
Sector: Healthcare
Caifeng Gene
Problem: Healthcare is easy…said nobody. Misinformation, data silos, and the lack of communication between patients, providers, hospitals, and doctors plague the healthcare world, regardless of which country you reside in. The need for coordinated and permissioned exchange of medical data is dire.
Solution: Shanghai-based health company Caifeng Gene is building a first-of-its-kind blockchain-based genomic data exchange to help address rising diabetes rates in China which already affects over 110 million patients and nearly 10 percent of the adult population in the country. Caifeng is establishing a consortium of hospitals, genome sequencing service providers, biotech labs, pharmaceutical companies, and clinics, who will use the blockchain to efficiently and securely collect and share medical data. This will enable hospitals and doctors to provide unique treatment and prevention plans while ensuring personal privacy.
Future Implications: Blockchain-based data sovereignty and permissioned exchange scenarios will lead to better, faster, and cost-effective medical discoveries. Simultaneously, advancements in medical data management will result in more competent patient care.
Sector: Supply Chain
Atato
Problem: Global supply chains are inefficient, poorly tracked, and oftentimes exploited by individuals. A nationwide study conducted in the US from 2010 to 2012 by the international ocean advocacy organization Oceana revealed that seafood is mislabeled up to 87% of the time.
Solution: Atato, a Bangkok-based blockchain service provider launched a traceability program for their client Pacifical, a tuna development company of the 9 PNA Pacific Island countries. Their program enables tracking several hundred million certified sustainable tuna products.
Future Implications: Accurately tracking food and beverages across a product life cycle is a major step towards enhancing supply chain efficiency, increasing sustainability, and prevent harmful impacts from mislabeled products or food outbreaks.
Sector: Media and Entertainment
Greenfence Consumer
Problem: Digital piracy and duplication of digital items plagues the entertainment industry, as frauds, knockoffs, and studio intellectual property are pirated frequently.
Solution: Greenfence Consumer teamed up with Hollywood film Studios Sony and Fox to distribute digital collectibles featuring beloved movie characters and intellectual property to the mass market. Fox released digital posters for Deadpool 2 and Sony allowed fans to collect digital trading cards for Goosebumps 2: Haunted Halloween, which are all unique and identifiable thanks to blockchain technology. As recently as last month, the Infinity Film Festival partnered with Greenfence Consumer to launch the world’s first “digital swag bag” throughout Hollywood and Beverly Hills.
Future Implications: Functional blockchains will reduce piracy of intellectual property, enable the distribution of authentic digital collectibles, and protect other digital content (songs, photos, videos, etc) from theft.
Sector: Social Impact
Radiant Earth Foundation
Problem: When disaster strikes, non-governmental organizations (NGOs) need access to the most up to date imagery available.
Solution: In a partnership with ConsenSys, the Radiant Earth Foundation created a proof-of-concept to better track the licensing and payments of geospatial data. Geospatial satellite data can provide critical insights for firefighters tackling wild blazes in California and aid in recovery and clean-up efforts led by FEMA after a hurricane. These data insights will save emergency resources and human lives.
Future Implications: Modern businesses and organizations gather more data than ever before, but the ability to disseminate information quickly, cost-effectively, and accurately is what truly brings value to the data that is collected.
Sector: Oil and Gas
Ondiflo
Problem: Petroleum is one of the most traded commodities, a behemoth of upstream, midstream, and downstream providers, refiners, tankers, jobbers, governments, and regulatory bodies — all suffering from siloed infrastructures and numerous inefficiencies.
Solution: Ondiflo is a joint venture between ConsenSys and Amalto, a B2B integration leader for the oil and gas industry, which aims to provide bespoke, enterprise-grade blockchain solutions to oil and gas companies. Since its launch in February 2018, Ondiflo has focused on creating a platform for all ticketing-based services to ease reconciliation around identity, certification, field capture errors, data sanitation, and financial settlement.
Future Implications: Blockchain technology will save tens of millions of dollars and potentially hundreds of millions by reducing inefficiencies and streamlining backend processes.
Sector: Mining and Minerals
Minerac
Problem: Documentation is vital to all types of industries, especially the mining industry, which still struggles with post-trade efficiency and logistical errors.
Solution: Minerac, a joint venture between ConsenSys and the metal concentrates trade platform Open Mineral, is an Ethereum-based consortium of mining companies and financial institutions which facilitates and secures the exchange of critical trade documents such as bills of lading and letters of credit across different jurisdictions.
Future Implications: Leveraging blockchain technology will provide digitization, immutable records, secure data collection, and the seamless exchange of information.
3. Standards & Consortia
Standards are vital to creating momentum in any open ecosystem as it promotes more interoperability and efficiency — the internet would’ve remained as a number of disparate intranets without the advent of the TCP/IP protocol. In 2018, a number of standards-setting bodies and consortia made strides in creating a set of shared frameworks. The Enterprise Ethereum Alliance, a standards setting body for Enterprise Ethereum, released the Enterprise Ethereum Client Specification to create a “single, open-source, cross-platform standards-based framework to speed up business transactions.” The W3C, which set standards for web browsers, is also working on creating the web ledger protocol. The International Organization for Standardization, ISO, is also working on a set of standards for blockchain and distributed ledgers, called ISO 307.
The future of blockchain will be one of open collaboration and shared value creation. Two major blockchain consortia, the EEA and Hyperledger Foundation, announced that they would be joining each other’s organizations to drive mainstream adoption of blockchain in enterprises.
Final Thoughts
The blockchain industry is less than a decade old yet it has experienced rapid change and technological development. If 2017 was the year of initial coin offerings, 2018 has been the year of Enterprise Ethereum. The ecosystem advanced quickly from proof of concepts to working pilots on permissioned blockchains utilizing private transactions with vast application purposes. Looking ahead to 2019, the blockchain industry will witness implementation across various industries resulting in increased operational and financial efficiency. Blockchain as a service will continue to develop and iterate until it becomes ubiquitous as a tool to enhance enterprise performance.
Disclaimer: The views expressed by the authors and contributors above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.
