by Alex Ortiz
Blockchain has achieved industry status, but it’s still a young one filled with both questions and possibility. Consensus 2018 confirmed that the airplane is still very much being built in flight and that there’s a range of perspectives on how to build it and what exactly to build into it. My main takeaways from attending the conference were that self-sovereign identity is a hot topic, enterprises are biting, hope is in the air, and the future is open-source.
Awareness of Self-Sovereign Identity is Increasing Globally
Self-sovereign identity is a term that means individuals own and control their digital relationships and the data they provide to online businesses. In most of the conversations we had with startups, enterprises, investors, and others at Consensus, we did not have to explain the term, which pleasantly surprised us. Awareness of the benefits of doing digital identity in a self-sovereign way appears to be spreading throughout the world.
In attendance at Consensus were multiple companies supporting or creating self-sovereign and other identity technologies, including the lifeID team, Microsoft, Sovrin, Blockstack, uPort, and Civic. Four of them collaborated on a project that was led and demoed by Microsoft during the conference, in which a user named Alice requested a verified college degree credential from her alma mater (Brigham Young University, or BYU):
- Alice has a Blockstack self-sovereign identity and BYU uses a Sovrin self-sovereign identity
- Alice visits the BYU website and requests a digital copy of a credential that proves she graduated with a particular college degree in a particular year
- The college credential is cryptographically signed by the university and transferred securely from its servers to Alice’s phone app using a uPort JSON Web Token (JWT) library
- Alice now has the credential in her on-device “credential app”
- Now, should an online service or employer request this verified credential, Alice can send it from her self-sovereign identity app to the requester instantly, instead of passing along a ton of private information or having to request academic transcripts from the university’s registrar’s office, which is time-consuming and expensive
In the future, it will be possible to apply this concept to many other attributes, from proof-of-age and proof-of-income to proof-of-address and proof-of-KYC. The usefulness of these self-sovereign identity credentials and the apps that enable them was immediately obvious to many of the people we spoke to, from investors and startup founders to government lawyers and bankers. To us, this marked a step forward in the transition to self-sovereign identity in society.
There’s Strong Early Support for Blockchain by Some Enterprises and Governments
Major institutions have begun embracing a variety of blockchains as part of their solution stacks and consulting services for customers. Accenture, SAP, Deloitte, IBM, and Microsoft all had exhibit booths at the conference to promote their blockchain products and services. In a sign of early differentiation, those services weren’t all the same. For example, a few, like SAP, IBM, and Microsoft, offer cloud-based blockchain-as-a-service, while others like Accenture and Deloitte offer primarily consulting services and private key management.
This market differentiation creates an opportunity for blockchain protocol companies and dApp developers to identify particular enterprises to partner with, based on overlapping interests. Deloitte, during a speech on the main stage, shared that
- 52% of companies with blockchain projects are using a permissioned blockchain
- 44% are using an internal / private blockchain
- 44% are using a public blockchain (e.g., Bitcoin, Ethereum), and
- 35% are using a consortium blockchain
A team building a Lightning Network dApp and interested in integrating with merchants could focus partnership outreach on just the slice of companies building on Bitcoin, for example.
Another example of strategic differentiation that presents opportunities for ledger-specific programmers is Amazon AWS’s new partnership with the ConsenSys Kaleido project (a blockchain-as-a-service for businesses). Amazon supports public Ethereum deployments via AWS Ethereum Templates, whereas Microsoft doesn’t, as it only supports permissioned blockchain deployments. With Kaleido, there may be an uptick in public Ethereum projects in the enterprise.
Noteworthy Projects
The State of Illinois, which by way of Cook County recently piloted digitizing land title transfers on the Bitcoin blockchain, is moving forward with other plans as part of the Illinois Blockchain Initiative:
- verifying academic credentials from the University of Illinois using self-sovereign identities for students
- registering healthcare provider data like medical licensing information onto a ledger
- creating its own blockchain-based energy credit market
- issuing newborns a digital self-sovereign identity and placing a digital copy of their birth certificates on a ledger
On the enterprise side, FedEx, during a keynote panel with its CEO Fred Smith and CIO Robert Carter, was very bullish on the use of blockchain to improve its business. They mentioned that for every 10 million parcels shipped, roughly 100 million transactions take place within the walls of the company. However, it’s the external-facing work, the “palletized, containerized freight part of their business”, where it makes particularly good sense to use blockchains, given the volume of multi-party transactions involved. FedEx recently joined as a founding member of the Blockchain in Trucking Alliance and has some forthcoming announcements on its blockchain pilots. Enterprise-facing blockchain companies should take note.
Many Technologies will Soon Converge to Address Blockchain Implementation Challenges
My favorite panel at Consensus, titled “On-Device Key Management”, highlighted the hope and coming convergence of several technologies that will enable devices and machines, not just people, to interact with blockchains. Allison Clift-Jennings, one of the panelists and the CEO of IoT startup Filament, spoke about the need for dedicated ASICS (application-specific integrated circuits) for securing the private keys of devices and machines and offer “on-device, blockchain native security”.
Today, devices can’t manage their own keys or cryptographically sign transactions on behalf of their owners. However, once our phones and other IoT devices have dedicated ASIC microchips for key management, private key security, and “fast cryptography escalation”, then new use cases will emerge, for example, having devices make purchases for us using our digital wallets, or having machines purchase their own electricity from a smart grid.
Meanwhile, several companies, such as Ledger (also on the panel) are working to make digital and hardware wallets more user-friendly without compromising security. Biometric authentication using fingerprint, facial, and voice recognition continues to improve, and research into new consensus algorithms and new cryptographic methods like zero-knowledge proofs and homomorphic encryption continue to advance. The implication is that, in the next few years, several forces will converge and be ready for use just as we experience a surge in blockchain implementations, IoT devices, machine-to-machine communication and payments, privacy-preserving regulations, and shifting consumer expectations.
Open-Source is the Wave of the Future
My final insight from Consensus is that the future belongs to open-source, and many companies seemed to agree. One of the largest booths at the conference, by blockchain-based company Streamr, filled an entire room. Streamr has built an open-source marketplace for realtime data, and it invited several of its partners, including OSIsoft (creator of the Pi mechanical controls system) and electronics giant Nokia to booth with them. The company’s code was made available as open-source on GitHub.
Another example of the coming open-source world was contained in the above example of self-sovereign identity with Microsoft, Sovrin, Blockstack, and uPort, all of which have contributed open-source code that made the collaboration possible:
- the Decentralized Identity Foundation (of which Microsoft is a partner and founding member) has contributed to the Universal DID Resolver used to locate self-sovereign identifiers on their host blockchain as well as the identifers’ associated DID Documents, making it possible, e.g., for Alice’s Blockstack identifier and the university’s Sovrin identifier to be found in their respective locations
- the W3C (a standards body Sovrin has been heavily involved with), contributed the technical specifications for the identifiers themselves, as well as the data models for verified credentials, enabling a format for the college degree credential issued by the university in the demo
- Blockstack, the identity provider for Alice in the demo, has a Blockstack JavaScript library for identity, authentication, and storage
- Finally, as mentioned above, uPort has its JSON Web Token (JWT) library, which enabled the secure transfer, from the university servers to Alice’s phone, of her academic credentials
Each of the collaborators above have made contributed open-source code on GitHub, and the demonstration of blockchain-based identity in action was made possible precisely because all those organizations are sharing. We will also be sharing our open-source code (and vision!) with the world in the months and years ahead, and we couldn’t be more excited that open-source is and will continue to be a central motif in blockchain.
That’s it for our Consensus 2018 Wrap-up! See you all at next year’s event!
