Leaders Series: Varsha Bhatia at PeerNova

Issue 52 — May 31, 2018

Varsha Bhatia is a Product Manager at PeerNova

Varsha has extensive experience in software product management, and has spent 14 years focused on building enterprise products. She recently made the jump over to the blockchain ecosystem.

How did you get into the blockchain industry?

In 2015, I was working for a pretty large software organization, as a product manager for middleware technologies, and had been there for 14 years. I had started to feel like a dinosaur and I was aching to do something interesting and possibly in a new domain. Around the same time, a recruiter from PeerNova reached out to me about a position in product management. That really was my first exposure to the concept of a blockchain. Since then, it has been more or less a roller-coaster ride, working with our financial customers to find how some of their core problems that can be solved using relevant aspects of the blockchain model.

What did you do before you got into this?

Before this I was a product manager at a huge software firm overseeing UI platform tools for Business Process Management (BPM), and working on the PaaS strategy for the product (so, basically, not blockchain-related at all!).

What problem is your company, PeerNova, solving and why do you feel passionate about this?

PeerNova uses the blockchain transaction lineage model to build event lineages to solve some core problems in the financial industry around workflow automation and exception management processing, reconciliation, audit and compliance and cybersecurity. To build the platform, PeerNova did not start off with the assumption that the distributed ledger technology that was originally invented for bitcoins is applicable for this market. We understood that there are a lot of the aspects of the technology that are very interesting but you have to take the aspects that are relevant for the problem that you are trying to solve. That’s why, we have taken the aspects of the technology that are relevant. The phrase we use is we are “blockchain-inspired”. So we take ideas from blockchains, and distributed ledgers, combine it with traditional platforms that are in use today for big data and cloud platform technologies, and build our entire stack on top of that.

Why am I passionate about this? Think about all the use cases that takes any financial asset, be it a trade or an order, that needs to be traced back through all the transformations, and enrichments across all the systems, all the way to the origin when the asset was first created. This lineage of events, proved via a non-repudiation mechanism, can be used to attest to the current state of this asset. In particular, I am passionate about being part of an organization that has relentless focus on finding core use cases in the financial world that are relevant for this event lineage model.

What are some ideas you’re excited about in the blockchain space and why do you think these ideas are transformative?

If you think of a blockchain and a bitcoin transaction, bitcoin is not a typical token. You are actually holding an unspent output where your current transaction is linked to the prior transaction and that one to the one before that. What you are holding as a bitcoin has a lineage or a relationship holding a lineage of all the events that come from the original genesis when Satoshi Nakamoto spent the first bitcoin. At PeerNova, we have used that same model to create what we call as an event lineage. What is exciting is how this model can be used.

Financial institutions have a front, middle and back office. Each of these is not a single application, but hundreds of applications. Each of these applications have their own databases, possibly in different schemas, and messages weave in and out between these applications in a very complex way, interacting with internal and external systems. They go through enrichment, aggregation, netting of data — some of many types of transformations. In an event lineage, what we are saying is that any consolidated book entry that you make in a financial institution is going to be a cryptographic link of events all the way to the front office which is where the trade first came in for example. What this allows a financial institution to do is for the operations guys to understand what exactly is happening to a given trade in my system and answer questions like “Where is my trade?” Incidentally, a lot of time and effort (30–40%) is spent in being able to answer questions such as these. And from a regulatory standpoint allowing regulatory bodies to trace back to the series of events that led to this consolidated book entry.

The idea of making these seemingly mundane but resource-intensive and costly processes more efficient is going to be transformative.

What are you skeptical of?

There are a couple of things I am skeptical about. I am skeptical of many of the platforms that are touting themselves as solving all world problems using blockchain by bundling up all business logic using new cryptographic ways a.k.a smart contracts. However, large institutions have a huge technology legacy. Ripping and replacing existing business logic in smart contracts may not always be feasible. Secondly, many current solutions do not address large financial institutions enterprise requirements on scalability, performance and usability. These are some key requirements that need to be fulfilled before the solutions themselves are ready for primetime usage.

What’s been the most interesting experience you’ve had in the blockchain space thus far?

What’s been interesting to see has been how blockchain, like any major technology in the past, seems to be coming of age. When we first started talking about blockchain, our pitch was a lot about explaining the technology itself and its benefits. I think in some sense we were in a hype phase of the hype-facing the reality-take off cycle. Now, we seem to have come off of that hype phase and talking mostly of the problems and the use cases that the technology can be used for. Customers we speak to now are already very savvy about the technology itself. They are now more keen to understand how their real-world problems can be solved using the technology. It has been interesting to see this transition.

Any advice for people who are looking to get involved in the space?

To get started, in addition to the oodles of information on the web (reddit, CoinDesk, and many more), local meet-ups are a great idea. I would also say that almost all major conferences in finance, security, big data, or healthcare now do tracks that discuss how blockchain is affecting these areas. If you are active in these spaces, seek those out.

As you think about this industry, what do you think will happen in the short term that will blow people’s minds?

In the short term, the technology, if used correctly, can definitely be used to make existing processes more efficient. Every process and task, every change in events and agreements could be digitally stored and validated and shared via signatures. This in turn, can lead to huge cost savings for organizations. The assurances provided by underlying cryptographic techniques of immutability is an assumed and expected benefit with these types of technologies.

What do you think will be disappointing?

What will be disappointing in my opinion is the hype that has been generated by it. A lot of people share the enthusiasm of blockchain revolutionizing industries and changing economies. But I think there are many technical, governance and even social barriers that need to be overcome and that will take years of gradual adoption.

Long term, a world of many blockchains and coins, or one chain to rule them all?

Surely, a world of many blockchains! While there may be many use cases for public blockchains, most will be private. And each blockchain may have its own technical requirements and governance rules appropriate and suitable for the category of applications it is supporting. Each blockchain may support its own standards related to membership, access control and procedures for attaining verification and validation.