Reflecting on my 2018 Tech Predictions….

February 17, 2019 Leave a comment

A year goes by so quickly. The one minute you’re at the beginning, wondering what the next 12 months will bring. Before you know it, you’re at a Christmas party. Ok…… perhaps it’s not that swift, but it sometimes feels like that. In the tech world, a year is a very long time. So much progress takes place in 12 months, and it’s only when you look back at a perspective written 12 months prior, do you realize how much the landscape has moved.

This is one of the reasons I wanted to reflect on the tech prediction that I made over 12 months ago. While the exercise may prove to be potentially embarrassing, the real value is that it will show how far we’ve come in certain areas, while perhaps indicating other areas where little progress has been made.

I’ve always written these predictions as a fun little exercise. In fact, more than 12 years ago, before A.I became a mainstream concern in the tech world, I was regularly speculating on my blog about the coming A.I revolution, the Singularity and the exciting “Local AI” that we would all have on our cellphones by 2020 (which I later renamed “Personal AI”).

2007_Prediction

An old post from 2007 talking about the Singularity

Now, in the late 2010s , we’re finally in the era of real AI , blockchain, quantum computing and, as you’ll see, a few other interesting things too. So without further ado ….

  1. Personal AI gets really personal 

Kicking off , I first wrote about Personal AI , which refers to machine learning and eventually something more advanced running on personal devices ( refer to my article here). The year 2018 was going to be the year of Personal AI. In fact, I stated – “For 2018, I predict that while use more cases for phones will be found, Machine Learning will move to other devices like smart watches, and even clothing”. Correct ? Well, not exactly as predicted.

Firstly, we saw in 2018 the rush to develop AI chips from a host of companies. Chip giant Intel made numerous announcements, including partnerships with Facebook for “AI chips”. The Neural Network processing capability then moved onto mobile phones, although currently the main application for this seems to be facial recognition to unlock your phone. Are smart assistants like Siri utilising these chips now, or are they still glorified voice activated search engines ? Unfortunately the best applications for the hardware wasn’t explored in 2018, and we even had Apple ask developers to come up with use cases for their hardware. Nonetheless, even if this didn’t happen with Personal Assistants in the way I imagined for 2018, the incremental steps forward are happening.

I also spoke of of this capability moving to watches and even clothing. We didn’t see too much of Smart Clothing in 2018, although I did find websites like this emerge :

https://www.wareable.com/smart-clothing/best-smart-clothing

It is still a bit early for this Smart Clothing trend to emerge into mainstream , and the drive will probably be healthcare and assistance initially, not really fashion.

But what really made me smile was the unveiling in mid 2018 of the Apple Watch 4. This one event confirmed everything that I had been saying about “Personal AI” over the last decade. In addition to monitoring your heart rate like step counters and smart watches have been doing for the last few years, this model debuted a world first – it was a personal device that measured both ECG readings and arterial fibrillation ( irregular heart rate ). These readings make the device a lot more useful in monitoring your health, and soon I feel that heart attack prediction will be added.

This step was another example of the development in sensor technology that we were hoping to see, and you may remember that I previously spoke of these developments as being key for Personal AI. Along with improved sensor technology, we will soon see neural network processing capability on smaller devices ( the hardware is already being included on some newer phones ). Witness the launch of the Intel Nervana chip. Now this is where everything will come together to deliver on the vision that I previously laid out. Currently, the device also can detect when someone falls , and use the Siri “Personal AI” to notify someone. My next prediction here is that in 2019 we will probably see a sensor developed to monitor glucose levels, and the AI will start using all this information together for incident prevention. We wait to see what other manufacturers bring to this space in terms of innovation.

VERDICT : Correct. While the development with Personal Assistants ( to deliver Personal AI utilising the hardware) was not yet what I envisage, what Apple did with the Watch 4.0 was exactly what I’ve been talking about for the last few years, and I’m happy to see that move forward.

2) Internet 2.0

Hmmmm……from AI to Blockchain, I’m a sucker for punishment. So…. When I wrote the 2018 predictions in late 2017, we were in the middle of the biggest cryptocurrency boom in history. Of course, we were all very bullish on use cases for blockchain. Now, after a year of a crash in prices of cryptocurrency, it is understandable the public sentiment to the blockchain technology is not as enthusiastic. But as I stated in my article “2018, Bitcoins best ever year”, a lot happened in the technical development of Blockchain technology in 2018 , which has nothing to do with the prices of cryptocurrency. When it comes to Enterprise blockchains ( consortium chains ), Microsoft’s Azure platform, for example, is seeing big traction with over 25 blockchain technologies being available to run in a cloud deployment across the world, and with transactional performance improvements over public chains. If you favour decentralisation for a public facing application though, the real news has been around what I will now call the “Ethereum War” , the fight for the first successful decentralised public blockchain for Dapps ( not consortiums ).

While a lot did happen in here , such as the emergence of real competitors to the Ethereum project like EOS , NEO are Cardano, my prediction of the winner emerging in 2018 didn’t really come true. Or did it ? We still are no nearer to a “killer Dapp” that best shows the raison d’être for the smart contract fuelled public blockchain. Right now, we see that gaming and gambling apps are the most common things running on platforms like Ethereum and EOS. However, dig a bit deeper and there is something there for now.

Firstly , we see that in spite of the competition, Ethereum still in the lead ( for now ). Not only are there more developers working on Ethereuem globally, we’ve even seen interest from consulting houses like EY , who announced the launch of EY Ops Chain Public Edition , the world’s first implementation of zero-knowledge proof (ZKP) technology on the publicEthereum blockchain. This would be to potentially create enterprise projects on the public ETH chain that for specific reasons won’t be deployed on Azure.

Also , it seems that Ethereum is the only ecosystem with both a public blockchain community and an enterprise blockchain community. Look at the work that Consensys is doing with Ethereum on Azure, for example.

Secondly, there are some interesting use cases apart from games and gambling – although still in the tech realm. Take a look at Gnosis and IDEX, I feel that Ethereum still has the largest amount of developer activity, hence its still in the lead. The other platforms do have technical advancements over it, most notably in the transaction speed. However, Ethereum favours decentralization over all else, and let’s be honest, if a pubic blockchain moves the wrong way on that to accommodate some technical benefit, then what is the point ? Having said that however, there is plenty of activity in the EOS space, and NEO and Cardano have significant backing in China and Japan respectively, so it’s too early to rule anything out.

ETH Apps

I’m attaching a screenshot of a tweet from early Feb 2019, there are many Dapps deployed to the various Gen 2 Blockchains ( mostly ETH which is in the lead ), but most of them have no users !!

Given the importance of decentralization, this has to change soon.

VERDICT : Miss. It was too early in 2018 for this to become a reality. While people are still struggling with the killer use case, some progress has been made on the technical scaling capability, but its not there yet by any means. We await what 2019 will bring.

3) Bots will be everywhere

This was an easy prediction that didn’t take rocket science. In the consumer facing world, we’ve seen more and more bots being deployed to the extent that it isn’t something out of the ordinary anymore. This is happening, and the technology will simply improve and become more usable, easy to deploy and transparent.

Now, there have been some bold predictions that state that bots will replace apps entirely. The view is that everything that you do in an application will eventually have a bot at the front end, facilitating (hopefully) a more natural interaction with the back end. I’ll never forget when Power BI revealed the Q&A feature ( you type in an English question and it shows the data that you’re looking for) , people went nuts for it. The Power BI mobile app now has a bot that you speak to, and thats a level of interaction in the BI space thought impossible just a few years back. If this continues , many consumer and even enterprise applications may well have a “bot layer” as standard as part of the N-tier design, and it could become that pervasive. Just be careful though – if I used to be able to do something by clicking a button , and I now need to type in a command ( or do a spoken command ) ,then where is the progress ? Interaction needs to be natural and comfortable. Perhaps this will simply become an alternative interaction method, like it is in Power BI.

Bots

Eventually though, if “Personal AI” becomes really advanced and commonplace, it will make the above eventually redundant as well. You wont need an app OR bots , you just talk to your Personal AI , and it will do everything for you ( communicating to third parties via THEIR APIs or bots , ordering goods and services for you , or retrieving information ). In the 2010s people were scrambling to control the mobile phone platform , in the 2020s you want to be the leading Personal AI platform ( and the hardware won’t matter ).

Back to the present, and the rise of bot deployments, a problem will increasingly arise where you’re not aware that bots are being deployed, or where machine learning bots are silently deployed to gain an unfair advantage. There is a whole phenomenon called “Bad Bots”. Bad bots interact with applications in the same way a legitimate user would, making them harder to detect. They perform a range of activities including web scraping, competitive data mining, personal and financial data harvesting, account takeover, digital ad fraud, spam, transaction fraud, etc. I even stumbled across a Bad Bot report that comes out yearly , which tracks this behaviour.

Bots are also being deployed in the corporate space increasingly, and there are many use cases for internal facing bots ( for example, an HR bot ). The corporate implementation of this automation as a whole though also includes the RPA space at the moment, and I feel that this will keep growing. In enterprises, you will have bots interacting with employees, and even smarter ones controlling processes for the organization. In fact …. See point 4.

VERDICT : Correct. Bots are everywhere and are growing. We will see good things and maybe some bad things come from this initially.

4) Machine Ecosystems

The Bot trend described above will play a role in a larger technological development. It will grow over the next few years until we see full machine to machine ecosystems develop. The classical definition of a Machine Economy is an economy where smart, autonomous, networked and economically independent machines act as the participants, carrying on the necessary activities with little to no human intervention. Imagine an advanced form of “RPA+” automating an entire supply chain or value chain ? Oh, if you’re a supply chain or operations guy, you’re getting giddy at the thought……. Well, we will see it, but there are more pieces to this than an internal RPA implementation. This will call upon IOT devices utilising both communications with non-familiar IOT devices, and also machine learning, in order to make this a reality. Therefore the machine ecosystem will not be limited strictly to enterprise deployments. A classic example of this commonly used is the connected vehicle scenario, where cars pass information to each other , to perhaps enhance safety. There are Mercedes models in production today that already do this. My own daily driver has a built in SIM card of its own, and I receive real time traffic and incident alerts, and this will increasingly become vehicle to vehicle.

While 2018 was too early for a lot of this to become reality , the building blocks are falling into place. But another prediction that I will make, is that due to implementation of this technology in certain scenarios where unfair advantage will be gained, or rules could be broken, we may see some form of regulation emerge soon.

VERDICT : Incorrect. It is simply too early, however this space is very exciting and this phenomenon is a given for the 2020s.

4) VR fails again

Again, this was fairly easy for me, but I won’t say that I got it 100% correct. Yes, we still have not seen VR take off ( and we’re only waiting for a few decades ). There was no killer app in 2018 , and VR was actually hardly in the news. So VR failed in 2018. However, to be really fair, there was some behind the scenes traction here.

Atari-Jaguar-VR-2

Anyone remember the Atari Jaguar Headset ? Sam Tramiel promised us that this thing would ship in 1995…….as a kid I believed him.

Firstly, AR ( Augmented Reality ) continues to go from strength to strength, especially with Enterprise use cases. Microsoft’s own HoloLens technology is a good example of this.

When it comes to VR however, I tried a few more games, and it seems like the experience is getting better. I was pleasantly surprised that, for the first time, the VR headset and some games felt like something that I actually want, not just a tech demo. The experience wasn’t perfect for me, I still felt uncomfortable after a short period if usage, and I really think that the display technology needs to improve even further. This may be something that currently only affects certain people though, and it was still a lot better than years past.

sam tramiel

“The Jaguar is more powerful than the Saturn”…..sure….

While there was no killer app in 2018, perhaps we’ll see one in 2019, there’s certainly a lot of development in the pipeline. Here’s a thought for you to ponder though, what if VR NEVER becomes mainstream and we go straight to holographic technology instead ? Now I know that a holographic display is not immersive like a VR headset, but perhaps we could use “blasting” technology and project in 360 degrees into the room around you for that immersive experience. Of course, special rooms ( Holodecks ) could be purpose built to provide an even better experience……

While there was no killer app in 2018, perhaps we’ll see one in 2019, there’s certainly a lot of development in the pipeline. Here’s a thought for you to ponder though, what if VR NEVER becomes mainstream and we go straight to holographic technology instead ? Now I know that a holographic display is not immersive like a VR headset, but perhaps we could use “blasting” technology and project in 360 degrees into the room around you for that immersive experience. Of course, special rooms ( Holodecks ) could be purpose built to provide an even better experience……

VERDICT : Got this one right, but 2019 will be a more promising year for VR.

5) Altcoin wars in full swing 

I’ve addressed most if this under section 2, as the “Internet 2.0” decentralised blockchain battle was the most prominent. I will add though that similar developments are happening in the other 2 areas that I originally mentioned. When it comes to payment platforms, we have the Ripple vs Stellar battle.

218478-x-men-vs-street-fighter-playstation-screenshot-versus-screen

Any CAPCOM fans here ? Nobody does a VS Battle screen like CAPCOM

We kept hearing throughout 2018 of all the great partnerships that Ripple were undertaking. This platform seems to be loved by the banking industry, but disliked by the traditional Bitcoin crowd, as the XRP token does not follow the same patterns as the other cryptocurrencies. However, late in 2018 Stellar also started making news.

Both XRP and Stellar Lumens XLM are aimed at the trillion dollar payments industry and are designed to facilitate global cross-border payments that bridge crypto and fiat currencies. Theoretically, both will be fast, affordable and reliable. I didn’t predict a winner in this war , but I did say that the battle will heat up, and it did.

Jed McCaleb, the Stellar technology chief, actually came from Ripple. And while for most of 2018 it seemed like Ripple was getting all the limelight, I wouldn’t rule out Stellar at all, especially when you look at the backing thats its got. Some reports in 2018 stated that Stellar had a higher trading volume, so while Ripple tokens had a higher value, Stellar tokens were being used more often. But if I had to call it I’d say that Ripple was still in the lead here.

In terms of the privacy coins, here is what we saw. The battle for privacy wasn’t as intense ( or perhaps not as visible in the media ), as the above payments war. Why are privacy coins important ? What potential value do they have ?

Well , if you think about it , coins like Bitcoin and Litecoin have a publicly accessible blockchain. You could trace the history of transactions all the way back to the time your coins were mined even. In the future, as this process improves, an exchange could blacklist your crypto because the transaction history shows at one time or another, it was involved in nefarious activity.

For the last few years, Monero has probably been the leading privacy coin , due to high levels of usage, however that usage is normally for illegal activities !! In fact, we’ve seen instances of people being kidnapped, or computers being hacked, and the ransom demands being in Monero ( due to it being untraceable and fungible ). So is it winning the privacy battle?

Well, again, as per my prediction, the battle DID heat up in 2018. The Zcash platform, with its famous zk-Snarks, saw its major “Sapling” upgrade completed in 2018. And don’t forget about Dash, another crypto-currency that offers privacy options. In fact, the interesting thing about Dash is that the usage has taken off in Venezuela, with one fast food outlet making a big announcement about accepting the currency at all locations in 2018. As I mentioned in my article Bitcoin, while the price of crypto currencies fell in 2018, there was plenty of other developments behind the scenes, and the usage of them in countries with economic troubles shows that they are here to stay.

VERDICT : Correct. All 3 blockchain wars heated up on 2018, even as the prices of crypto plunged. But it’s still early.

6) One of the big retailers announces support for crypto in 2018 

Still on the crypto theme , and only because it really is one of the biggest tech developments of this era that we’re in, lets now talk about adoption. So, I predicted that one of the big retailers (perhaps a big online one, wink wink) will announce that it is accepting cryptocurrency in 2018. Aaaand it didn’t happen….

….but I did get a nudge in the right direction for my troubles. The big, and I mean really big if you’re a Bitcoin fab, was the announcement of Bakkt in 2018. I covered the details of this in my article [2018 – Bitcoins best ever year], but basically a consortium, including Microsoft and Starbucks, created a platform called Bakkt, to facilitate the trading and usage of Bitcoin. How this integrates with the lightning channels remains to be seen, but it’s exciting nonetheless and if I had to go out on a limb, I’d say that for many Bitcoin fans the progress on Bakkt is the number one story for them in the Bitcoin world.

VERDICT : Miss, but with some serious upside.

So there we go, it was fun making these predictions, and even more fun re-visiting them. Drop us a line, I’d love to hear your feedback. Next – watch out for my article “My tech predictions for 2019”, which I promise to actually get out IN 2019……


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SUSE on Azure !!

January 29, 2019 Leave a comment

I talk to the SUSE guys who had a stand at Ignite 2019. Why run SAP, Cloudera and SQL Server 2017 specifically on SUSE on Azure ? Is there anything that makes SUSE on Azure faster than other clouds ?

MS Ignite 2019

January 28, 2019 Leave a comment

I chat to people on the floor of Ignite 2019 in Johannesburg.

Categories: Azure, Uncategorized

2018 – Bitcoins best ever year

December 18, 2018 3 comments

Yes, 2018, the 10th anniversary of Bitcoin, was the best ever year for the original cryptocurrency. 

Your eyes do not deceive you, that is what I wrote. Confused ? 

The History 

Bitcoin

Bitcoin recently turned 10 yearns old, on October 31 2018.  The digital currently that everyone has heard of but very few actually use has survived to this milestone , with many ups and down along the way. Generally, this was a good milestone. While many had predicted that Bitcoin was a fad over the years, the milestone itself showed that it was here to stay. Equally as important, Bitcoin had survived 10 years without being hacked or destroyed technically – the premise of the original blockchain was intact after a decade. 

All except for one little problem….

You still generally can’t use your Bitcoin as a currency. 

This debate normally evokes many heated discussions. Firstly , many will point out that, even at 10 years old, the crypto currency space is still in its infancy , and mass adoption is around the corner. 

Some will claim that the main purpose of Bitcoin is now a Store of Value , a purpose which more and more people are embracing especially those living in countries with economic uncertainty. The value of Bitcoin, we’re told, will only keep rising and rising from here, and why would you want to spend something that will be worth significantly more in the coming months or years ? 

There is then the argument that Bitcoin was simply the pioneer, the first mover the defined that space , but destined to be just that, and in actual fact one of the supposed “alt -coins” will actually rise up to become the first world currency, and this event is also imminent. 

Lastly , there are the technical considerations, one being that Bitcoin on its own has a slow transaction speed when compared to Mastercard or VISA. This will not be sufficient for a global currency, let alone a digital one. 

So where does the above leave us ? 

Addressing the main issues 

If you analyse the above, it seems like the biggest blockers to Bitcoin being a successful currency are the concerns around scalability and general usability. Nothing concerns the actual price of Bitcoin , unless you then want to talk about Bitcoin as a store of value , which I’ll cover later. 

So, if we could make progress in the ease of use of Bitcoin , the transaction speed, and just the overall availability and experience, we would be making further progress towards Bitcoin being a huge success as an alternative currency ? 

Well, that is exactly what is happened in 2018.

Due to the highly secure nature of the original Bitcoin blockchain, the number of transactions per second that could be performed was not very high. For the last few years, many bright minds have been forwarding theories on how to improve this situation. The first of these was Segwit. 

Segwit

Segwit stands for “Segregated Witness”. To explain the concept simply – the maximum “block” size in the Bitcoin blockchain is 1MB, and it is argued that this should not be increased for security reasons. This, however, does limit the number of transactions on the network to about 7 per second. Segwit was proposed by developer Pieter Wiulle in 2015 to fix a bug, and it removed the signature of the transaction ( the “witness” ) to outside the block. This had a bonus affect of making the transaction size smaller, which meant that more transactions could fit into a block, meaning more transactions per second. The term SegWit hence stands for “Segregated Witness”, ie. the transaction signature or witness being segregated to outside the block. 

Now this was done in a way to maintain compatibility, but the wallets had to be upgraded to SegWit to enable Segwit transactions. In early 2018, the number of SegWit transactions on the Bitcoin network was in the low single digits, but at the time of writing in late 2018, roughly 50% of transactions on the Bitcoin MainNet were SegWit transactions. 

Pic 1 Segwit

Figure 1 : Segwit usage has increased significantly in 2018

Thus 2018 was an important year for the successful rollout of SegWit. 

The Lightning Network 

This is the big one for both transaction speed scaling and general accessibility of Bitcoin. The original Bitcoin blockchain implemented security due to the cryptographic fingerprint of each block , and the consensus protocol used, the process by which nodes agree on the validity of each block. The problem is that doing all this work takes, well……work ! This process was never the fastest and the theoretical transaction rate for the Bitcoin blockchain was between 3-7 transactions per second. 

While this was acceptable in the early test days of Bitcoin, this will never work for a platform that wants to become a global currency. Compare this with the VISA network , which averages around 1667 transactions per second , and could go higher theoretically. 

One of the proposals which rapidly gained favour was an “off-chain” scaling solution, enabled by the above-mentioned SegWit upgrade. 

What the above-mentioned SegWit enabled was the ability to implement off-chain scaling, ie. improve the overall transaction speed of the network by running smaller transactions off the network and then doing a commit to the network at intervals. An individual making a purchase with Bitcoin would pay an amount to a node, and the speed of these transactions could be very high. Only at certain intervals, when the node wants to reconcile, or be closed entirely, will an actual transaction be completed on the main Bitcoin blockchain. 

The implementation of these nodes is called the Lightning Network. Many startup companies were formed and started deploying Lightning Nodes in early 2018. While there were only a few nodes in January , this has now grown at an exponential rate. Now actual Bitcoins will have to be transferred on the main blockchain to these nodes , for parties to transact with, and at the time of writing an estimated 500 BTC have been moved into Lightning Nodes. The growth in the network capacity from the start of 2018 to now, as illustrated below, is very encouraging.

Pic 2 Lightning

Figure 2 : Explosive growth in the Lightning Network

In a year where the actual price value of Bitcoin has dropped followed by the “Doom and Gloom” headlines, the growth in these nodes is the real story, and if anything, a very encouraging sign that a massive ecosystem is thriving around Bitcoin.

Thus 2018 was an important year for the successful rollout of the Lightning Network.

Improving Accessibility 

Apart from transaction speed, the other concern around Bitcoins success as a currency was around accessibility. Wallets were perceived by some as difficult to use, and certainly not friendly to the man in the street. To obtain Bitcoin you had to sign up at one of the  exchanges – could they be trusted ? It really seems, even today, that Bitcoin is the domain of the computer nerd or the day trader. 

One of the possibilities opened up by these lightning channels is that vendors who want to transact in Bitcoin could now build offerings around the Lightning Network , with many merchants busy developing solutions around it. A report in September 2018 stated that over 4000 merchants had gained access to Lightning channels to facilitate payment. If this keeps going, it will have a massive impact on the general availability and feasibility of Bitcoin as a global currency. 

What we’re now also seeing are some of the bigger companies get serious about this space. One example was the following leaked report , speculating that tech giant Samsung may be investigating integrating a hardware (cold) wallet into future smartphones. This would be a massive boost to crypto currency adoption and accessibility. 

https://coinnounce.com/samsung-galaxy-s10-cryptocurrency-cold-storage/

While Samsung have denied the reports at the time of writing , I’m predicting that this will indeed happen –  whether with them or another manufacturer. It is just too much of an obvious step. Phones with hardware wallets are just the beginning , and in 2018 we started to see signs of whats to come. 

Thus 2018 was an important year for improving the accessibility of Bitcoin. 

Thats a big hardware name potentially embracing the world of Bitcoin. What we’d like to see though are big retailers and institutions jumping in on the other side as well. For that, we need to talk about ….

Bakkt – Taking Crypto mainstream 

For years, people have been saying that for Bitcoin to be successful, it needs to be regulated and secure, with the big names in banking involved. This thought, however, brings fear and anger in equal parts to the Bitcoin traditionalists, who will argue that the point of Bitcoin in the first place is independence from traditional institutions. 

The thing is, though, that it was only a matter of time before we saw some big names do something in this space. Enter Bakkt. 

The curiously named Bakkt ( some say that it refers to “Backed”, referencing the significant corporate backing that the project is receiving ) is an ambitious project that aims to become the worlds first open, seamless global ecosystem where consumers and businesses can buy, sell, store and spend digital assets simply and safely. Quite a mouthful, but this has the potential to be the breakthrough that takes Cryptocurrency mainstream. It more than an exchange though, Bakkt will facilitate trading in crypto and payments for merchants. Announced in August 2018, Bakkt was created by the people behind the NYSE, and the two big names that were part of it at launch were Microsoft and Starbucks. Thats right, this project will scale globally running on the Microsoft Azure platform, and with Starbucks involved it seems like the ultimate aim will be to allow people to easily pay for their coffee and breakfast using crypto. Which is the holy grail. 

Pic 3 Bakkt

Bakkt was supposed to launch in December 2018 , but has been pushed back to Jan 24, 2019. According to the CEO of Bakkt, Kelly Loeffler, the interest in the platform has surged and Starbucks isn’t the only retailer onboard, although no other names have been released at the time of writing. Still , if you see the potential of this project , you will know that this is something that has been eagerly awaited for years, and simply by launching, could cement that cryptocurrencies are here to stay. 

And 2018 was the year when Bakkt was announced, making it a landmark year again for both Bitcoin and all cryptocurrencies. 

A note on price

There have been other smaller developments in 2018 in addition to the above, including a real reduction in Bitcoin transaction fees. Now, the tone of this article thus far has been somewhat positive. Surely, you counter, that this is at odds with the general sentiment out there at the moment ? Many are predicting ( again ) the end of Bitcoin and are smugly posting on LinkedIN and Twitter about how it was a bubble and a scam. 

Well firstly, to counter your counter, if we want Bitcoin to be a successful digital currency, then quite simply, you would need to have in place security, accessibility, scale and mainstream support. All of the above speak to exactly that, and the breakthrough in getting to the above all happened in 2018. 

Secondly, once the above is in place, especially mainstream support, Bitcoin could have a value of $100 per Bitcoin and be a successful digital currency. Why must it be worth a million dollars to be a successful currency? That makes no sense. 

Don’t be this guy ( see article from 1995 below calling the internet a fad ).

PIC 4.jpg

Now, if we pose the question as to whether Bitcoin is a store of value, a new asset class, then you would want to look at the valuation of the asset. A steep drop in price, as seen in 2018, does indicate a problem. I won’t speculate as to the reasons for the 2018 crash, except to say that if critics are calling it a bubble, it was the latest in a long line of bubbles, and the overall trend indicates a parabolic growth curve.

What I will say though, is that when you factor in all the developments listed above, there is a lot of work going on in the background for something that is supposed to be dead according to armchair experts. And if the expected outcomes of the above are realised and we do see progress in actually being able to use our cryptocurrencies as currencies, then the demand, as well as the built in deflationary mechanisms ( like the guaranteed finite supply ) may well end up causing the value of the asset to rise……. Something to ponder in spite of the doom and gloom. 

Bitcoin in 2018 – the price may have gone down ( perhaps temporarily ), but the value certainly seems to have gone up. Let me know your thoughts below. 

Categories: Futurism, Tech Tags:

Blockchain 3.0 – The Enterprise Blockchain

July 10, 2018 Leave a comment

With all the hype around “Blockchain”, I was thinking the other day that people are starting to get Blockchain fatigue. The term itself has been heavily overexposed – and it’s probably not the best time to write ANOTHER blockchain article, right?

The problem is, though, that the overexposure of the Blockchain concept has caused confusion. Everyone is talking about the potential solutions that we’ll see using “blockchain technology”, but we don’t always see practical examples of how these will be delivered. In fact, there are currently serious technical limitations to overcome for feasible solutions to be delivered, which I will explore in this article.

To ultimately overcome these limitations, I believe that we are now seeing the next iteration, Blockchain 3.0, which is designed with the demands of large enterprises in mind. Blockchain 3.0 will be where the bulk of consortium solutions are implemented.

This is no way means that the “public” blockchains (like Ethereum), the basis of cryptocurrencies and public DApps currently, won’t be used for fantastic projects in future. It just means that there are certain requirements that Blockchain 3.0 will have to address. So, another article it is….

Blockchain is not just about currencies

Recently, I’ve been doing some public speaking at various events. When the topic is about blockchain, and potentially the exciting business solutions unlocked by blockchain, I normally hear questions about Bitcoin. Many people still associate the two very closely, and with good reason, as Bitcoin gave us the original Blockchain.

However, as much as I like Bitcoin, when I’m having an Enterprise Blockchain discussion with customers, I normally start by saying “Forget about Bitcoin for a minute”.

The reason I say this is because many people automatically bring all of the current issues with the public blockchains, the ones designed for cryptocurrencies, into the Enterprise Blockchain discussion. This sometimes seems to “kill” the Enterprise Blockchain discussion before it even starts, with many not getting to see potential benefits of the Enterprise Blockchain. To explore this concept, lets forget about cryptocurrency and re-examine the use case of Blockchain outside of Cyrpto.

The opportunity

Let’s go back to the opportunity that we see with the Enterprise Blockchain. Now here, you’ve probably read a million articles already on this topic – “10 Ways Blockchain will change Financial Services, Number 5 is particularly shocking!”……but really, clickbait headlines aside, the possibilities are very exciting.

Blockchain in the Enterprise context is about a data layer that can be shared across organizations in a safe and secure manner. You will see the use cases grow, across industries, day by day, but what you will also see are some patterns emerging.

Firstly, an enterprise blockchain solution seems to regularly involve the transfer of an asset, be it a physical asset, contract, or an asset of high value.

Secondly, there is a cross organizational workflow. The easy example here is a manufacturing process with many actors on the supply chain. A blockchain could be created to identify the state of a particular batch of goods, as it is being manufactured, with all actors being given a view into the current state of that batch. Supply chain is indeed a field where blockchain will play a big role going forward.

Thirdly, there would be an element of audit or reconciliation, that is usually causing pain, that can be relieved by an enterprise blockchain solution.

The potential use cases have already exploded, and everyday we see articles describing these. As I mentioned though, nobody talks about how these will be deployed. You are not going to deploy thousands of these “semi-private”, or Consortium solutions, on Ethereum, or any similar platform, at least not today. Let’s investigate why……

How we got here

As mentioned, Bitcoin gave us the original blockchain, call it Blockchain 1.0. It is a simple ledger that records transactions in sequence, and the entire chain is distributed, with verification happening across multiple nodes to confirm a transaction.

We then saw this evolve to something which could include logic to perform all manner of tasks. The first Blockchain 2.0 implementation was the Ethereum Network, and the added code was called Smart Contracts.

Both of these became massive global networks, with nodes popping up everywhere to perform verification, and miners earning rewards for their verification efforts (in the form of the cryptocurrency itself). Further alternative blockchains were developed, with improvements in security, transaction speed and other areas, but the core pattern was a massive distributed public network on which new types of solutions could be built. It really was the start of something entirely new in the tech world.

The new problem

The “public” blockchains were never meant specifically for the Enterprise world though. Although many of these have been proposed as platforms for Enterprise solutions and could well end up being used for such solutions, especially Business to Consumer, a few deficiencies have come to light.

The public blockchains were designed to work in a tremendously hostile environment. This is the reason that the consensus mechanism implemented by blockchain technology was a big deal in the first place. Furthermore, transactions are “in the clear” for everyone to see, and multiple nodes execute the transaction for verification. This secure verification guaranteed (outside of a 51% attack), that transactions were correct and immutable.

When looking at using Blockchain in the Enterprise world, the very safeguards that ensure the integrity of public blockchain networks, some of which listed above, bring about scalability problems. For instance, the public Ethereum network has an average processing rate of 20 transactions per second, with a typical transaction latency of around 10-20 seconds. By contrast, the Visa credit card processing system averages 2000 transactions per second. Newer blockchain technologies do address this, with other compromises. This isn’t the only issue though.

All transactions, smart contract code (bytecode) , and state are typically in the clear—visible to anyone who joins the network. This may be desirable in the cryptocurrency / public DApps world, but not in the enterprise world. For a public solution, total transparency is desirable. For a private Enterprise/ Consortium solution that utilizes Blockchain technology, why would you want everything exposed to the public? Once again, there are solutions being developed to address this, but there’s more to consider.

Large enterprises have become accustomed, over the last few decades, to building out secure, reliable high-performance infrastructure that they manage, to run their critical business applications and systems. These often come at significant cost, but this was also very necessary to keep an enterprise running in a highly competitive market environment.

Being used to this, will enterprises now build critical applications on public networks that offer no or unproven guarantees in terms of scale, uptime and security? Any enterprise architect knows that platform choice is critical due to risk mitigation, auditability, fault tolerance and level of service. Who provides these guarantees in a public network where one of the nodes processing your code could be a PC in someone’s bedroom?

You also can’t store alot of information on the public chains, and when you do it costs you. If you reference “Calculating Costs in Ethereum contracts” ( link in the addendum) , it mentions that at an ETH price of $295, it would could $5000 to store 1MB of data on the blockchain. The “gas” concept is actually there to make you use as little resources as possible. This is to ensure that the network runs efficiently.

Then there is the power issue. You may have seen the stats but basically power consumption of all the Bitcoin mining nodes are significant. On other public blockchains, consensys mechanisms like “Proof of Stake” have been proposed to counter this, but this will not work in the Enterprise world. You cannot rely on actors owning a predetermined amount of a cryptocurrency to keep an Enterprise platform running. What do we do about this? Firstly, Enterprise blockchain platforms will typically run on advanced clouds, where the power draw of compute has been optimized. Secondly, enterprise blockchains will allow you to choose consensus algorithms to determine the level of computational intensity required – being “private”, the consensus method need not be the most stringent.

What is the point of a “private” blockchain?

Firsty, these Enterprise blockchains could be Consortium Blockchains, shared between large enterprise organizations, government organizations and regulatory bodies. The consortium members are known and controlled. The actors are mature, with robust enterprise grade IT environments and security policies.

Secondly, when organizations are sharing confidential information with other organizations, they don’t normally want this to be public. The point of the blockchain is easy sharing of information between members of the consortium. In the past you could have had a single database to do this – the question is where does it sit and who own it? The blockchain makes this “public” between members of the consortium.

Lastly, enterprises want familiar development and management options, as per the rest of their IT systems. This reduces risk, both in terms of security and time to solution. Enterprise blockchains will allow Smart contract development in a variety of languages and tools like Visual Studio, which are already familiar to enterprise development teams.

Blockchain 3.0 – The COCO framework

An early leader in presenting an Enterprise Blockchain platform is the open-source COCO framework. The COCO framework allows a consortium of enterprises and government bodies to implement a blockchain solution, using the ledger technology of their choice ( eg. Ethereum, Corda, Hyperledger), but also implements some technological enhancements that address the shortcomings of the public blockchain solutions.

Some of the benefits of a framework like the above would include :

  • Faster transaction speed – The COCO framework runs in the Azure cloud, and this implements Intel’s SGX in order to create a Trusted Execution Environment. The network of trusted nodes created reduces the consensus problem from Byzantine fault tolerance to crash fault tolerance. This means that the consensus algorithm can be simplified in certain applications – ultimately giving you a much faster transaction speed than on a public blockchain (where you would never do this).
  • Flexible confidentiality models – Because COCO uses industry standard authentication and authorization ( like Azure AD ) , transactions and smart contract code can be processed in the clear yet revealed only to authorized parties. This would reduce the need for complicated confidentiality schemes, like Zero Knowledge proofs and zkSNARKS, which can become computationally intensive.
  • Reduced energy usage – This would be a major advantage. By reducing computationally intensive consensus algorithms, like Proof-of-Work, and running nodes in an optimized cloud, power usage can be reduced and controlled.
  • Enterprise storage and interoperability – I mentioned the problems with storage limits and “gas” above – with the Coco framework, Microsoft allows you to interact securely with other cloud assets for storage and analytics functionality. An important development here is the invention of the “Cryptlet“- Cryptlets are off-chain code modules that are written in any language that can execute within a secure, isolated, trusted container.

 

Consensys

With the Coco framework, consensys is still required for transactions and smart contract state. However, compared to a public blockchain, every node fully trusts every other node.

Because of this, there is no need to defend against Byzantine faults. Blockchain updates that do not conflict with existing state maintained by a VN can be unequivocally accepted. The end result is that the Coco framework does not require wasteful, compute-intensive algorithms for proof-of-work, potentially unfair proof-of-stake algorithms, or latency-inducing time-bound algorithms.

In addition to the above, the Coco Framework is designed to support pluggable consensys algorithms, like Paxos, or the Microsoft developed Caeser. This ability to choose will impact the transaction speed.

When I speak to enthusiasts about Enterprise blockchains and all of the above, some of them immediate start protesting about whether its decentralized, whether it’s a “real” blockchain etc. This isn’t the point.

As Enterprise blockchains develop (and the Coco Framework is one example, probably the most developed offering thus far) , you WILL see a deviation from some of the goals of the public blockchains in order to satisfy the needs of private consortium solutions. This is perfectly fine – enterprises building blockchain applications for public consumption could still choose to utilize one of the public chains where required, and those will continue to stay true to the original goals of blockchain (some of them at least).

Conclusion

With large corporations now scrambling to think about how they will utilize Blockchain, the time for this technology has arrived. The technical community has sold the concept, and the business community has started to embrace it. What would be a disaster now is if some applications were deployed onto public chains and the performance or security let the solution down, causing negativity around the concept.

The evolution of public blockchains will continue though, make no mistake. Look at technologies such as Bitcoins Lightning Network and Ethereum’s Casper Protocol and Sharding system. But it will take time for the winners to emerge, and even a highly performant public chain may not be desirable for a consortium to utilize for various reasons.

Therefore Blockchain 3.0 will be the emergence of the cloud-driven, enterprise grade blockchain platforms, like the Coco framework, and the further innovation that those will bring. Once enterprise architects start understanding the differences between the different types of blockchain platforms, I think that we will see the anticipated uptick in consortium solutions being delivered.

Links

1) Mark Russinovich announcing the COCO Framework

here

2) Discussion on COCO Framework

Microsofts COCO Framework

3) Calculating Costs on the Ethereum network

Categories: Uncategorized

My tech predictions for 2018

February 14, 2018 Leave a comment

In case you missed it :

https://steemit.com/tech/@thavash/my-tech-predictions-for-2018

Categories: Uncategorized

Understanding Ethereum

December 4, 2017 Leave a comment

Ethereum

Right now is absolutely the prime time to talk about cryptocurrencies. In November 2017, the value of Bitcoin exploded, surging so quickly, that it was the catalyst to bring Bitcoin into the public lexicon. However, Bitcoin is just the most well known of the cryptocurrencies – there’s a whole world of them out there. Many people who have been investigating cryptocurrencies have come across something called Ethereum. What is Ethereum ?

Well, Ethereum is NOT a cryptocurrency. Bitcoin is a cryptocurrency. Ethereum is a platform.

Ethereum is an open source platform, which exists to build and distribute decentralised applications. These applications will operate on a network of hundreds of thousands of nodes across the globe. There will be no central “server” for these applications, they operate in a peer-to-peer fashion. These decentralised apps are known as “dapps”, and many are excited but the potential they offer. The value of the Ethereum platform increases as more apps are written for it.

There are benefits to this approach. Applications that are centralized could, for example, have a higher risk of attack. In a decentralized architecture, there is no single point of failure.

The Blockchain

One trait shared with Bitcoin is the reliance on “Blockchain” technology at the heart of Ethereum. Bitcoin, as a digital currency, was the first and most well known use of the blockchain technology. Ethereum makes the blockchain technology available to uses other than cryptocurrency. Technically, you could say that Bitcoin is the first “dapp”, with the cryptocurrency being the first widespread application of blockchain technology. The proponents of Ethereum however will tell you that the real potential of the blockchain is to come. The blockchain nodes could run everywhere, on premises or in the cloud.

The developers writing applications to run on Ethereum need to write in something called a “smart contract”. This refers to a series of steps that will define how a transaction is handled. The smart contract can store data, perform logic or interact with other contracts. Developers can use Smart Contracts for things such as asset registration, land ownership and anything else where keeping a permanent record is essential.

Who is backing it ? 

Back in 2015, Microsoft became the first of the tech giants to really talk seriously about cryptocurrencies and blockchain. Firstly, Microsoft announced that it will support Bitcoin as a currency for purchases on the Microsoft online store. The details of how to go about this can be found here : https://support.microsoft.com/en-us/help/13942/microsoft-account-add-money-with-bitcoin

However, when it comes to Ethereum, Microsoft announced that it was betting big on Ethereum as a platform. Microsoft rolled out Coco, a framework designed to facilitate blockchain adoption by adapting existing blockchain protocols or by creating entirely new protocols, and the Azure Blockchain service, a BaaS (blockchain as a service) that enables businesses to quickly and easily configure and deploy a blockchain network.

The main advantages of the Coco framework are its ability to process over 1,600 transactions per second, something which neither the Bitcoin nor Ethereum blockchain can support at the moment (This would be for your private Blockchain).

The Coco framework will also use a unique technology called trusted execution environment (TEE). The trusted execution environment will be able to host the blockchain code in a secure box which will use Intel’s Software Guard Extensions or Windows’ Virtual Secure Mode in order to validate the environment.

Coco Framework

As you can see, the Coco framework works with a few Blockchains, but Ethereum is probably the most popular so far.

Now what is interesting, is that at the AWS re:Invent summit in November 2017, AWS has, surprisingly to many, not announced anything around Blockchain technology. Time will tell as to whether this is wise.

So what am I actually buying on my crypto exchange ? 

What you buy, if you’re investing in Ethereum, is something called Ether (ETH). This is the cryptocurrency piece of Ethereum. What is the relationship between the two ?

If you write an application on Ethereum, why should someone running a node process your program’s transactions ? Well, because you pay them to do so. And you pay them in Ether, the currency of Ethereum.

From ethereum.org – “It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources).”

If Bitcoin is compared to DIGITAL GOLD, an asset that is worth investing in, then Ether can be compared to DIGITAL OIL. Now that is a comparison that many of you would understand.

Some thoughts 

Now, to add my thoughts / concerns to the Ethereum debate.

Firstly, many are actually investing in Ether hoping to see similar returns as with Bitcoin. In other words, they want to see the price of Ether go through the roof. Wouldn’t this be bad for people running applications on the Ether Blockchain ? If the price of Ether is both highly volatile and also quickly inflates, how does that make Ethereum an attractive platform to run applications (Since your running costs for your application are in Ether) ?

On the other hand, if its too low, there is no incentive to mine. Perhaps someone can clear this up for me in the comments section.

Secondly, there’s the issue of blockchain size. While researching Ethereum, I decided to get into the spirit of things and do some mining, not to really make much profit, but to experience how it all works. After installing Geth, I waited for it to download the blockchain and I could then start. After downloading over 20Gb on my crappy connection ( with no end in sight ) I decided that this wasn’t a great idea ( I then saw that you don’t need to download the entire thing ). Still, some are saying that the Ethereum blockchain will be more than 1TB very soon. Good thing that there is talk of a sharding system.

Thirdly, transaction speed has always been an issue with cryptocurrencies. Bitcoin, believe it or not, can only really process about 5 transactions per second. Looking at other platforms :

•DASH – 10 transactions per second

•Ethereum – 20 transactions per second

•PayPal – 193 transactions per second average

•Visa – 1,667 transaction per second

•Ripple 1000-24000 transactions per second, real number is unknown

So Ethereum is better than Bitcoin in transaction speed, but considering what it wants to do, the transaction speed is not enough. There has been talk of a project called Raiden, however, which aims to dramatically improving scaling of Ethereum.

The other thing we’ve already seen is the blockchain become “jammed” and a whole backlog of unprocessed transactions form. The screenshot below shows a point where over 9000 transactions were sitting unprocessed in the blockchain.

Ethereum Network Jammed.jpeg

Once again, perhaps something like Raiden will address this.

Fourthly, there is the debate about running Ethereum nodes in the cloud – is this counter to decentralisation ? The one thing I can think of is the potential benefit of energy efficiency. There is already a debate about the inefficiency of mining from an electricity perspective, and how this in turn makes cryptocurrency inefficient. If nodes are in the cloud, however, remember that the large data centres are built at tremendous economies of scale, and you will not find better efficiency in smaller scale DCs, so from that perspective it may help somewhat.

Lastly, in spite of the early issues mentioned, there really is a sense in the community that Ethereum could be the Internet of the 2010s, and that we’re on the verge of something big. At the very least, it provides us with options.

As for Ether, I cannot tell you whether to invest in it or not, but as you can see, you do want to be following it very closely over the next few months.

Let me know your thoughts in the comments section.

Categories: Azure, Futurism, Tech
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