Brian Behlendorf, the executive director of the Hyperledger Project, sees significant evolvements in blockchain technology from scale, interoperability, and governance in 2018 and over the next few years.
As a leading figure in open-source software and one of the primary developers of the Apache web server, Behlendorf is currently working on the Hyperledger project to create enterprise-ready distributed ledger technologies and develop a community of corporate blockchain developers.
Enterprises from De Beers, FedEx Corp., Walmart to JP Morgan Chase and Co. are all experimenting with the technology to reduce costs, increase transparency through the supply chain, and reduce instances of fraud or theft. Many companies are even participating in industry consortia or associations that are leveraging blockchain technology such as the R3, a blockchain for enterprises or BiTA, the blockchain in transport alliance.
According to The Wall Street Journal, as more companies move into the blockchain sector, Behlendorf believes that a core set of technology stacks will start to consolidate within the industry. “At a certain point the investor community will realize that lightning might not strike more than a couple of times,” said Behlendorf.
2018: The Year of Interoperability, Capital Investments, and Discovery
Behlendorf foresees that each enterprise “will be on multiple ledgers, except for the smallest ones.” He also predicts that in the next few years, the blockchain industry will be about directories and the ability to conduct transactions across different ledgers.
Since blockchains have verticalized and are specializing in their niches, Behlendorf sees excellent value in wiring them together. He notes that gaining interoperability is also more of a process rather than a destination. While interoperability is a higher priority now than a few years ago, Behlendorf remains unsure as to how this will roll out. Interoperability may involve wiring blockchains with common software underneath or common software on top.
Behlendorf also noted that a characteristic of 2018 is a surge of capital in the blockchain industry:
“Some of which, not all of it, is being used to write code and to test out how smart contracts, discovery, and cross-chain communication should look.”
Unfortunately, while a lot of companies will attempt to conjure the next Ethereum, the investor community will soon realize that these companies all have finite lifespans. Behlendorf believes that instead of building 20 different universes, it would be more efficient to select a few projects and invest the money in these.
The shift will, unfortunately, lead to less money invested in the technology. While he isn’t certain if consolidation will begin in 2018, he believes that it is something that will happen soon.
Governance Will Become One of the Industry’s Greatest Challenges
While most people discuss issues concerning blockchain’s technical problems, Behlendorf does not believe it’s the technology. “I think the tech is ready for the volume of transactions people want to throw at it and the flexibility of programming models that they want,” said Behlendorf. The problem is instead the governance:
“It’s hard enough for one organization to launch any new product. Getting multiple parties to agree on anything – like a time of day for a meeting, let alone a common application – will end up being a bigger challenge.”
Although standards are essential, building standards for the industry may be a prolonged process. According to Standards Australia, and the “Roadmap for Blockchain Standards” report released in March 2017, a lot of people dealing with blockchain technology require standardization for specific terms and jargon within the industry. Terminology ranked first as the priority order for development in privacy, governance, interoperability, security, and risk.
While blockchain technology can develop, its widespread implementation will be difficult if enterprises fail to understand specific terms from the industry.