State of Blockchain at Slush 2016

Earlier this week Slush 2016 drew over 17,500 attendees interested in startups, business, and technology to Helsinki for two days. One of this year’s conference tracks was dedicated to financial technologies, and I found a panel on blockchain technologies to be one of the highlights of the event.

Participating in the discussion were Elizabeth Stark from Lightning, Jutta Steiner from Ethcore, Brian Behlendorf from Hyperledger, Thomas Conté from Microsoft, and Paul Puey from Airbitz. Their backgrounds cover many corners of the ecosystem: public and private blockchains, distributed ledgers and smart contracts, digital currencies and enterprise solutions.

The conversation started with use cases. Elizabeth took us back to the dawn of the Web and early visions of digital cash. Then she explained how the proposed Lightning Network would bring Bitcoin closer to that ideal with instant payments and lower fees. (Recently Bitcoin transaction confirmations have been far from instantaneous with the daily median confirmation time ranging from 6 minutes to spikes as high as 29 minutes.)

Continuing on the theme of increased efficiency, Brian mentioned securities settlement, which currently takes two business days in Europe. Certificate storages for university diplomas and diamond origins were mentioned as well. These use cases highlight immutability, an important property of a blockchain.

Talking about immutability, Thomas raised the point of the right to be forgotten. While early blockchains have been primarily distributed ledgers for digital assets, any data, including personal information, could be stored on a blockchain, and once something is stored, getting rid of it becomes a significant undertaking.

Thomas also stressed that although there is a lot of interest in private blockchains for enterprise solutions, public blockchains are essential for hardening the core technologies in adverse conditions. On the other hand, Brian lamented the environmental impact of proof-of-work systems currently used by Bitcoin and Ethereum.

As blockchains are essentially distributed databases, Brian likened the differences between public and private blockchains to those between SQL and non-SQL databases. He also reminded that attaching a blockchain to a system does not make the system more secure. On the contrary, it makes the system more open and therefore potentially more vulnerable.

Regarding the future, Jutta mentioned that Ethcore is currently working on a third generation technology, Polkadot, which will enable interworking between public blockchains, such as Ethereum, and private blockchains.

The consensus was that we are still in very early stages with blockchain technologies. Also, the participants agreed that when discussing blockchains, more emphasis should be on the applications and particular use cases. Like database systems, blockchain systems have become, after all, increasingly both more generic and more varied.