Dr. Lesley Czuma, the Head of Communications and Partnerships at Insolar, an organization focused on developing an enterprise-grade, blockchain platform for “enabling seamless interactions between companies”, has argued that modern businesses are still in need of a full-featured software product which would allow them to build DLT-enabled applications.
Distributed Ledger Tech (DLT) Can Be Transformative If It Can Serve Enterprise Needs
Czuma, who earned her Ph.D. in Political Science and Economics from the Free University of Berlin, told CryptoGlobe that Insolar is “dedicated to maximizing the potential and widespread use of blockchain and Distributed Ledger Technology (DLT), because we believe that it has huge potential to transform society and the economy, if it is optimized to serve enterprise needs as we are.”
She explained that Insolar does not build on other platforms, as they have built their own “to fill a gap in the current market.”She further noted:
We interviewed more than one hundred C-suite executives to determine their expectations on DLT. The result was that no existing offer is sufficient for the needs of business, so we decided to create our own platform.
Improving Upon Features Found in HLF, Ethereum, Corda
Czuma, a former Senior Business Consultant at Shanghai-based Xinshi Advertising Ltd., added:
“[Insolar’s project] combines the learnings from all the key players already out there – and [aims to] top them in features and performance. Thus includes HyperLedger Fabric (HLF), Ethereum (ETH), and Corda. Our engineers are in the unique position to do this – we have [a fairly] large and experienced blockchain development team. Our main architects have worked on all of the three aforementioned projects.”
She continued: “To promote widespread use of our blockchain tech, our code is open-source on Github. We invite developers, both private individuals and companies, to contribute to our open-source code and also to build on our platform. What’s more, we make it easy to do so by using the most popular enterprise programming languages – Golang and Java.
Our platform is designed to be interoperable with others, which maximizes its reach because existing applications will be able to be used on top of it and their performance improved. It will also be possible to run native contracts on Insolar. Initial plans include running Hyperledger Fabric chaincode, as well as Go or Java-based contracts on the Insolar virtual machine.
Since it is also compatible with legacy IT, it breaks vendor lock. The platform has a layered architecture which makes it particularly developer friendly. You can build applications on the business layer without knowledge of blockchain. Insolar does not require expensive upfront investments in IT labor and infrastructure to deploy; it can be run on the cloud, securely and scalably. In fact, Insolar can even be used without running your own node.
Anyone can get involved and be part of our ecosystem. We invite you to be proactive. We are preparing tech documentation which will facilitate building applications on the Insolar platform and can be requested from us directly. The Insolar Tech Paper is available online.
Public Versus Private Blockchains, Which Is Better?
When questioned about whether public (permissionless) blockchains are better than private ones, Czuma noted:
“We need both, because business requires that flexibility. The good news is, Insolar enables us to have both. Let’s take a closer look at the pros and cons of public/ private blockchains.
On the one hand, blockchain is praised exactly for its public nature as a guarantor of “instant trust” between trustless parties, and this is crucial while the number of stakeholders involved in interactions between businesses is rapidly growing. However, the immutability of protocols, decentralized, secure records, and transparency can still be guaranteed even if networks are not entirely public.
At the same time, business involves many transactions which require privacy – such as client and financial data and regulatory data restrictions. Insolar offers hybrid permissioned networks based on its open-access public blockchain platform, which also enables proprietary, private transactions.
How that works? We use domain governance, which you can read about in detail here.
Basically, on Insolar, everything is a “smart contract” and ruled by domains. Open and closed blockchain ledgers are merged at the infrastructure level so that public and private transactions can be supported. But there is a key difference between our solution and what private blockchain protocols typically offer:
We do not isolate private domains from each other or from other networks. A private domain owner is able to assign one or more nodes in a domain as a proxy node, so all external communication is handled through it. Proxy nodes work like a gateway between a private domain and the public net.
Domain policy is applied before smart contracts are executed and domain policy determines the data privacy settings for the nodes that run the smart contracts. Another example of domain policy concerns cybersecurity and data encryption. Since different countries have different encryption standards, the domain owner is free to set cryptography standards that are compliant with their local regulators.
Policies can differ with regard to the rules for changing the domain itself, access from/to other domains, validation rules for logic (e.g. consensus, number of voters), mutability of code (is it possible for the code to change and what is the procedure to do so), mutability of history – e.g. to implement the EU’s General Data Protection Regulation (GDPR) or legal action via authorization requirements defined by the domain – and applicability of custom cryptography schemes.
Obviously, blockchain networks provide more value when more participants are able to join, and the flexibility which Insolar’s hybrid networks, system interoperability and legacy IT compatibility offer can maximize the potential to join the network and thus dramatically hasten enterprise blockchain adoption.”
Main Use Cases For Blockchain Technology
Responding to a question about what she considers to be the five main use cases for blockchain technology, Czuma said:
“First of all, let me say that we have two main products.
1) The Insolar platform: It is designed to be interoperable with other platforms, so existing solutions can be adapted to run on it and their performance improved. Alternatively, developers can build their own solutions on top of it.
2) Business use case solutions: These are the solutions which we build on top of the platform that solve pain points to optimize particular processes.
Regarding these use case solutions, I would name the following five based on their impact and potential to transform business by solving major challenges, saving costs, and creating new opportunities.
1. Supply Chain:
This case is cross industry and involves complex processes, multiple stakeholders, and diverse regulatory jurisdictions. Typically, essential information that is mutually needed is siloed. As such, supply chain operations is prone to mistakes which can cost businesses their very existence.
Just think of food security and instances of product contamination and recall. Quality and inventory control, payments, delivery, tracking goods for authenticity, and cross-border customs compliance are some of the elements that it covers. DLT solutions can simplify and streamline supply chain to automate processes like payments, make information transparent to all the relevant parties in real time, and even give consumers’ access to details on product production and content.
The features unique to Insolar like domain governance and hybrid networks can ensure compliance to customs requirements while selectively securing sensitive data. Besides saving costs for business, the solution can radically improve the well being of end consumers – think of e.g. validating pharmaceuticals and the maintenance of fleets, including vehicles and planes.
2. Collaborative Agreement Management:
Insolar has a revolutionary tool which translates legal contracts into code-based smart contracts, allowing for radical process simplification and overhead reduction via system integration. Expensive legal mistakes are prevented by ensuring compliance to current legislation (linked to a regulation database).
Contract requirements are tracked and automatically executed, so that fulfillment is guaranteed, and agreements are current. A contract lifecycle dashboard and contract relation tree with links to amendments, subcontracts, and execution results gives full status transparency. Finally, a secured contract repository provides a single source of the truth. This instrument is a much-needed improvement for practically any business.
3. TES – Transactive Energy Platform
The Insolar TES enables the use and storage of renewable energy on a needs basis through a prosumer scheme which employs electric vehicle (EV) charging. Overall, the system strengthens utilities and ensures their key future role by increasing grid resilience and efficiency though smart-demand mechanisms involving (enterprise) microgrids.
Energy can be more effectively distributed and used in peak demand times. This is great news for fighting climate change, and also for increasing the available renewable energy supply. As economies grow, energy demand is increasing, even while we need to curb CO2 production. The TES contributes to solving both challenges. For this solution, Insolar has been named by the World Energy Council (UNO) as one of the top 100 most innovative companies worldwide promoting the transition to sustainable energy.
4. Commodity Trading:
Typically, negotiations and trading are conducted via telephone or email with limited transparency. Important data is fragmented and resides in unstructured documents. Centralized infrastructure does not provide for a viable solution, because delegating trust to one of the stakeholders comes at a risk to the others.
A blockchain-based trade management platform decreases labor-intensive paper document exchange, enhances transparency and reduces business network complexity throughout the entire transaction lifecycle. While the focus is on commodity buyers and sellers, other parties, such as banks and regulators, can get access to the required documents and data.
Since our network is hybrid and domain governed, data sharing can be done selectively and security ensured. Consider how important this is if the commodity which is being traded is, for instance, uranium.
5. Trade Promotion:
Promo management is a resource-intensive, manual set of operations whereby data is gathered upon request. Moreover, data about promotions is entered and managed separately by each stakeholder. A blockchain-based trade promo management system integrates all parties involved within a single ecosystem. It brings all operations under one platform, captured by a shared ledger. The platform streamlines the entire trade promo process from negotiation to execution to payment.”
Will Bitcoin Become A Globally Accepted Currency?
When asked about whether she sees cryptocurrencies, such as Bitcoin (BTC), becoming a more widely adopted medium-of-exchange (MoE) in the foreseeable future, Czuma said:
“Overall, I would answer with a careful “yes” but add that several things need to happen before it is viable as a widespread MoE – notably, legislation, and it is daunting to predict a timeline for this.
No global regulator exists at the moment, and in the majority of countries, cryptocurrency is not considered to be legal tender. This is one of the reasons why its use and adoption are limited. At the same time, there are widespread concerns among regulators about the risks associated with the use of cryptocurrency, which include tax evasion, terrorism, money laundering and other illegal activities.
There is also discussion that the lack of regulation of the sphere enables the manipulation of supposed trading volumes on exchanges, which in turn promotes wild speculation and is purported to be one of the reasons behind the recent market decline.
In fact, the market valuations of crypto are extreme and erratic – just consider that the price of Bitcoin climbed to 20,000 USD and then fell to below USD 3,500. There is also concern that regulation is needed to protect consumers and investors, and we have all heard of the spectacular instances of hacks such as the theft of $530 million worth of digital currency in Japan.
At the same time, crypto has grown impressively – the total market capitalization of assets currently comprises USD 115 billion, and since the first ICOs, these have cumulatively gathered over 20 billion USD. Considering these volumes, there is some concern that cryptocurrencies could affect overall financial stability.
However, this is currently unlikely, as the combined market value of cryptocurrencies amounts to less than 0.15% of global GDP. Nonetheless, there is no question that market regulation is necessary and on the global agenda. Not only is the majority of governments planning to initiate legislation on crypto, major international oversight organizations such as the IMF have also called for it.
Of course, once crypto is regulated, it loses some of its current appeal, such as not being traceable to individuals. On the other hand, considerable new advantages will appear — for instance, once global regulation and consensus on it as a MoE is secured, crypto can save international business vast amounts of money and increase economic stability and worldwide trade by e.g. making currency exchange obsolete.”
Insolar Project to Go Live in Autumn
Responding to a question about the current state of development of the Insolar project and what are the main things that are part of the project’s roadmap, Czuma stated:
“The Insolar platform will go live in autumn. In the meantime, decentralized applications (dApps) can already be built on it. Our development team has achieved and will continue to add unique key features that set us apart.
Insolar’s core features will comprise:
1. Support of simultaneous public and private networks and multi zone security.
This enables compliance with domain governance rules and global regulations such as GDPR. Domain owners are able to set different levels of security. This feature promotes mainstreaming and wide-spread use of the Insolar network by enterprise clients.
2. Upgradable smart contracts
Insolar contracts are separated from the platform code. This means that the contract owner can switch between code versions, so that the contract automatically updates to new rules and the users are notified about the change.
3, Support for transactions longer than one block
Enterprises require longer and more complex transactions. Unlike any other blockchains, where validation is done by all nodes in the same time — on Insolar, every smart contract is executed by a single node, and then validated by other nodes. This allows to execute large and long transactions.
Other relevant features which Insolar offers as part of its unique platform profile include:
4. Dynamic consensus that changes the number of validators based on the value of the transaction. Fewer validators are required for low value transactions (which reduces costs) and more validators for high value transactions (which reduces risks). Businesses can plan their transactions cost-efficiently and securely.
5. Interoperability: We will allow HL Fabric chaincode to run on the Insolar platform. That will help those enterprise clients who are already experimenting with blockchain to smoothly migrate to the Insolar Platform.
As already noted, Insolar is also compatible with enterprise legacy IT systems. This feature maximizes the number of enterprises that can easily join our ecosystem and use our platform.
6. Unlimited, linear scalability — on Insolar, as more hardware joins the network, throughput grows. Note that this is unique and highly valuable, since with classical blockchain tech, the opposite is the case, and the more nodes join the network, the slower it becomes.
To sum up, everything that Insolar does is directed at adding value for business. We are [striving to enhance] DLT beyond its original crypto context to serve the specific needs of enterprise. We offer solutions to the main pain points that businesses face. We do all of this based on an open-source platform and services which are directed at making DLT use widespread and mainstream to maximize its benefit.“