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Vostok and the Future of Enterprise Blockchain

Waves | 04.18| 394

Our new project implements ideas from open blockchain ecosystems into the traditionally closed world of enterprise technology.

Blockchain and distributed ledger technology, as so-called foundational technologies, have not instantly disrupted our economies and business practices. They are taking their time to find their place and meaning in the current world. After all, we’re talking about a whole new paradigm, about decentralized technology that works without any central control, and it takes a while for the world to digest the ideas and implications of this.

Blockchain technology emerged as a way to create fully decentralized ledgers (databases), with access granted to any external participants wishing to join the network. The immense success of Bitcoin kick-started seemingly counterintuitive attempts to apply blockchains in the enterprise environment, an environment that is usually separated from the outside world and doesn’t provide free access to anybody who wishes to peek into it. Many companies worldwide are still figuring out ways to apply blockchain ideas to enterprise; the idea of “permissioned” or “administered” blockchains, which emerged around five years ago, is slowly finding its way into the real world and production-stage applications. After years of prototyping we finally see live applications; the enterprise blockchain market is estimated to reach a value of $20 billion by 2025.

Therefore the ideas behind blockchain technology are so powerful that they can be taken over to different realms and be adjusted to them. What is the future of enterprise blockchains? What ideas does our Vostok project, the enterprise DLT platform to be launched this summer, aim to bring into the world of enterprise applications?

First off we must define what permissioned blockchains essentially are. In the (hopefully not very distant) future enterprise apps will be able to run on open blockchains; unfortunately right now they do not provide the level of security guarantees and confidentiality necessary for large-scale enterprise-grade solutions. So permissioned chains seem to be a natural choice if one tries to combine enterprise and blockchain — if there’s a party that controls the network access and manages the participants’ roles in the network, things become much simpler. The administrator provides security guarantees and the blockchain data structure can be used to synchronize the data among the network participants.

Effectively, blockchain tech becomes a data synchronization mechanism, which scales better than the ones that existed before blockchain (such as Paxos, for example). The reason for this is the fact that the blockchain network scales proportionally to the number of participants in it, since data sync is made through common transactions logs (blocks) that are exchanged between network nodes. In older approaches nodes had to essentially vote on accepted data, and that entails direct one-on-one communication between the nodes, which scales proportionally to the number of nodes squared. Linear scaling works much better if you have many participants; Paxos runs into scalability issues with just several dozens of nodes.

So, is this all that blockchain technology brings to closed enterprise networks? It seems like it’s not much?

From a technical perspective it might be the most important thing; but let’s not forget that there’s a huge ideological shift behind distributed ledger tech. Sometimes it seems that the ideas brought by Bitcoin are more important that any concrete realizations of them, including Bitcoin itself. We can think of essentially different architectures now; about synergetic unions of different technologies running on a blockchain foundation. We can bring a new level of transparency to enterprise applications; they can include parties that do not particularly trust each other and are bound to follow the rules imposed on them by the distributed architecture of the system. You can’t simply cook the books and corrupt sensitive data that is spread through the network in cryptographically-chained chunks and shared by network participants.

Could these systems have come to light before blockchain? Yes, certainly. It’s just that we understood their true purpose and place only now. Blockchain has given us inspiration and a push to disrupt decades-old architectures and take enterprise IT platforms to a new level.

But blockchain still doesn’t make much sense in an enterprise environment per se; one can’t just “attach” it to an existing application in a way that makes any meaningful sense. Enterprise apps should be built with distributed architecture in mind only if they really profit from it. Different technologies, such as IoT, Big Data and AI, which are essential now, should be combined on a blockchain layer. In this case, the distributed nature of the application serves as a kind of glue which brings different technologies together, giving them a new, holistic, meaning.

A good example of this is smart contract functionality. The “smart contracts” moniker seems almost inappropriate for open blockchains, where we actually just mean programs running in a way that is enforced by the distributed nature of the environment they run in. They are not real “contracts”. In a business enterprise environment this name starts making sense, since these programs can actually be real contracts, executing automatically based on clearly-defined and immutable logic. The customer receives a consignment, confirms a delivery, and the funds, locked in a trade finance transaction in a bank, are automatically unlocked; that’s the kind of business processes we’re talking about.

Open blockchain ideas make a lot of sense; they are strong and powerful even beyond their natural habitat. Vostok platform’s goal is to take all the viable and proven ideas which emerged in open blockchain ecosystems (such as tokenization, Proof-of-Stake consensus, smart contracts), add some features that are available only for permissioned systems (flexible blockchain computation, permissions control) and get the best of both worlds. Vostok offers open systems ideology in a closed systems setting.

Vostok has the feel and mechanics of open blockchain, being at the same time a collection of permissioned enterprise blockchains, secured by a permissioned public chain. Corporate chains are anchored to the public chain, by posting cryptographic proofs of their consistency.

This architecture allows us to introduce VST, a native network token. It brings tokenization ideas into the ecosystem’s economic model.

For example, the Vostok integrator company, which implements the Vostok platform for corporate clients, uses VST token as a payment mechanism that provides a way to build new interaction mechanics in the Vostok ecosystem — for example, the integrator company can provide support for a certain time period to customers if they hold VST tokens. This way a whole new economy is born, and the ideas from a decentralized apps ecosystem can be adopted into a seemingly totally different sector.

By launching Vostok platform we launch a whole ecosystem. It combines openness and control, the public VST token and corporate side-chains, taking corporate IT applications one (or several) steps further towards a future in which they will be able to run on secure and fast public platforms. That’s why Vostok is meant to be compatible with Waves, our open blockchain platform. Eventually they are going to merge into one global network, serving the needs of all types of businesses and applications, from large to small, and from governments down to local communities.

So what is Vostok?

Vostok is an opportunity to participate in the rise of enterprise blockchains

Vostok is the direct applications of Web 3.0 ideas to enterprise IT platforms.

Vostok is more than a blockchain, it is an ecosystem with its own economy, technology, and business practices.

Vostok platform will be launched in Summer, 2019.

Originally published at https://blog.wavesplatform.com on April 17, 2019.

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