Amazon plays his game with Blockchain Enterprise

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Amazon Web Services, the cloud computing arm of the e-commerce giant, is having its proverbial blockchain cake and eating it.

In late November, AWS introduced a new service during its re: Invest event that allows customers to create their own cloud-based blockchains, using Hyperledger Fabric or ethereum as templates for such projects.

That announcement was the next step in a lengthy process that saw the cloud giant continue to plunge his fingers deeper and deeper into the blockchain pond. Previously, AWS has shown its hand by tightening partnerships with companies such as R3 initiated by banks and, subsequently, Kaleido with ConsenSys. With Amazon Managed Blockchain, AWS was clearly looking to take it a step further, but at the same time, the cloud service company is not making any claims that all of its customers will benefit from the use of blockchain.

In fact, according to Rahul Pathak, director general of AWS for big data, data lake and blockchain, conversations with his customers have led Amazon to the conclusion that blockchain is not a kind of panacea, but is rather suitable for specific business problems that many customers simply do not meet.

"You can imagine a great producer who wants all his partners to write on his ledger on trading items through his network," explained Pathak. In these cases, a "blockchain network involves unnecessary complexity, because distributed trust or consent elements are not required".

The Amazon conference saw another cloud offer – Amazon Quantum Ledger Database, or QLDB – take the stage. This offer is marketed as a fundamentally simpler way to create databases protected by encryption and Amazon bets that in some cases customers will prefer this type of blockchain solution.

"Some customers wanted an immutable ledger, but centralized trust was ok, and that's why we have QLDB, and some wanted an immutable ledger, but also decentralized trust, and that's where Amazon Managed Blockchain came into play," he explained. Pathak.

Selection of accounting books

That sense of pragmatism – that some companies do not need a distributed database or simply are not interested in the blockchain – extends to the top of the AWS ranks.

As CEO Andy Jassy said during his speech at the Re: Invent: "We had not seen many examples of blockchains in production or could not be easily solved by a database."

In fact, AWS is claiming that blockchain is not required for most advertised corporate blockchain use cases. Again, some of AWS's clients – a list that boasts some notable corporate level names – are giving the blockchain platform a chance.

This list includes the communication giant Verizon, the electronics manufacturer Philips, the DTCC clearing and settlement provider, the aviation engine supplier GE Aviation, the Liberty Mutual and Guardian Life insurance companies, the software provider Workday and the technology provider Change Healthcare. Their logos can be viewed on the Amazon Managed Blockchain website.

For these first participants, until now only a preview is available and, in the case of the managed blockchain, it is Hyperledger Fabric. Ethereum will also be available in the coming months, Pathak told CoinDesk, but the exact dates are not public.

According to Daniel Johnson, CTO and Guardian Life's innovation manager, testing AWS's product is part of his ongoing experiment with the blockchain systems that the company has been running since 2015. This process has included development of private blockchain prototypes using ethereum, Hyperledger and some of the options available on Microsoft Azure.

Since Guardian has been using Amazon's services for several years, trying this seems logical – and more rational than joining a consortium and managing its own node – Johnson told CoinDesk.

"We'd rather have a big supplier and allow them to run lower level technical services, Amazon becomes a trusted third party instead of joining a consortium where you have to worry about that departing person or another person joining. We'd rather have a technology company that has financial stability and is really performing well, and rely on them, "Johnson said.

Addressing the issue of vulnerable data security outside the company's AWS cloud site, he said that in reality this solution is considered to be safer by Guardian.

"If there's a country that wants to hack your system, Amazon has fairly extensive security measures, different controls on the spot, they can do it much better than any other company," Johnson said.

If this is the thinking of other Amazon customers testing the new cloud service (the other seven companies have not provided detailed answers in this regard), and given that Amazon is now a dominant cloud service provider in the world (with 41.5% of the market, according to a report by the Cloud Security Alliance), the product could be a formidable competition for existing blockchain consortia, the first of which were recently published.

Inking relations

Strangely, Amazon recently partnered with numerous blockchain solution providers, but the new products were developed exclusively by the AWS team, said Pathak to CoinDesk.

In 2017, Amazon hosted Corda on its marketplace, allowing customers to deploy and use dApp on the blockchain developed by R3.

In May, another partnership was announced with Kaleido, the startup supported by ConsenSys, which creates corporate blockchains on ethereum. However, both the co-founder of Pathak and Kaleido Sophia Lopez told CoinDesk that Kaleido was not involved in the development of the managed Blockchain ethereum part.

"Kaleido is working with us through the number of other areas, their goal is to bring their service to AWS customers," Pathak told CoinDesk. When asked whether there will be a competition between the Amazon service for the construction of business blockchain based in Ethereum and Kaleido, he said he did not believe it was so.

"It's still very early and there will be plenty of opportunities for customers to work with either one of us or both," said Pathak.

Lopez told CoinDesk that the partnership with AWS was productive, helping to create more than 1,500 blockchain networks with Kaleido's service at AWS. But the Blockchain ethereum offer managed by the Amazon will only be "five to ten percent" of the solutions that customers need to perform with a blockchain, he said.

Other necessary parts are the constellation of identity, key management, business process modeling services, intelligent contract tools and other tools around the same blockchain technology. As Lopez said: "Customers need a lot more help".

"So far AWS has only one model or script for the initial one-off distribution [for ethereum], "she explained." It's a small step forward. They are trying to catch up with other sellers who have offered something similar in the last two years. "

But what about the blockchain?

While the approach may be applauded by the companies, AWS subreddit participants have recently issued skeptical tones during an AMA in late November following the launch of the twin services.

A user who runs the alsomahler manager has noticed that users will not be able to do anything if their transaction record is changed: "You can not try it simply by using a blockchain. and include transactions in a new chronology of blocks.Obviously, a user can keep track of the same blocking blocks, but even then, they can not prove it in court.Do you have mechanisms to make this more difficult? "

Another recalled the basics of the blockchain: "Why should we trust a centralized authority?" The main virtue of distributed registries is the avoidance of centralized authorities: central control point = unreliable. "

To these and other topics, AWS's response was that "customers who rely on QLDB trust that AWS is faithfully performing their SQL statements to update current and historical views of their data, but once journal registrations are published. , can not be changed even by AWS without detection. "

Pathak added that QLDB is designed for use cases where a reliable authority is recognized by all participants and centralization is not a problem.

"What QLDB provides is that you will be able to verify that the ledger has not been modified or bifurcated, otherwise you will be able to detect it," he explained.

Another issue is the feasibility of systems that allow users to use blockchain without executing nodes, making the process radically simpler but opening a single point of failure because there is a centralized hardware vendor. Public event blockchains address this problem, such as ethereum, in which a service called Infura manages a significant portion of transactions.

Pathak states that Amazon strives to ensure the resilience of its services and "invests a lot of resources to ensure that the system remains available in case of different failures".

Another way to solve this problem for blockchain projects is to include non-hosted nodes at AWS, said Pathak, suggesting that, eventually, some decentralization may still be needed.

Credit image: Kristi Blokhin / Shutterstock.com

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