At present, there are already many permissioned blockchain architectures in the industry, which are mainly designed to provide customers such as enterprises and banks to help customers develop blockchain applications. This is different from permissionless blockchains (permissionless blockchains, or public blockchains), which everyone can participate in. Their features include the ability to limit the participants of the blockchain platform and enhance the customization of corporate needs flexibility.

Bitcoin and Ethereum are well-known unlicensed public blockchains, but in the alliance chain, well-known related technologies include Hyperledger Fabric, R3's Corda, and JPMorgan's Quorum:

Hyperledger is an open source project alliance initiated by the Linux Foundation, developed through the open source community.

R3 is composed of financial banks and launched the Corda open source platform, allowing companies to share information with all parties through distributed ledger technology.

Quorum is an open source project made by JP Morgan Chase Group with reference to the Ethereum network code, and can be applied to a blockchain pilot project in the financial industry.

With the increase in the demand for enterprise introduction, many blockchains as a service (BaaS, Blockchain as a Service) have emerged, so as to meet the digital transformation needs of enterprises more quickly, including Microsoft Azure and the blockchain management launched by Amazon this year "Amazon Managed Blockchain (AMB)" provides open source frameworks such as Ethereum and Hyperledger.

Not everyone needs a blockchain

BSOS is a blockchain technology company located in Taiwan and the United States. It has tried to create its own blockchain, which is specially used in the supply chain field; but now, they have abandoned the development of the main chain and chose to adopt the current permissioned blockchain architecture, providing technical solutions and building their own products.

They choose to abandon their own blockchain development, not because the technology is unattainable, but to return to the most realistic business considerations－－they don't want to miss the business opportunities that can be achieved now:

"Being your own main chain requires a lot of resources to support, including the ecosystem, which requires someone to develop it, and someone to use it after development. It requires long-term investment." Daniel Huang, CEO of BSOS, told the dynamic area:

"So, we evaluated existing resources, and after frequent contact with the company, we found that some things can already be implemented, and the company has immediate needs."

Huang said that after researching Quorum this year, the company found that most of its architecture and features are very similar to the blockchain that the company originally hoped to develop. He added: “We don’t have to do it alone, we can cooperate with them and take advantage of Corporate resources."

So immediately this year, BSOS also became Taiwan’s R3 official technology partner in public relations and Quorum Taiwan’s technology ambassador. And this trend has gradually appeared in the applications of many technology companies and enterprises.

Blockchain makes data exchange a ‘’new gold mine’’

Huang believes that the enterprise value derived from the blockchain is nothing more than the joint maintenance of data to allow participants to generate greater benefits. Although he is unwilling to disclose the specific details of the companies that cooperate in Taiwan, Huang uses the company's application in supply chain finance as an example:

"The unsolved problem of supply chain finance in the past is that banks are used to obtaining trusted data sources through "fair third parties" to allow high-quality companies to raise funds."

For example, when SMEs have an urgent need for loans and want to apply to banks, the banks cannot obtain all the transaction records provided by the SMEs, so they seek the assistance of the joint credit investigation center. SMEs cannot improve their capital turnover. Efficiency, leading to instability of the entire supply chain.

And through the blockchain, the authenticity can be solved.

In the past, banks were unable to conduct loan evaluations because they did not trust the transaction records provided by SMEs. Today, the joint maintenance of transaction data through the entire supply chain not only solves the trust problem between borrowers and lenders, but also optimizes the accuracy of bank lending and enhances the stability of the entire supply chain.

This kind of data sharing application can be extended in other fields as well.

Huang further pointed out that, for example, in the field of health care, wearable devices designed by various manufacturers share data collected by different devices through a common ledger to achieve greater medical research benefits; or in the field of insurance Among them, auto insurance, personal insurance, etc. involve data verification before entering the claims business, etc. Such issues involving money and data trust have been pain points that companies have been caring about for many years.

The ‘’privacy’’ and ‘’controllability’’ brought by the alliance chain

Now for enterprise applications, there are two infrastructures to choose from, alliance chain and public chain.

Although the alliance chain will be questioned for not being able to achieve the value of the "blockchain open network", just like in the early 1990s, the American Online (AOL) adopted a closed network, but eventually it still can't match the trend and will open up. ; However, in view of the future mainstream trend of enterprise applications, Huang said that public chains and alliance chains are solving problems and helping technology applications land, and he will not comment on them.

Only in the process of contact with companies so far, we can clearly feel the concerns of companies about public chains:

Through observation, we found that the most important factors for companies are "privacy" and "controllability", and efficiency is not the primary consideration for companies.

First, if the "privacy" point cannot be overcome, companies will often reject the plan. Because the current public chain and the alliance chain focus on different issues, the consideration of data privacy on the public chain is not as complete as the alliance chain.

For example, Hyperledger, R3, and Quorum all emphasize the use of nodes, permission systems, consensus mechanisms, etc., to improve decentralized ledger technology (DLT) to protect corporate privacy while promoting the efficiency of data exchange.

In the technical planning of the Ethereum Enterprise Alliance (EEA), there are also similarities. They are discussing how private transactions can be exchanged for peer-to-peer value in the Ethereum consortium chain, and avoid exposing the user wallet address, past transaction records, current amount, etc. due to a transaction like the current Ethereum public chain. News.

In addition, it is difficult for companies to grasp the uncertain factors on the public chain, such as when to upgrade, when to fork, increase the handling fee, etc., and the number of nodes on the alliance chain is relatively small, and the "controllability" is relatively better than the current one. The public chain will help enterprises to further their risk management.

Huang added that it does not exclude the possibility that the public chain can provide solutions suitable for enterprises in the future, and because the public chain has more nodes, it can bring higher security.

Data records must be both private and true

The way the alliance chain provides privacy is through the application of "Private Channel". In this regard, Huang said that the above-mentioned applications can be abstractly understood as "the establishment of private groups in common communication software."

When customers use it, they can adjust the participants of the group, such as distinguishing between a group composed of a single department and a company-wide shared group; or a group formed by the company for a project and a partner.

In such a group, members can send private transactions that only "restricted participants" can view. Such private transactions can be deployment of smart contracts or interaction with smart contracts. And each node can define countless privacy groups according to their needs, similar to the concept of creating multiple groups in communication software.

This is an important design for a network where some participants may have a competitive relationship, because they do not want to be transparent about each transaction information. Therefore, the design of the private account is to help participants distinguish the information that other members can see.

In addition, the information exchanged in the group is encrypted and will not be viewed by a third party. However, because of the "tamper-proof" feature of the blockchain, when reviewing the data, if the company is willing to open the third-party viewing rights afterwards, the authenticity of the data can be guaranteed after decryption.

"These two (privacy and authenticity of data) have been difficult to solve before, that is, I want privacy, but others need to know that you are right."

But he said that this problem can currently be solved through the existing solutions of the alliance chain.

Once the privacy issue is resolved, the next step is how to technically help companies face the issues of blockchain upgrades and technological reforms.

In this regard, David Tseng, head of BSOS product, explained that the company provides middle-level technical services to help companies connect their application programming interfaces (API) with the middle-level provided by the company through traditional methods. In technological reform, there is no need to stand on the front line to face the impact of reforms, and transfer can be painless.

"We usually don't talk to corporate customers about the development of blockchain technology," Tseng added:

"It's about how to use the value of weakly centralized collaboration in applications."

What do business decision-makers think about actual cooperation?

In response to the difficulties in the implementation of blockchain applications, BSOS CEO Daniel Huang believes that the current technology is fully prepared, but first of all, most companies have insufficient knowledge of the blockchain. This includes the fact that they have not yet recognized "what can the blockchain do, What can't be done".

Furthermore, before using the alliance chain technology, there needs to be a manufacturer that convinces everyone to stand up and call on everyone to form an alliance. This is another challenge.

"Looking back now, in the past, there were no cases of jointly building platforms between enterprises. In the past, central manufacturers came out to make links." David Tseng, the product manager, added that now is the transition period of blockchain applications, and an initiator needs to lead. , Communication, and design governance rules together, he further said:

"In fact, corporate executives are very clear about the benefits of blockchain collaboration. They wanted to solve these problems long before the emergence of the blockchain, and the decision makers we met were often very different. Awareness of the blockchain (in terms of collaboration benefits), and I really want to promote it.”

Regardless of financial applications such as cross-border payment, supply chain finance, insurance blockchain, or blockchain letter certification, many financial giants have begun to take the lead in testing the water temperature of the blockchain. In other fields such as medicine, art and agriculture, many applications are gradually emerging.

In addition, with regard to Facebook coin Libra and JPMCoin planned by JPMorgan Chase, which have recently triggered important discussions, the application of these digital currencies in the financial field has allowed more people to extend their imagination of blockchain applications.

After the foundation of future data exchange is stable, will the blockchain further enable cash flow, digital currency, and token economy to follow?

"This is very exciting. After the foundation is built, I will create the imagination of cash flow." Huang said, but he also pointed out:

"But on the industry side, we still have to make progress gradually."

The application of blockchain in the future will help establish a common governance method and system architecture for data. Behind this large-scale trust machine, what will open up is a market of greater cooperation benefits.

How do companies meet the future collaboration model

Whether it is a decentralized enterprise collaboration model that has never existed before, or data sharing, token economic applications, now it has added a touch of imagination.

In addition to preparing for the great changes that may occur in the future, companies must also try to think about what advantages they can maintain and what shortcomings they expose in the era of "decentralization".

As financial industry giants express different views on blockchain applications, for example, they are more optimistic about enhancing efficiency through technology in traditional payment models. Because they know that the application of blockchain and the replacement of the overall system behind it will be accompanied by high costs.

"I think there will be pioneers, followers, and hindsighters in the market." Huang concluded:

"Now the entire market is still in the first half of the bell curve. It is normal that there will be various sounds... But there is no shortage of pioneers in the market. Every new technology emerges, there will be some people who want to try, we can only catch these partners who are willing to try to do this, and when the followers in the market want to do the same, then the market will grow."

Source: https://www.blocktempo.com/how-do-taiwanese-companies-implement-blockchains-and-why-they-choose-the-permissioned-blockchain/