Orbs Update June 2019

Nate Simantov
Nate Simantov

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2 years ago

blog

In this update: ⁂ NEW: Roadmap! ⁂ Orbs goes to India ⁂ NY Blockchain Week ⁂ 1st Hackathon ⁂ NEW: Validator monitoring tool ⁂ Co-founders AMA ⁂ WEF Membership ⁂ Ministry of Finance ⁂ IEEE Conference ⁂ Block TV Interview ⁂ Techstars Demo Day ⁂ Events

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Welcome back to our monthly recap everyone!  Perhaps it's because so much has been happening this past month, but it feels as though it started a long time ago. Fortunately, this is exactly why I love posting these updates; refreshing our memory and keeping the whole community of Orbs participants in the loop with what is going on with the Orbs project.

Thank you Gili, Danny, Jonathan, Netta, Eran, Ori, Andrey and Assaf for helping put together this recap!

Let’s dive right into it? First things first:

NY Blockchain Week

This segment was contributed by Gili Ovadia

ConsensUs

As we did last year, Orbs core team attended the annual global gathering of the cryptocurrency and blockchain technology world. Since 2015, Consensus has attracted every major company, developer, founder, and participant in the industry to engage in an annual discussion about the future of the industry.  Orbs was among the sponsors of the event and operated a very busy pavilion throughout the conference days.

Ethereal

Ethereal Summit took place in New York City on May 10th-11th, championing those building the infrastructure and applications driving blockchain tech, all around Ethereum. Orbs representatives attended several high-caliber meetings during these jam-packed two days.

Atomic Swap

This satellite event was attended by some of the most interesting stakeholders of the industry. Orbs Co-founder Tal Kol gave a talk on stage as part of a fascinating panel on the topic of ‘The Idealists' Dilemma: Building Sustainable Decentralized Protocols’.

The network effects of shared ledgers require broad buy-in and trust, which in turn requires true decentralization and shared governance. But building these systems requires capital investment and, according to existing models, the expectation of future revenues.

The panel explored how blockchain projects fund development in a sustainable way, and how those paths can possibly lead to true decentralization and community control. This panel brings together leaders who have grappled with these questions and come to different answers. Moderator: Matteo Leibowitz (The Block). Panelists include Jake Yocom-Piatt (Decred), Alexander Zaidelson (Beam), Ryan Taylor (Dash), and Tal Kol (Orbs).

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In summary

Some conclusions from Orbs’ crazy busy week in NY:

Those we’ve spoken to with seem to realize Orbs is uniquely positioned and could be a leading project.

Use cases remain a significant challenge; there is a clear need to prove 2-3 use cases and pursue them as much as possible. Fortunately, we believe we have a solid understanding of who those winners will be.

On the tech level, the all-hybrid concept of Orbs PoS over Ethereum was received really well and left a very good impression with the enterprises we’ve talked to.

Orbs’ Identity model was very helpful in having concrete discussions while generating a lot of interest; it appears to be a good way to onboard enterprise partners.

In terms of market maturity, an increasing number of enterprises are past the exploration phase and are actively doing PoCs for blockchain related projects (if not already beyond that point).

Private vs public arguments were a huge success, and it felt like we are able to really convince with our position of the need for an external 3rd party to generate guarantees and trust. It appears as though the industry is beginning to understand that private blockchain is not a sustainable solution, which seems to indicate another important step in the majority of the market.

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Around the World

This segment was contributed by Gili Ovadia

Techstars Demo Day & CIO Summit

In last month's update, we mentioned Orbs was chosen as a technical partner for the exclusive blockchain program run by Techstars and Alchemist. The crown jewel of that program was the Demo Day during which all the top players of the American blockchain space gathered together to witness the projects pitched.

Orbs played an important role in the mentoring practice of the program, consulting each and every project in a 1:1 meeting and shared general overviews on various topics such as governance and PoS.

At the D-Day, Orbs’ logo was on the main stage and mentioned several times throughout as the technical partner of this program. We are proud to have been part of this luxurious program and remain in contact with some of the project’s graduates regarding potential collaboration based on Orbs’ technology.

Cryptochicks

Danny Brown-Wolf spoke at the CryptoChicks Blockchain & AI Conference & Hack•A•Thon in Toronto with Vitalik, Vlad, and other real and honorary Crypto Chicks. The topic of the talk was ‘Proof of Stake Architecture’, but Danny decided to take it to a less obvious place, and discuss all the PROBLEMS of different PoS designs, and what to consider when analyzing governance and economics of PoS networks.

Masters of the Crypto Universe panel

Silicon Valley Blockchain meetup moderated by Marco Santori aka ‘Father of the SAFT Agreement’; President of Blockchain.com and Managing Partner at Blockchain Ventures, and Tony Perkins, Founder & Editor at Cryptonite.

I gave a 20 min talk about Orbs in front of an audience of about 100 people composed of developers, enterprises, blockchain fans, and other projects.

Orbs’ goes to India!

This segment was contributed by Jonathan Noam

India, a leading global source of software innovation, houses some of the world's top blockchain teams. Many of the largest System Integrators responsible for the software running some of the largest enterprises are managed from India. The country’s technology industry views blockchain as part of the future of corporate IS, and they have founded blockchain centers-of-excellence with teams of business experts and developers in India. So naturally, we felt it was vital to hear what local experts think about corporate use cases and the current infrastructure. I spoke to them about Orbs’ technology and its advantages to hear a fresh take on its potential value for their customers.

During mid-May, some of the leading global system integrators had the opportunity to see the Orbs technology firsthand. We met with local teams that already delivered hundreds of blockchain-based PoCs and tens of production/trial projects. We then presented to SIs (spread across the country from New Delhi to Mumbai, Hyderabad and Bengaluru and all the way south to Kochi in Kerala) the Orbs PoS ecosystem and held in-depth discussions regarding the addition of permissionless validators to improve the overall security of the networks without exposing private data.

We also discussed the shortfalls of the current blockchain infrastructure they are relying on, and how Orbs - as a 3rd generation blockchain - can help them overcome these limitations even in a completely permissioned environment, in addition to the value created by allowing the gradual, controlled move towards permissionless networks when the need arrives.

IEEE International Conference in Seoul

This segment was contributed by Dr. Ori Rottenstreich

On May 14th, I spoke at the First International Conference on Blockchain and Cryptocurrency organized by the IEEE organization gathered in Seoul, Korea.

Participants included faculty members and students from universities such as the University of Illinois at Urbana-Champaign, University of Massachusetts, Singapore University of Technology & Design and KAIST, Republic of Korea. Participating industrial companies and research labs included IBM USA, IBM India, and Theta Labs, Inc.

At the conference, I presented a paper on 'Enforcing Fairness in Blockchain Transaction Ordering'. This work further strengthens fairness aspects in the way transactions are selected to be included in blocks as first suggested in Orbs' Helix paper from last year.

In particular, in the new work we suggest three novel mechanisms to reach that goal:

  • An accurate block validation process among committee members. We show that a joint decision of the committee can be more accurate than a conclusion based on the independent votes of each member
  • A new reputation system to encourage nodes to honestly follow the protocol upon proposing blocks or in voting as committee members regarding the fairness of other blocks
  • A technique based on Bloom filter and Merkle trees that enables nodes to concisely declare on the set of pending transactions they are aware of  for reducing transaction censorship

I invite you to read the full ICBC paper.

Other Happenings

Netta Korin contributed to this segment

Orbs Hackathon!

After some ado, Orbs’ core team decided to split into teams and conduct what will hopefully be the first of many Orbs hackathons. The teams basically locked themselves in for 48 hours, emerging with the first real-use apps on the network. The goal of the exercise was threefold: Create useful apps, put the network to the practical, real-world test, and learn lessons on how to approve its usability and functionality.

The event was fun, coming to its final conclusion with lighthearted presentations in front of a panel of judges and a few rounds of beer.

Learn about the 4 apps developed during the 2-day hackathon in Sergey’s recap: https://www.orbs.com/insights-into-orbs-rd-hackathon/

Orbs joins WEF

[Nate embed logo, tweet]

Orbs has become a member at the Centre for the Fourth Industrial Revolution at the World Economic Forum.  I am particularly pleased to announce that we were the first startup from Israel to be chosen for this honor!

My work at Orbs involves using our blockchain technology to create social impact.  For this purpose, we created the Hexa Foundation.  Our projects at the Foundation seek to solve some of our region’s most pressing issues, using blockchain as a tool.  We are very excited to be working with the WEF, and together make progress towards making the world a better place one block at a time.

Meeting with IL Ministry of Finance

As part of our effort to enable a healthier global blockchain ecosystem, Hexa Foundation focuses on three goals: Education, research [nate embed the page for research pieces please] and special projects.

This month, as part of our effort to educate regulators,  we lead a professional meeting with Israel’s Ministry of Finance to explore and demonstrate the value of blockchain.  Along with my co-workers at Orbs - Andrey Dulkin, Ilan Sterk, Shiran Hodeda & Ran Hammer, we delved into the basics of blockchain and also discussed potential real-world uses and benefits of the technology to state representatives.  We have held multiple seminars in the past for various government offices, and we look forward to continuing working with the state as educators while this technology gains better understanding and traction.

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Mayor of Seoul’s visit to TLV

On May 6th, Orbs and our partner Yozma Fund had the privilege of hosting the Honorable Mayor of Seoul and his delegation in Tel Aviv for a special lunch, attended by high caliber members of the Israeli entrepreneurial tech scene (and some 20 journalists). The event consisted of several VIP guests who were asked to advise the Mayor on how to turn Seoul into a start-up hub and input on how to launch a $2 billion Seoul Innovation Fund.

Orbs’ Co-founders Netta Korin and Uriel Peled gave short speeches welcoming the diplomats in praise of ongoing partnerships between members of the tech and business sectors on both sides of the continent. Some notable names from the gathering include Yigal Erlich, aka ‘founding father of Israeli VC’, renowned inventor Dov Moran, and Saul Singer, co-author of NYT bestseller Start-up Nation.

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Orbs was honored to guide Mr. Park during his educational visit of Israel's local technology startup scene and we were pleased to discuss the potential for the collaborative launch of an entrepreneurial hub, aimed at accelerating cooperation between the two countries’ industries.  We look forward to doing great things together in Seoul!

Northeastern MBA visit

Orbs hosted a visit by MBA and Masters students of International Management students of the D'Amore-McKim School of Business at Northeastern University.

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The visit was a part of an International Field Study course in Israel, during which the students toured Israel and met leading companies within the Israeli tech and startup ecosystem.

Orbs' co-founder Tal Kol met the students and engaged in a long and open discussion. Tal shared his experience as a veteran of IDF’s 8200 unit and described how he thinks his military service contributed to his achievements in the high-tech sector. Tal also explained to the students the fundamentals of blockchain technology and Orbs' unique approach to designing a blockchain infrastructure.

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AMA with Tal & Uriel

After community demands requests for another Q&A session with the co-founders, I set up another AMA (Ask Me Anything) with Tal Kol and Uriel Peled. The questions were submitted via Orbs Community on Discourse and the Korean language Orbs Telegram group over the course of a week and answered on camera in Orbs’ HQ in Tel Aviv.

Check it out:

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NEW: Roadmap!

https://www.orbs.com/technology/roadmap/

Another exciting update is the Orbs technology roadmap for the next year or so which was published last week. This should give everyone a glimpse as to how the Orbs core team envisions further development of the project following the mainnet launch we celebrated 2 months ago.

We’ll go over the roadmap in detail in the next R&D post but as you can see, it is focusing on three main aspects: Development of tangible business use cases on top of Orbs, improvement of developer experience to help app developers build great things on the platform, and maturing the production environment and protocol to meet the needs of these apps in production.

Stay tuned for an upcoming post which will dive deeper!

In case you’ve missed it

Top Orbs’ blog posts from May:

Media highlights

Block TV interview

During NY Blockchain Week, Yael Lavie of Block TV conducted an interview with Orbs’ Technical Co-founder Tal Kol on the topic of guarantees by means of public blockchain infrastructure.

Block TV is the premier televised news source for the blockchain and cryptocurrency community, you can catch the full interview right here [8 minutes].

CryptoWeekly Podcast

CryptoWeekly posted a poll asking fans to vote on which blockchain project they should investigate in an upcoming episode.

<**Embed tweet:** https://twitter.com/crypto_beak/status/1122182688125984768 >

After beating EOS by just a few votes (Thanks, community), the hosts conducted a 1+1 call with Tal to find out what the project’s vision and goals are.

https://www.youtube.com/watch?v=dtjQbOUffIc <EMBED Video>

Check out CryptoWeekly’s full Orbs Deep Dive episode, it's fun: Soundcloud link. Despite the hosts’ friendly warning that their brand is to rip on projects, the review was a positive one!

Other expansion highlights

This segment was contributed by Assaf Bielski

In the past month, there has been a lot of activity around two propositions we touched upon in the previous update: Digital identity and document notarization.

First, we have completed the first step of scoping for our digital identity proposition (see blog post).  Orbs is preparing for an Identity Week in London, where we will participate in several events, present the identity concept and discuss its potential implementations with various companies, from identity startups to banks and telcos.

During the London trip, we will also plan to meet several system integrators that expressed interest in using Orbs, educate them on the platform and explore potential use cases.

The document notarization SDK is nearing completion of its design, and work will begin this month on a reference product that will demonstrate its capabilities while starting to get the word out for potential users.

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Korea Highlights

This segment was contributed by Gili Ovadia

Fn Idoedu Group

Orbs was selected to be part of Fn Idoedu Group, a company specializing in online education and software consulting selected by the Korean Government as the de facto educational org for blockchain engineers (Our Korean fans can see the announcement here).

Some background: Fn Innoedu Group has been selected by Korea’s Ministry of Science, Technology, Information and Communication and the Information and Communication Planning and Evaluation Agency (IITP) as the education agency to head the ‘2019 Innovative Youth Talent Growth Concentration Project.’

The project is a nation-led talent fostering project aimed at nurturing industry-tailored professionals through project implementation and practical training in eight leading sectors including blockchain which will be central to the fourth industrial revolution.

The project is expected to be led by a consortium of more than 100 partners, as well as global companies which include Orbs from Israel, TrustVerse from Singapore, and Eleven01 from India.

Korea Guardians & Community

About half of the Orbs network’s guardians are now managed by Korean teams! We believe it's crucial for a blockchain community to have a strong community of participants in Korea, which is by all accounts the hottest country for the industry right now.

Orbs’ Korea community has grown quite big, since its early days, counting over 2K community members in the Kakao group, while Telegram has more than 2.2K members!

Join the fun if you have not already:

Telegram: https://t.me/orbskorea\_official

Kakao: https://open.kakao.com/o/gHDCsvU (Password : orbs)

Orbs PoS-Delegator tool:

One of the Orbs Network’s Guardians from Korea recently released a neat tool for the PoS ecosystem: It sounds an alarm when every election is completed, while also verifying delegator reward by registering to the delegator staking Ethereum address. Add the @ORBS_Delegator_bot on Telegram and try it out!

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Tech highlights

State of the Ecosystem

There are 17 active Guardians currently registered and 14 Validators running in production. There are now over 1300 Delegators participating in the Orbs PoS ecosystem. Up until now, there were 18 election rounds and no Validators have been voted out by the Guardians.

In June we are going to publish 2 important posts -

  1. “Guardian responsibilities” - in this post we will describe what is expected of a Guardian, both in their technical capacity of monitoring the Validators and in their community capacity in organizing and educating the Delegators
  2. “Rewards distribution process” - in this much-awaited post we will describe the upcoming rewards calculation and distribution process

Stratx introduces a new Orbs Validator monitoring tool!

This segment was contributed by Andrew McFarlane and Mike Song

Stratx Consulting Inc. is currently an elected Validator and has recently become a listed Guardian in the Orbs Universe. Stratx is building an active monitoring tool for the benefit of all Validators in the Orbs universe. The tool is available here: https://github.com/orbs-network/orbs-node-monitor.

The tool will allow Validators to monitor their performance and health. The goal is to empower all Validators with an intuitive dashboard for inspecting the status of their node and the overall Orbs network. Stratx believes that by sharing this tool, more members of the community can collaborate to include features valued by Orbs Universe participants.

Stratx looks forward to applying its technical experience to continue to support and collaborate with the Orbs community going forward.

Learn more about Stratx.

R&D

Among other updates this month, in the upcoming days Eran and the R&D team are going to publish a post titled “Rewards distribution process”. In this much-awaited post, they will describe the upcoming rewards calculation and distribution process.

Stay tuned!

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Upcoming events

Some of the events the Orbs team will have a presence at in June:

CFO Forum Orbs HQ, Tel Aviv June 6

TechXLR8 London, June 12-13

Identity Week London, June 11-13 June

World Economic Forum meetup in San Francisco 13/06/2019

Bynet Expo 2019 Tel Aviv, June 19

Asia Blockchain Summit Taipei City, July 2-3

Blockchain Central Astana, June 27-28

If you’re going to be in town and want to schedule a meeting with an Orbs representative, send a message us at hello@orbs.com. Come say hi!

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That’s all from me today, be sure to follow our regular channels for a constant stream of updates, and join the Orbs Community if you want to get more involved and/or reach out to someone who is. Also, stay tuned for R&D updates and news which will be coming out next week.

Ciao!

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Defining the Public Blockchain

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The blockchain industry makes heavy use of buzzwords. Terms like "public" and "private" are thrown around but what do they actually mean? Is this the right way to define a blockchain? Does a private blockchain really exist? Maybe we should even take one step back and ask - what is a blockchain, actually?

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The need for concrete definitions

How do you define blockchain?

This sounds like a funny question, but try asking it 10 different industry experts and you will probably get 10 different answers. Is there even one correct answer? Maybe the better question should be "what does blockchain mean for you?"

It is important for anyone working in this industry to attempt to answer this question for themselves. The hard part of defining buzzwords is avoiding the temptation to rely on a different set of buzzwords for the task. A good definition needs to be razor sharp. It needs to make things easily distinguishable. Anyone should be able to take your definition and easily distinguish whether something in question falls under the definition or not.

The dry technical definition of blockchain

When writing the Orbs position paper, I originally used a very dry and technical definition - "blockchain is the technology of decentralized consensus". Each of these terms can be defined separately. Decentralized systems are those who are not controlled by any single entity. Consensus is the process of several independent entities reaching a shared view of reality. The actual definitions were a bit longer, and one can refer to the original text for the specifics.

But there is a problem with this definition. The problem is that it does not cover the public aspects of blockchain. What is a public blockchain? Is there such a thing as a private blockchain? Many companies are building private blockchains, so naturally this concept exists.

To dig into these questions we should be asking ourselves something slightly different. What is the value in blockchain? What does this technology add to the world? What innovation can be accomplished with this technology that previously did not exist?

So, what is the value in blockchain?

We should be careful though not to be confused with the value of specific applications of blockchain. So far, the killer app of blockchain is digital assets - cryptocurrencies like Bitcoin that aren't controlled by a centralized bank. It is easy to see the value in those. But this is not what we're asking. We're not asking about specific applications - we're asking something deeper about the nature of this technology as a whole.

This is another question that is difficult to give a razor sharp answer to. People usually say things like collaboration - blockchain allows different entities to work together on solving a problem. They use terms like trustlessness - these different entities are not required to and probably shouldn't trust each other.

I'm not satisfied with these answers because they are still not concrete enough.

Blockchain provides guarantees

From my perspective, blockchain begins with the subject of multi-player systems. A system provides a solution for some business need. A multi-player system is one that is used by multiple different and independent entities. This is a very broad field since almost every interesting system in the world has several different users.

Let's take advertising as an example. An advertising system takes an advertiser, looking to promote something, and sets them up with a publisher, looking to rent real estate they own, where end-users will be exposed to said promotion. This system for example has three archetypes of independent entities, each composed of many different individuals.

Blockchain takes a multi-player system and provides a set of guarantees to the players in this system.

Exploring systems for multiple players

Before diving into the specifics of which guarantees are provided, we should point out that these multi-player systems are almost never operated by all players equally. Let's explore this observation first.

For a system to work, it needs to be operated by someone. There could be a single operator or there could be multiple. Going back to our advertising example, a popular real-world example is Google AdWords (now Google Ads). It serves multiple entities but is operated by a single entity - Google Ltd.

The fact that we can have more than one operator isn't yet the main innovation. The field of distributed systems is not new and has been in existence for several decades at least. The Internet, for example, is a communication system that is not operated by a single operator and was invented well before blockchain.

Almost every practical system would not be operated by all players equally. There could be many reasons why. For one, this would be terribly inefficient. The overhead cost of operation is usually proportional to the number of operators, so increasing it indefinitely is less than desirable. A different reason could simply be timing. Not every player starts using the system at the same time, so naturally the system had to operate before some of the newer players joined in. A different reason could be lack of interest. Operating the system requires effort that not all players are willing to spend.

If not all players are operating the system equally, let's divide the players into two groups. Please forgive this coarse separation, we're doing so for simplicity of the argument. The first group, which usually is the smaller one, we'll call the group of "full" operators. This may not even be a group, it could be an individual. The second group will be everybody else.

Back to the guarantees

Blockchain technology provides every member of the group of non-operators with a set of guarantees. These guarantees would probably be articulated differently by different people, but I observe three distinct ones:

  1. Auditability The rules of how the system operates, often called "the protocol", must be known to every member of the group of non-operators. Every member is able at will to examine the output of the system and audit by themselves that these rules have been followed.
  2. Forkability If a member of the group of non-operators is unhappy with how the system is operated, they can fork the system at any time. Forking the system means they can operate a new copy of the system that is identical to the original in any way up to the point of the fork. This means that all data and code required to operate the system are guaranteed to be available.
  3. Governance Governance is the process by which decisions that change the rules of the system are made. Governance must be declared, meaning all players are shown the process by which rules can change. Governance is also enforced, meaning the mechanics of how rules change is guaranteed to work as declared.

I could have listed these guarantees without splitting players to operators and non-operators. These guarantees are naturally provided to every member of the operator group as well. The reason I have chosen to emphasize the group of non-operators is because this is where the innovation lies.

Systems that could have provided these guarantees to operators only are not particularly new and have existed before blockchain. The true innovation in blockchain is the ability to provide these guarantees to players that are (often willingly) outside the operator group.

How exactly blockchain provides these guarantees is outside the scope of this post, but will be focused on in a later post.

The value in these guarantees

A multi-player system does not have to provide any guarantees about anything. Let's take our example of Google AdWords. Since Google Ltd. is the only operator, all players (advertisers, publishers and end-users) are members of the non-operator group. They are not able to audit the rules of how the system operates (for example, highest bid wins). They could not become operators. They could not fork the system because its code is proprietary and its database secret. Governance is not declared outside Google Ltd. being able to change any of the rules at any given time.

Every interesting system in the world serves multiple players. Practically none of these systems today provide any of these guarantees. These guarantees are simply not a necessity of life. The world can work just fine without them.

But, and here comes the big but - systems that will provide their users with these guarantees have an advantage over those that don't. Providing these guarantees makes systems more competitive. All systems essentially compete over the group of non-operators - as they are considered the users of the system. With all other things being equal, users will always prefer to receive these guarantees than not receiving them.

Providing these guarantees does not come cheaply. This is why not every multi-player system in the world should run over blockchain. But as blockchain technology advances and becomes more efficient, this cost is lowered and more systems come to benefit from it.

How these guarantees make systems better

In a sense, the most important guarantee of the three is the second - the ability to fork. This guarantee represents beyond all others why giving these guarantees pushes us to design better systems.

If a system gives its users the freedom to leave at any time, yet these users choose to stay and the system remains popular, this system must be doing something right. Forkability provides a healthy environment of checks and balances. It allows systems to constantly evolve to their best possible form by enabling the right to exit.

As a developer, I see this behavior in action every day in the world of open source. Open source libraries encourage forks. Anyone can take TensorFlow, a leading framework for AI published by Google, and create their own improved fork. All the code is out there. The community would jump on that improved fork and use it instead if it proved to be more effective. The fact that the popular fork is still TensorFlow by Google shows that it is doing something right.

Public and private blockchains

And this brings us back to the debate of private and public. Personally, I don't like the terms "public" and "private" because they are confusing. Is something public just because it is connected to the Internet? Is something private just because it isn't?

The word public in the context of blockchain has a more profound meaning. The way I see public blockchain is by how the three guarantees are provided. Take forkability for example. I'm not familiar with a way to provide the group of non-operators with this guarantee without relying on external validators.

For me, the fact that these validators are external to the system and aren't part of the operator group is the real underlying meaning behind the word public. The public part has more to do with the validators being public than the system itself.

So, if we refrain from adding the terms public and private, we are left with simply blockchain.

So what is a blockchain? We've circled back to our original question.

Blockchain is a technology that can provide systems with all three guarantees. Simple. If it is able to provide these guarantees, it is a blockchain. If it is unable to provide these guarantees, it isn't.

Can blockchain provide value to a closed system?

Let's take a theoretical system for example, I'll use an extreme one to make a point.

Consider a country that by law has divided its cellular broadband frequencies between 5 mobile providers. This is legally a closed system, as there won't be any more than these 5 companies participating. Since they are sharing bandwidth, these companies use a system to avoid collisions in frequency allocation. Only 4 companies desire to be system operators. The fifth company prefers not to be an operator but still uses the system.

Can blockchain provide such a closed system with value?

According to the definition above, the answer is yes. Since the fifth company is a member of the non-operator group, there is value in providing it with guarantees that would otherwise be given to operators only. These guarantees could not be provided without the innovation in blockchain.

Does the public essence of blockchain interfere with this system being closed? No. This system can remain closed, simply for lack of interest to anyone else, and still enjoy the value.

We need to be careful with closed systems though. It is too easy to miss out on the core value of blockchain in this scenario. It is easy to design a system that provides no hard guarantees. For example, relying on consensus algorithms like Raft that aren't Byzantine fault tolerant. By definition - the inability to deal with Byzantine behavior undermines the guarantees we've been talking about. When this is the case and a system cannot deal with Byzantine behavior, we should not only avoid calling it private blockchain, we should avoid calling it blockchain at all.

Conclusion

So what is a blockchain - a technology that can provide multi-player systems with guarantees of auditability, forkability and governance.

How do we cope with the public/private debate? We move past the limitations of this overly simple rhetoric and focus on a given use case. Is there value in providing these guarantees under this use case? If so, using blockchain for this use case makes sense.

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