Blockchain 101 & Azure Blockchain as a Service

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Session: Blockchain 101 & Azure Blockchain as a Service

Speakers: David Burela and Chris Zhong

Track: Cloud

Blockchain has a lot of attention in the industry at the moment and this session at MS Ignite was all about fueling that buzz. The bulk of the session was spent introducing and explaining some of the wider uses of blockchain technologies (i.e. it’s not just for cryptocurrencies like Bitcoin) and exploring the potential it has to impact and disrupt a range of industries.

David highlighted several advantages of blockchain platforms but the key features for me were the following three:

Elimination of intermediaries

A blockchain platform can take the place of third party arbiters that are traditionally needed when untrusted parties want to enter into a transaction. The obvious example of this is online markets like ebay organising and mediating purchases. Blockchain with smart contracts can become that third party arbiter with secure peer to peer transactions.

Shared/trustless control of data (blockchain) and transactions (smart contracts)

When multiple parties rely on shared data there are usually two ways to manage it: entrust a single party to control a single data store, or distribute, duplicate and synchronise data across multiple data stores. If there isn’t enough trust between parties for the single store option then duplication happens, with all of the overheads and risks that come with it. Blockchain provides another option, where the data is distributed but not duplicated, equalising trust and control amongst all parties.

Security through transparent historical data integrity

The blockchain is a distributed ledger, effectively a read/write-once database. All transactions are immutable and transparent so there is always a complete history of the data, cryptographically authenticated. This data is distributed across every node in the blockchain network and each update block is verified as a node receives it. So an attack on the data would, in theory, need to simultaneously hit every node at once and make identical modifications to be successful (this might be an oversimplification but it demonstrates the principle). This is greatly more secure than traditional data stores with a single source of truth.

The core message of David’s presentation was that blockchain isn’t just cryptocurrency, it has myriad possibilities in wider applications. The technology that enabled this expansion into a wide range of uses was the introduction of smart contracts in “Blockchain 2.0”. Prior to that, blockchain on its own was limited to essentially static data and could be used for things like proof of ownership and attestation of data at a point in time. The introduction of smart contracts enables business logic to be built into the blockchain, providing the security, integrity and transparency of the blockchain to the actual business logic itself.

David presented an impressive hypothetical scenario joining a large ecosystem of processes, products and transactions enabled through blockchain technology, which included:

  • tracing product manufacturing back to exploited workers (like Project Manifest)
  • a retirement village crowdfunding group ownership of a self-driving car
  • decentralised ride sharing (like Swarm City)
  • one-shot insurance (e.g. covering a single car trip)
  • decentralised music purchase and streaming (like Ujo Music)
  • micro-lending to a third-world software startup
  • decentralised identity authentication (like uPort)

All of these functions executed on decentralised and peer to peer platforms through blockchain. It was an impressive vision of the possibilities and from my own reaction and discussions with others I can say that David achieved his goal of getting people excited about the broad potential of the technology.

The session was closed out with Chris Zong talking about some specifics of Microsoft’s Blockchain as a Service platform and architecture. She emphasised that Microsoft’s offering is not a new blockchain stack in itself, but rather an architecture for the existing ecosystem with support for most of the big players like Ethereum, Corda, Hyperledger and others.

Microsoft’s feature set contained a lot of the standard Azure architecture offerings; it can run as either Platform as a Service or Infrastructure as a Service, manages identity with Azure AD, supports querying and reporting with Power BI and has Azure’s usual security and monitoring features. But the most interesting addition to the platform is Microsoft’s Cryptlets middleware. Cryptlets are essentially Microsoft’s version of blockchain oracles, that provide compute resources external to the blockchain but integrated into smart contracts. Microsoft intends for Cryptlets to provide improved standardisation, security and trust over oracles and looks like a key differentiator in their blockchain offerings.

Blockchain is the runaway hype train in software at the moment and Microsoft are clearly keen to shovel more coal into that engine. After this session I’ll admit that I’ve jumped aboard and am excited to see where it takes us.

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