Big Data - Under the Hood

Blockchain for Compliance? Not So Fast.

By Tim Panagos

At Microshare, we make use of some of the core cryptographic capabilities developed for blockchain implementations without the peer-to-peer distribution elements that make blockchain solutions both hard to scale (try millions of transactions per hour on bitcoin blockchain) and uncomfortable for use-cases where privacy of the underlying data matters.

Most blockchain implementations utilize a merkle root algorithm to include both the content of the transaction and the lineage of the blocks (group of unrelated transactions) that precede and coincide with it. Merkle tree algorithms are powerful but also slow and expensive computationally. While the approach ensures the integrity of the block (of transactions), it is overkill for managing the single transaction. The overkill factor is one of the reasons that blockchain technology will struggle to achieve an IoT scale within the next decade.

The current transaction capacity for the bitcoin blockchain, by far the most supported public blockchain, is rated to 2 transactions per second. Compare that with the current IoT data flood which easily reaches millions of transactions per hour for common IoT use-cases such as an instrumented neighborhood, commercial office building, or transportation hub. A merkle root computation coupled with the network latency of a peer-to-peer database architecture will just not get there soon.

To achieve chain-of-custody certitude, Microshare™ uses cryptographic hashes to create unique identifiers, similar to the hashes used to secure blockchain transactions. We do not need to validate both the content of the transaction AND the surround transactions because we do not have the distributed block to worry about. Instead the “finger print” of the transaction is combined with the “finger prints” of its origins are combined into a strong key that can prove the integrity of that specific transaction. This approach is much more efficient computationally but still achieves the strongest level of chain of custody proof in the industry. We have already scaled to IoT implementation featuring millions of transactions per hour with room to spare in multi-tenant, multi-party use cases.

Naturally to achieve this scale at speed, our data aggregation approach works differently. Rather than share all data with all network participants as with distributed blockchains, we store data centrally and make controlled sharing of centralized data assets possible through APIs which enforce enterprise policies at cloud speed and scale. The benefit of the approach is that data is easily sharable but not shared by default as with blockchain databases. The data can be seen by customers, partners, or remote lines of business following encoded data governance policies that can change with the evolving business needs of a company or privacy stance of an individual. Naturally, all parties need to trust the central holder of the data (as you do with Dropbox, Salesforce, or Google). With microshare, many of our deployments are run by trusted parties such as telecom carriers to offer these services to their customers directly, we build on the decades of established trust that these companies have earned with their customers.

Finally, because transaction management continues to be private (though conditionally shareable), more conservative technology adopters can begin to exploit the value of IoT in helping to orchestrate their supply-chain ecosystems with assurance that a) professionals are continuously working to ensure security and b) proven enterprise and cloud technologies are assuring scalability and reliability of their deployments.

By using key technologies from blockchain in these less intimidating ways, we believe that we are providing an adoption path that can safely lead people from their “traditional perimeter’ mindsets to a future where peer-to-peer technologies are the norm. Along that path, you have professionals with decades of experience in enterprise systems on your team to manage the risks of that journey without sacrificing the vision of the business.

Tim Panagos is the Chief Technology Officer at Microshare Inc.

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