My last blog was about IBM, triggered by a Juniper Research putting the company as the number one in the blockchain technology competition. One of the comments on this blog was that it looked like an IBM press release. But that is far beyond what is meant.
I just looked at what the tech company was doing in the blockchain arena and why it could be adopted as the main blockchain model when blockchain adoption could become mainstream. In a previous blog I already talked about Microsoft's CoCo platform, the number
two in the Juniper Research asking myself if that could become a game changer (see my Blog: Microsoft CoCo Framework: blockchain game changer, August 29, 2017). Today I will go into some more detail in the blockchain activities of Accenture, number three
according to the Juniper survey.
Accenture: where do they stand?
Looking at the various blockchain alliances or consortiums, of the top three in the Juniper Research, Accenture is the most broadly focused one. Being a member of both the Ethereum Enterprise Alliance and the Hyperledger Project as well as entered into alliance
with Ripple and Digital Asset. Early this year Accenture also joined the Chamber of Digital Commerce (CDC), the world’s leading blockchain trade association. The CDC, aimed to “help educate, promote and accelerate the adoption of blockchain-enabled technologies”
, is also the founder of the Smart Contracts Alliance, the Blockchain Alliance, the Global Blockchain Forum amongst others.
Compared to IBM (Hyperledger Project and Digital Asset) and Microsoft (Ethereum Enterprise Alliance and Ripple) that are more outspoken in their vision, the overall goal of Accenture is to leverage DLT innovations of all sorts to make the technology viable
for enterprise IT use.
“Accenture strives to be at the forefront of blockchain innovation and its practical, real world application. We provide our clients with a complete view of the blockchain-based technology landscape and its potential business implications. Our global
team of experts works with each client to help build smart strategies around effective use-cases, investment and implementation.” Accenture website
“Accenture is committed to supporting these efforts by leveraging our expertise across the company – from regulation to innovation – to make blockchain a reality for our clients.” David Treat, managing director of Accenture’s financial services industry
Accenture: focus on security issues
Accenture is especially focusing on security issues. These will be critical to the widespread adoption of blockchain technology. In February this year Accenture launched its new blockchain security hardware solution and recently the company has secured
a patent related to its work on Editable Blockchain technology as of late September 2017.
Blockchain Hardware solution
Last February Accenture launched its new blockchain security hardware solution. In partnership with Thales e-Security and its hardware security modules (HSMs), Accenture has developed a Hyperledger Fabric-based patent-pending solution to help blockchain
technology seamlessly integrate with industrial-grade security systems.
Accenture wants to help businesses use blockchain technologies more securely by “locking away” the encryption key they use to sign transactions. This new solution is developed to build up emerging blockchain platforms with an interface that utilizes Thales’
hardware security technology. Through a single install, Accenture’s new solution allows companies to avoid multiple interface code developments.
The hardware does little else other than generate, protect and store digital keys designed to validate and secure transactions and messages in an ultra-secure environment. The devices run digital key management processes that control data-access permission
levels within a network. The only way to access a private key kept on an HSM is by following a strict protocol, keeping all user account keys and access codes stored on them safe from hackers.
Accenture’s hardware solution creates a simple path to large-scale commercial use of blockchain technology, that has the capability for more secure transactions, will help support industries including financial services, health care and government, and protect
them from potential cyber-attacks.
“The opportunity to benefit from blockchain technology within sectors like financial services and health care depends on an ability to protect digital keys using conventional standards of security. While there have been bespoke blockchain integrations
with HSMs before, this solution offers a simpler and more flexible standard to connect blockchain platforms with the leading HSMs. We are committed to delivering these types of real-world innovations that will serve as the stepping stones to make blockchain
technology a reality for large-scale enterprises.” Accenture’s managing director and financial services blockchain lead, David Treat
Accenture recently announced that it had been awarded a patent related to its work on “Editable Blockchain” technology as of late September 2017. The idea is to create a permissioned blockchain platform that would allow parties to alter data in the event
of errors or fraud. This as a way to help move blockchain technology to come to maturity.
Accenture said that edit blockchain should be very exceptional. It would only be used in very rare and specific circumstances, and by a small number of individuals. Here we could think of a trader that accidentally causes a so-called flash crash (just for
five minutes but very serious) or mistakenly sends a larger sum to a hedge fund client.
Depending on the circumstances, under the proposed system, a “secret person” which controls the key may be assigned to one or many parties. In some other cases, multiple individuals may be assigned parts of a “secret authority” so that all of them should
sanction or approve any access or change made to the system’s ledger.
“The capability allows enterprises to resolve human errors, accommodate legal and regulatory requirements, and address mischief and other issues, while preserving key cryptographic features.” “We have had several strong industry interest and have had
several requests to open-source the capability we are considering”. “Accenture is still in the development phase, while work continues to “enhance the prototype.
We have had several strong industry interest and have had several requests to open-source the capability we are considering”. David Treat
The Editable Blockchain project however has stated criticism from a number of observers. While the function would solve the financial world’s problem of not being able to correct (human) errors, critics say that it would eliminate one of the defining characteristics
of blockchain: immutability.
The most purists believe in the immutability of blockchain technology. They question “why a distributed database would be needed if not for its tamper-resisted characteristic”. Some argue that making a blockchain editable turns it into little more than
a giant distributed database or distributed ledger. Other argues the “allowing the amendment or deletion of information or data from the ledger threatens the industry’s ability to fight irregularities with the game-changing blockchain technology”. Brian Kelly,
BKCM LLC founder and CEO
Immutability and private blockchains
The issue of immutability of blockchain may be true for public blockchains because participation in them is open to anyone. But as I said in one of my earlier blogs (Blockchain, distributed and shared ledger, permissionless and permissioned: What’s in a
name!! , April 4, 2016), a blockchain with its immutability is a distributed ledger such as Bitcoin but a distributed ledger is not (always) a blockchain. There are many varieties.
Financial institutions however do not want a public blockchain or distributed ledger where immutability is key. For them immutability is “not a sacrosanct”, other features such as security are much more important. They wish to use blockchain for well and
clearly defined purposes, whereby they do not need the anonymous, “zero-trust features” of public blockchains.
Financial institutions are creating private blockchains designed for their own closed financial communities of trusted partners, where they could decide their own protocols etc. In private blockchains trusted members may agree to the rules on how transactions
are recorded and verified. And any time a critical number of people using blockchain (typically a majority) want to review the rules, they can agree to do so.
In the context of these private blockchains, members could even vote to reverse a transaction if there was an error or some sort of dispute. This is technically a form of editing the chain, though one that involves writing a new transaction rather than
modifying an existing one. Accenture’s approach is a way to do just that i.e. to “edit and modify a block of transaction in a way that wouldn’t compromise the integrity of an entire blockchain”.
Need for safety features
The Accenture solution may be a way to reassess the financial industry that blockchain is safe to use. The need for a safety feature at financial institutions has become more pronounced since June 2016 after the DAO debacle involving Ethereum, where hackers
exploited a weakness in the Ethereum code to steal $60 million. While certain members refused to reverse the transaction and recover the money, the Ethereum community was finally able to sort out the deal.
Editable blockchain and blockchain hardware security: a marriage
Editable blockchain may be useful to financial communities who want to deploy it, but it has its limits. It may re-introduce problems ranging from maintaining and grant privileges through to vetting employees and managing digital keys. Accenture’s blockchain
hardware security could solve that issue.