Blockchain Standards & Implementation Factors

Transcript

let's start welcome to everybody to the next cva enterprise working group webinar i would like to welcome you my name is marco piello i'm also here with dennis he's the co-chair we're both co-chair of the enterprise working group yes hello everybody nice to have you here tonight um today quickly we wanted to wrap up and tell you a little bit what we want to do what our focus is with the enterprise working group so basically we would like to push and identify success factors for enterprises that allows them to kind of implement blockchain projects and dennis is focusing on that

together with the group writing up or they're writing a book about this more or less now which will come out this year or in the next months um i'm focusing on working with university students to identify what kind of research they do in the blockchain space in the different industries and obviously we want to bring this to the cva enterprise members and the last point is we're obviously setting up events like this to bring to be together the interested parties in the enterprise working group and share with them obviously the knowledge from the universities we will also share the book and then we're also going to have some

industry specific events this year now um i would like to introduce you to timor schneider he has done his master in logistic and infrastructure mobility at the university of hamburg he also wrote his thesis there so we will hear about that i think in the meantime you know timo has moved to the industry to change that the reason because he wants to be more hands-on and you know implement and these solutions and now timo will share with us his uh research uh which he specifically did on on standards so we would like to welcome you timo and you know

the stage is yours all right yeah thank you for the opportunity um yes mauro introduced uh me um uh we met uh for uh in the previous meeting and it was a little bit about standards but i was asked to hold my and own meeting or own webinar so this pretty much is the reason why today we're talking about why or how um standards can become critical blockchain implementation factors and as maru already mentioned um um not at the university anymore um i'm working for chainsaw it's a

hamburg-based company we're pretty much in the fields of product development and consulting company so we advise um yeah the management consulting um all the way through to the product engineering from identifying yeah customer needs to potential to business potential so yeah all our products basically have something to do either with blockchain or self-sovereign identity which i will later refer to as well and also we are industry independent so from logistics and supply chain over to

mobility insurance and even regulated industries like aerospace or pharmaceuticals a wide range where you can play around so first of all we'll talk about who i am timo i'm working as a junior consultant and obviously i started at the university of hamburg technology now i'm working at chainstep and also we now present our first or we already developed our own product now called cert log which i'll later refer to as well

but um today's presentation will be mainly about standards so an overview what yeah i'll be talking about today first to find the definition what standards are um why they can be success factors and i wanted to grasp like three examples um from my thesis to a product or project where i started working at a chainstep and now like the product we developed and came come to a conclusion and then there hopefully will be time to ask questions

i hope you will have questions and be curious about the topic so first of all um before you talk about anything you need to find a definition and the same that i do for my master thesis so obviously standards are not just something you have an idea about and you write them down and that's it but there are like institutional body standardized bodies so for example you might heard about the ieee or the iso and they define standards as published documents to ensure reliability of things people use every day or the iso rather differ

defines them as a formula that describes the best way of doing something and i formulated my own um definition out of different definitions and came up with the really simple uh definition that you can keep in mind is standards improve collaboration for developing new things new things can be services products or something else but basically improve collaboration and yeah basically set standards so now the more interesting part about is why they can or how they can become success factors and well the easiest

thing would be to say well they make things easy but that's not the only thing because you can derive factors from development interaction or to make your product or services future proof but what do i mean by that well if you think about standards in development they create certainty certainty for development why is that if we think about like let's for example let's take a piece of paper and you develop something in the realm of a piece of paper well you could start with something like a square or a triangle but most people won't use that they will would use i don't

know um if you heard of dinafear but it's also a standard and it makes development for that product um easy because well it gives certainty to your development well this is a rather simple idea but it transfers to more complex things like software development or product design well and by giving certainty to development it also creates well interoperability because people can actually use things that work together because they are based on well the same standards and people use the same language or

the same idea behind it and the best thing for companies is obviously they close the gap between research and the product itself because not every company has to come up with their own solution on how to tackle something so this is probably out of the three the uh most economic reason behind it that there's less work to do and well more certainty on the interaction aspect it's it's not such a hard definition but obviously customers who are um yeah who who use your product or used to using your

product they accept it more if they know what it does or where it comes from or how it works well you obviously don't know how every product works under its hood but it gives you some sense of certainty that you know well that there is a general idea behind it and also if you think about relations between between suppliers and clients um if they speak the same language they can interact better this doesn't necessarily has to mean they all have to interact in standards but in a standardized way makes uh relations much more

suitable for each other for each party and the third aspect and probably something that's the most important in the realm of blockchain technologies i would say is it makes applications future proof but this definitely depends on how applications are used so if there will be a general blockchain standard in the future it gives everyone who's working in the realm the necessity to update or to adapt so if you think about past developments there are a lot of fragmented ideas

and a lot of hard work has to be done to bring them together to well pull in the right direction and standards help to well adjust the direction in which you want to move and by that obviously in the end they increase the competitiveness because once everyone is on board you can't hide behind the fact oh well we use something different now we don't compete with the other application because it's something totally different no because once you find the same language you compete with everybody else which will increase the competitiveness and as we all know increase the quality of products of services as well

but well that's enough of like the dry information or the dry theory behind it now i want to present you three examples and the first one no it's not a blank slide well i started with my thesis i start in a chronological order and as morrow already mentioned [Music] i wrote my master thesis about evaluating blockchain standards for localization and logistics well the real title was much longer but essentially it's the main message behind it and to give you some impression

even though there were not that many pictures to take from [Music] you get an idea so on the right side there is like the standard or the structure of the standard you don't have to see the whole structure so it didn't put in the whole picture because you don't need to know what the standard look like but what the idea behind it is so the standard i was using and which is actually the first standard for logistics that was published was from the by ta and they said look to use localization on blockchain standards you could potentially use this structure

so as you can see there are a lot of elements for a position so what would look uh what would this look like if you well actually use it in your application well i used it obviously with the address of my university or at least the institute where i wrote my master thesis that you actually created json data from it and as you can see there are different kinds of how you can actually well put your address in a json format well this is rather dry but it's necessary for standards to be like very

precise and say well you can do this and you can't do this or at least say you shouldn't do this um so on the left side it's just um sliced up image of tools i used for that but i'll talk about that on the next slide but what's really interesting was in the end well what what's the result or what were the questions that i um yeah tested the standards with well um i asked myself in the end four major questions um because it's still um an academic paper so i have to extend the knowledge and come up with

yeah well results so for the ita standard i asked is it technology agnostic and what do i mean by that well most of you know that there are a lot of blockchain technologies out there i guess the most um well-known probably are the hyperledger framework probably fabric hyperledger fabric or let's say public blockchains like ethereum and what was really striking to me was that it's actually not a generous then then but more one suited to hyperledger fabric and the funny thing is that i used ethereum to prove or to build this

prototype what the prototype was i'll show in the next picture so it's not really technology agnostic but standards for blockchains should be then or should um yeah name themselves private or public blockchain standard or something else well in the end second question this is technically feasible yes it was because workarounds are possible you just have to do assumptions for it well this is not what a standard is asking for a standard is not well make assumptions and then use this standard but it's rather use the standard so you don't have to make assumptions

in the third third question i asked was well is it incorporating existing standards for example if you are already working with well let's say let's take the enough uh dean a4 paperback well are you using already existed and accepted standards yes it's the standard is using already existing stannis and incorporates them so uh for example in germany we have the um zip code so the the first um localization you see there is basically a german standard for how to localize

your address and obviously that's pretty much easily feasible with that and in the end i asked a rather provocative question and ask well was the standard developed sustainable so is it able to evolve and was it done with experts or was it rather the first draft and i think it's something between both because if you see how many people work for the standard a lot of people gave their input but as you can see uh standardized setting or standard

setting institutes like ieee or the iso are still working on their standards so i think it's a first draft but a rather immature standard but what did i actually do just a quick quick roundup i actually used an rfid scanner send a signal to a small pc raspberry pi and then send everything to a smart contract and well store the location and in the end make it able to show it in the web front end so basically on a website um normally you would say well

on the first hand there are no standards involved but for example rfid is using extensively iso standards for identification well the method i transferred it was an iso standard network protocol so it didn't come up with my own rfid scanner or my own network protocol well the raspberry pi is a very standardized small pc think of it as a laptop without a screen and obviously also blockchains like ethereum formulating their own standards uh most commonly known the erc20 and erc 721 standards that you

use on ethereum to publish your own tokens and obviously you're not redefining web development you use standardized tools that help you to achieve goals quickly um so as a second example which i won't go into too much detail i just want to bring up the idea instead of my first project for chainstep i work with secure digital identities so the whole idea or what it was was a state-funded research project for identities and what it's basically is

[Music] it's leveraging decentralized ids or did together with verifiable credentials well you don't have to know what's behind those cryptic abbreviations but the w3c a standardized setting body that defined the standards for well internet communication is currently working on standards for decentralized ids and the ssi so self-sovereign identity behind it and the dids are basically using blockchain to um yeah well bring back anonymous or the anonymity uh back to the users of the internet

and it was fascinating to see that well this is just one use case of blockchain or distributed lecture technologies but it's it's a whole nother approach than what blockchain previously did in different industries like logistics where you try to well save your data in a secure way or well encourage trust it's now used to enable secure identities and as a conclusion i draw from that that standards actually allow great shifts and i think that in the next couple of years we will

hear a lot more about that as well and as a third example i wanted to bring up current product i'm working on and well what did we do we had a customer generally speaking laboratories or people who well actually publish certificates industry cotton well uh the weird t-shirt but you never really hear about the industry or what their problems are and well the problem yeah i already said it was the certificate handling so just to give you a quick idea of what their problem is is that laboratories

normally publish well they they analyze raw material and give you a certificate and say well that's the quality of your goods but that's that's that's the thing they can do really well but when it comes to the certificates some of them still send them out by as a pdf via email well that's obviously a digital process but it's not really mature or isn't really leveraging what is possible and is far from being automatable so today's solutions just to give you an idea

why we came up with that idea is that you could either either use pdf signatures simple to use but well still limited functionality because you're not doing anything with the data which obviously is one of the great benefits from blockchains you could either you could also use well erp systems you have all the extended workflows but for normal laboratories you don't want to implement a whole erp system just to get more functionality because well that's complex and expensive so we thought that we use a simple model kit and offer

inexpensive functionality but why why am i talking about this right now well obviously we are in the realm of blockchain and we use blockchain as a um yeah well as a part of it and what it is in the end it's a simple um platform and we didn't revolutionize the wheel with it we just used what is there and i think that's the beauty of it and that's still applicable to standards because what you see is just some screenshots and how the interface is looking but what's

important is what's behind the well behind the surface well first of all what we're doing with it is well we automate we enable the augmentation the automation of processes well you don't have to send out pdfs via mail you can just handle the actual content you're producing well the data is safe you're pretty much future proof at least to this point and you have the lien implementation but what i wanted to show with that is well we we didn't revolutionize the wheel by

just using standardized approaches and obviously we use kafka for interfaces and as i already mentioned the json data format just something really simple and basic um for the data types and obviously we use some knowledge for blockchain but didn't come up with something brand new and in the end i wanted to draw the conclusion to come to an end and give the opportunity to ask if you have some questions about it why were standards necessary for that and well they enabled us to fast-track to the development as i said we collected

knowledge by being on the one side on the one hand consultancy or a consulting company but in the other hand we are also creating products for customers [Music] and with working with standards it enables us to fast-track our development as you just saw um we use standardized approaches and didn't come up with the complex or a new idea of solving an existing problem well it secures the compatibility by using something like kafka interface together with the blockchain

you don't have to worry about is my application able to communicate with the legacy system of another company you can just plug and play it because well it's an interface you can work with and it provides riskless innovation because you can adapt to new ideas with known technology and with no knowledge and well create something new um by using things you know best and yeah well that's the end of what i wanted to present today i hope it

wasn't too dry but gave you an insight in why and how standards can be a success factor for companies either implementing or even just thinking about using something this review ledger technology like or not and obviously don't hesitate to contact us if you have further questions but i'm also happy to answer your questions or discuss with it now so yeah thank you for your intention and let's see it was very interesting uh you know i think you touched on different aspects you know more

technical aspects standard aspects but also kind of interoperability and other things which which i really liked so a few questions or maybe just also for the for the people um you know on the on the call here um just quickly tell us you know what beta means um and also uh why did you use that topic to research you know you had probably lots of different options in different industries but you know what drove you to kind of deep dive into this uh part um yeah well the by ta on beta was an um is an organization mainly based in the united states

where a whole bunch of logistic companies came together and thought like okay to leverage something or to get an idea behind a new technology they decided to put in their ideas and come up with a standard and a pretty simple idea behind it is that they were simply the first that actually wanted to publish standard and made it possible for other people to test it out so um the main idea behind it is that um

yeah you get a first idea of how a standard could look like and what are the problems and the benefits of using one and therefore we choose that as a first draft and made some insights cool have you seen a similar organization develop in europe or other parts which would potentially you know use this standard or would go with some of the others which we also expect to come and i think you know if i'm not mistaking ieee or ice or both or at least one of them working on standards well the the problem is that yeah

obviously uh companies are working with the iso otherwise uh as standard setting institutes couldn't come up with standards anyway if they wouldn't leverage well the ideal knowledge of the economy side but what i see when i look in to like both directions united states and china you can see that there are their own momentum let's say it like this that for example platforms like trade lands or gsbn trading for like the europe usa side and gsbn for the asia china side they are working on their own

like frameworks generating a lot of movement and setting their own rules so for a lot of standards there is also standards are not competition free obviously which is good because else you would just set the standard and say well that's it live with it and it wouldn't evolve so when i look into other continents especially in the realm of logistics there are own key players who take the lead and standardized are in standard and setting standards and even though they are not official standards

they help to define what's the best approach in the end standards are just helping you to find the best way as i said earlier to well interact with each other collaborate and that's the same and and at the economic scale as well that um people just have to use the same language um to interact with each other so actually you know it would be great you mentioned a couple of you know names before if we could get them so we could kind of like provide them as well to the group here um you know that would be fantastic you mentioned the the i think asian organization right as

well um i think that would be great the other thing is also i assume this global business right so i think will they connect together is this some do you see that happening that it is going to be a global business and these standards are going to evolve globally so um i really hope that the standards will be published soon so the development can take place using those standards because what we see today is that a lot of big companies are using the ability to well set standards for themselves so um for example the iso and the ieee finally is 2021 so um

they first published their first standards this year and in the upcoming year 2022 and which wasn't the case while i was writing my thesis was a longer period to wait for them but the more time [Music] will will go the less impact standards will have because people say okay well we do our own standards but once they will be published i think there will be a second well movement to actually come up with new solutions once you actually have something you can

hold to and well which especially for smaller applications um it's necessary to well have something to go along with and not do all the research on their own so i think that they will actually help and thrive the development definitely if if we want to tell those you know companies in switzerland or europe how to connect to these bodies consortiums or you know whatever who are active would you would you know a few which they could contact and get involved well um well obviously to get involved with uh

the first address uh would always be the um standard setting bodies so always the first idea the every country has its own standard setting body or at least they're working in bigger groups together and we were also approached by the german university the ebt who have their own project called av chain to creative framework which also goes into the direction of creating standard so not to dodge your question but to rather give a general answer that

i couldn't just name all the people or all the institution you could go to but rather um yeah approach either established institutions or go for local standard setting bodies if you actually want to interact with them and to leverages on the other hand there would be help there would be like bigger institutions like as i already mentioned like traditions who can actually leverage a lot more a lot faster obviously because economy always works faster than the government

or institutions like that so but on this side it's more like very industry related because they're not setting standards for the whole world but rather for their business and therefore it's very fragmented i would say you know in in your research did you find specific topics that standardization organizations were focusing now on in particular or um and if yes what would they be and the second thing is would you agree that they're focusing on the right things or did you find that

that the industries should now or this body should now focus on other standardization more urgently um well it's a good question for example the ieee is roughly working about 20 to 25 standards and they are very spread out for example dominant buzzwords would be iot so how to interact with [Music] the internet of things but also in the realm of agriculture already very regulated industries like medicine and farmer at least from the i triple e there will be um

a bunch of standards coming up and i think they will be in the right direction also there will be something for logistics or rather supply chains be prepared but unfortunately i couldn't peek into it because i'm not part of their organization and on the other hand for the iso they have a much more general approach and i think they want a much more general standard for what is actually a blockchain what is distributed ledger technology as a whole and how are smart contracts working and they're not

this like industry specific but rather focus on a whole spectrum so i would say it's always good to look on both sides sites but if you think about what will actually be applied by um well by companies worldwide i would rather say the more specific and the more directly focused the standard is the better you can adapt it to your specific industry you're in because once you know or if you know that a distributed ledger works like this

won't help you to actually solve your problems or have a detailed idea about how well how you could tackle the problem so i think um the problem the standards will be solved in both ways general and very specific i think yeah one one thing we observe in a lot of enterprise blockchain solutions or proof of concepts independent of what stage they are um is that that there's usually i mean there's a solutions have a consortium of various companies that are working

on an uh value chain that is on on the blockchain or on the distributed ledger uh network but one thing is that that we see that these consortium work always on different blockchain technologies and and and sometimes similar solutions actually work on different blockchain technologies and the biggest question is okay how do we manage interoperability uh in the future between those different blockchains have you discovered a new work already some initiatives in that direction um well i think the the main problem is um that a lot of those projects i would say started

quite early before blockchain became probably a little more mature so companies actually if they want to use a blockchain they have to actually decide pretty early on what they want to use or at least how i found it was that they pretty early on decided okay we want to use this kind maybe probably already deciding private or public blockchain and then trying to store the this way around [Music] to solve it that's a good question [Music]

on the one hand what it's especially in our product development the focus is to actually first understand the problem then come up with a strategy to solve it and then see what's the bet or what are the best tools for it i think that would probably lead to same approaches for the same problems but also on interoperability on blockchains i think it's a little early to say that this will be solved in the future but also like initiatives like polka dot are already working

on being actually something or be a blockchain for all blockchain or connecting them so i wouldn't say that in the future it would be a big problem if you're working or the company is working on different blockchain solutions because a lot of them potentially offer more benefits than other and potentially are more beneficial to use than to agree on one or two frameworks or blockchain applications that everyone can use but rather yeah develop a layer that can be laid upon your specific application that helps to generate

interpret interoperability i assume timo potentially i don't know how you think about that where most of the companies will go will be probably the network which is going to be most active right or you know to kind of allow uh interoperability or not in a blockchain space but within the within the network i don't know how you see that if there's a clear you know direction ethereum hyperledger who is going to be the monster or the best suited chain for this kind of you know processing um further even go further is it more distributed ledger technology or blockchain technology i mean

is it more free kind of stuff or is it ethereum kind of stuff right um oh that's a really big question um i don't really know if i could answer it right now but obviously companies are choosing it for a reason if a company goes for a private blockchain mainly the hyperledger which is uh yeah have has all their own projects for their own purposes they do it for a reason and i don't think that the reason will change in the future and it's uh most commonly that they use it for privacy reasons or for

like well not expose your data they're always like well zero knowledge proof yeah ideas that could actually solve the problem or um yeah there could actually also like solve it with oracles to prove that data that is inserted is correct and given extra or intrinsic motivation to work in the same direction to not well do something wrong with the data or to submit wrong data there could be set incentives but um yeah i think that

their at least if there is not and there will never be develop the um upper layer of blockchain that works above all them there will always be like a hard cut between blockchain solutions so yeah but i don't necessarily think or agree that hard cut is necessarily something that is too bad because as i said there are a bunch of different technologies and they all more or less have a purpose and intel interoperability can always be achieved by

second or third layer so [Music] yeah let's see what the future brings if they will all join on one concept or if it still be fragmented but covered up with the layer yes i have one or two other questions you want to mention to the group here if you have any questions uh please enter them uh in the q a uh we will pick them up and we can ask demo um in the meantime teamwork just two other thoughts here or two other points one is as you said you know this company will choose uh the chain for a region the network for a reason and i think probably uh it has to do as well with the integration

in their current infrastructure um you know i've come across you know some projects i did in the financial industry where you know the integration is more expensive than you know the whole installation of a service uh just blockchain based and so i wonder you know especially in the logistics and this is why i think hyperledger has probably uh in this space is probably the favorite uh chain is because they probably have from their past or they are integrating their you know systems they use in the different uh industrial silos right i don't mean the negative uh which they can integrate with hyper lecture and that probably could be one reason they stay and the other question i wanted to

ask if you have if you know anybody who has a live project that's the you know that's the usual question so so for the first answer it would be um well if using blockchain isn't solving your problem or is more expensive than not integrating it then i would question if blockchain is the right solution for it because it shouldn't make your life harder just because you use something because you think it's the right solution i think that's something um that a lot of pocs uh have shown that well it's it's maybe maybe it's not mature maybe it has

to develop in a stage where it's also suitable in a fragmented way but it's in really young technology and um well circling back to standards as long as you don't have something to hold on you have to do all the research and all the development for to actually get your application live and actually work with it and once you get it on a well life stage it's it's a long way because you can't actually or until today or up to this day not to my knowledge like really plug and play

a solution maybe with like an embedded solution or something like a private blockchain um like hyperledger um but yeah it to to not extend the answer too much i would say um always as if implementing a blockchain is the right solution it would cost more than to not do it um and on the other hand life well a lot of smile it depends on what definition of blockchain you're talking about obviously with private blockchains there are more

or less a few projects i know of um [Music] even though they are not like consistently used as let's say a simple database they're still currently used and for example also in china they're the chinese government is really um having a high pace with implementing a lot of different blockchain solutions um i haven't read into what they use or how they use it but i would definitely point in that direction because it streamlines the focus and i think that's that's one of the key reasons why

it's not that well spread around the world because it's really like unsure in what direction it would be the right in what in what direction would be the right direction um yeah and obviously we're using it as well not on a scale like you would use a database but in you definitely see that um yeah you can um use it and for example um as i mentioned before but swiftly switch to the next topic it can be seen as a technology for other ideas as

well just like decentralized identities which doesn't necessarily has to be a mainly blockchain focused idea but rather as a protocol that at a certain point uses the idea of a decentralized storage but it's not like um based around it as a whole but rather utilizes the strength and not putting too much effort to focus on it very good thanks a lot um i don't know if anybody else has any questions dennis do you have any other questions you would like to ask

i think that was a very very good uh interesting topic that you that you picked there at the university what did your professor mean well what what did he say a response from your professor about it what did he think about um well there were there were a lot of um interesting questions about blockchain in the general as as a general because the topic is rather [Music] yeah new to the institute so um but it definitely was fun and also my mentor um already yeah

like um read a lot and also wrote his own book so it was like i think for him interesting insight into how our prototype could be looking like and i hope i hope at least to see some more progress from my institute to yeah well push the topic further and probably we'll see more response when they actually come back to it with yeah well hopefully define standards that help them to yeah make more more academic research on it actually yeah you know i'm talking to

johann uh johannes there's a few other people doing some thesis right on on blockchain so which will be come back and present here as well uh you know in the next couple of months i think they're more in the construction industry right if i'm not mistaking uh teamwork probably shouldn't yes so that could be interesting too uh to get the view you know from on the different industry and deep dive how they're doing okay very good any other questions from anybody no quite a silent group tonight okay good which is which is understandable i think we are all uh totally uh corona locked down

uh video time video conference overload yeah but um okay very good timo anything you would like to add um no it was uh nice to be able to present actually have a nice discussion about it um and timo we would like to thank you uh i think that was very kind of lots of good insights very interesting discussion um thanks a lot and hope to see you back i also would like to thank nikki who has organized everything so that we can have his webinars and everybody else uh obviously a welcome to the to the next webinar

we're going to deep dive on some blockchains and adoption in some industries okay thank you everybody and a good night thank you bye-bye