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Hyperledger: as explained by Brian Behlendorf, Linux Foundation

Many commercial uses for blockchain technology will originate from the open-sourced community of Hyperledger.

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Blockchain and distributed ledger technology (or DLT, of which blockchain is one version) represents a profound technological change to financial institutions. Hyperledger has emerged as an open-sourced, non-profit governance structure to help technology companies realize blockchain applications that will eventually become commercially useful.

The Hyperledger project is overseen by its executive director, Brian Behlendorf, a prominent technologist and music nut. In addition to having invented the banner ad for websites (an act for which he jokingly apologizes) and serving as chief technology officer for the World Economic Forum, he is also an early supporter of incorporating technology with the Burning Man festival and has backed electronic music communities.

He was recently in Hong Kong promoting Hyperledger, courtesy of the Linux Foundation and InvestHK; the group has a small office in Hong Kong to encourage banks, technology companies and big corporations to sponsor its work, as well as to engage with the Chinese developer community.

The inside details and politics of Hyperledger aren’t of immediate interest to financial institutions looking to adapt blockchain technology, but the work of the organizations under its umbrella will be – this is the arena in which many advancements can be expected. “We see ourselves as plumbers, building the operating system for decentralized transaction networks,” Behlendorf said. So some background is useful.

Open versus private
The Linux Foundation was established in 2001, about ten years following the introduction of the open-sourced Linux operating system. The internet economy has always been divided among private, commercial developments (think Bill Gates’s ruthless business acumen promoting PCs) and those pushing for open, shared, universal platforms that transform the world (such as Tim Berners-Lee’s invention of the World Wide Web, or Wikipedia). [DigFin’s note: Walter Isaacson’s The Innovators is a very readable history of the internet and this tension.]

It’s how we keep IBM, HP and other companies from turning this into a zero-sum game

- Brian Behlendorf, Hyperledger

Open source has become prominent; even technology companies such as IBM and Intel have come to embrace it for certain products. But the community lacked governance, with no consensus around identifying the source of code, ideas or license agreements, as well as provide a community for developers. These problems become acute as projects begin to scale. So a group was formed that in 2001 morphed into the Linux Foundation; its staff do the grunt work for securing patents, maintaining infrastructure to integrate far-flung developers, and talk to the media.

Perhaps its most important job is to support commercial development of technology by emphasizing the greater gains to be had through a certain level of collaboration. Goodwill is the coin of the foundation, Behlendorf says: “It’s how we keep IBM, HP and other companies from turning this into a zero-sum game.”

Making blockchain open-sourced
In early 2016, Linux Foundation members identified blockchain as a technology that could use such governance. Blockchain had emerged as the infrastructure to support Bitcoin, and its link to the cryptocurrency was obscuring its potential for other uses, and endangering its long-term future. So Hyperledger was formed to provide governance for open-source development of DLT.

IBM, Intel, Hitachi and other Linux members had already launched blockchain initiatives, while organizations that were new to the foundation or had no experience with open-source development were entering the fray, including banks such as JPMorgan and Wells Fargo, as well as the bank-consortium-backed R3 and startup Digital Asset Holdings.

This is a young space, like the Web in 1994, with lots of different ideas – so let’s bring them under one roof

- Brian Behlendorf, Hyperledger

All of these projects, such as IBM’s Fabric and Intel’s Sawtooth Lake, were working on private DLT projects, trying to develop use cases for blockchain and the apps to go with them. The differences among these projects are very technical, involving different consensus methods, potential to add participants and overall consistency of approach. But, unlike private blockchains being developed for immediate commercial sales, Hyperledger’s projects avoid a centralized approach or a concentration of market power. They also build on the original open-source nature of Bitcoin and Ethereum.

Behlendorf, who joined Hyperledger in May, 2016, said: “To be of service to the blockchain community was not to choose one solution, but to say: ‘This is a young space, like the Web in 1994, with lots of different ideas – so let’s bring them under one roof.’” That unity is not about forcing developers to use the same architecture, but to agree on licensing standards, the sharing of the best ideas, and an environment of multiple stakeholders so DLT prospers even if a major vendor or bank retreats from the space for commercial reasons.

Legal clarity is vital to Hyperledger’s projects. “No enterprise should worry about a patent lawsuit from a contributor to a Hyperledger project,” Behlendorf said.

Real projects doing actual things?
Next is to see these projects begin to result in actual applications. IBM’s Fabric is due to see its first release later this year. “That will be a big sign that this is code that is ready to run in production,” Behlendorf said, noting that Hauwei, the London Stock Exchange and the Depository Trust & Clearing Corporation are also contributors to Fabric.

In addition, the Japanese company Soramitsu has put its Iroha blockchain development under Hyperledger’s umbrella; developers are seeing whether some of Iroha and Fabric’s designs can be merged. “The process is driven by the developers, rather than by one person’s architectural view,” Behlendorf explained.

I’m not here to help Wall Street move faster in settling trades

- Brian Behlendorf, Hyperledger

Hyperledger is also now home to Cello, a blockchain-as-a-service model, and Plenum, which seeks to establish single digital identities across multiple ledgers. Other projects seek to bridge blockchains being developed under Hyperledger to the Ethereum community, and promote ether (the Ethereum digital currency) as a public token by establishing standards for its common use.

Behlendorf said, “We can bring that mix of cutting-edge work in blockchain technology, smart contracts, and homomorphic encryption, and get that to people eager to get these into production.” (Homomorphic encryption allows encrypted text on one system to be deciphered on another system without exposing the underlying data.)

Behlendorf isn’t driven by banks’ commercial interests: “I’m not here to help Wall Street move faster in settling trades,” he said. “I like the social impact applications for blockchain and how we can reinvent the world through better transparency and auditability of systems.”

But he recognizes it’s commercial pursuits that will drive the development of distributed ledger technology. “We want to stop talking about use cases, and start talking about case studies,” he said.

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Hyperledger: as explained by Brian Behlendorf, Linux Foundation