One of the biggest challenges with blockchain is that it’s not private. But full transparency is not something organizations can handle; the idea of having their business out there for all to see is more than a little unnerving (how many practical use cases can you think of).
Does that mean we will never see widespread adoption of blockchain in the enterprise? Michael Smolenski believes he has a way to help make it happen.
The potential for a private, and fast, blockchain
Smolenski is an engineer – electrical and software. His career has taken him from Goldman Sachs to Westpac Bank to MotionWerk (blockchain company) and a string of startups. In 2014 he created the startup Peer-to-Peer Lending, and when bitcoin arrived and then Ethereum launched, he said he could see the potential of blockchain combined with the work he was doing. His work in blockchain has won or made him a finalist in a number of hackathons. It’s safe to say Smolenski understands the benefits and challenges of blockchain.
He said that he knew there was a long way to go for the technology to become mainstream and spent a lot of his spare time developing solutions. Then, at a Blockchain Hackathon at Consensys 2017 in New York, he presented the basis for Lightstreams.
Lightstreams is a specialized blockchain for distributing content (video, audio, personal information, intellectual property, and so on). Smart Contracts are used to manage, track and trace who you gave permission to when you gave it and how. Essentially, Lightstreams is focused on privacy, confidentiality, and scalability.
Smolenski used Facebook as an example. People woke up one day and realized they didn’t know Facebook was giving their personal information away and they had no control over who and how it was shared. Lightstreams is the technology Smolenski said can give you back control – and potentially get paid for your information.
Lightstreams is not a solution; it’s a specialized blockchain that provides a lower level protocol, similar to an operating system. Along with his company building solutions on top of the protocol, it’s openly available to blockchain developers to build their own applications.
One example: Ocean Protocol (the co-founder is a Lightstreams advisor) is building a blockchain project for an AI-data exchange market. As a user/company you can sell your data to these systems where the AI takes the data and does the work it needs to do. Lightstreams could provide the provisioning of access to that data. A couple of simpler examples are a classic content producer who sells their content directly to the public (classic disintermediation), or a person who wants to share their medical records amongst all their doctors.
Along with issues around privacy, Smolenski said that blockchain technology is too slow and not scalable. Performance is another area of focus for his team right now.
I watched the video explaining how Lightstreams using permissioned blocks to share content, and it was very interesting, not just in how people can purchase content from a content producer, but how everyone who is granted permission to a piece of content is involved in sharing that content with others, not just the content producer. This ability to share content amongst all permissioned users is what makes Lightstreams more secure than other blockchains, but also more scalable.
The Lightstreams test network is up and running, and companies can start working with it. Smolenski expects to launch it live with TokenSail in September. It will be launched on the Ethereum network, but Smolenski said that next year they want to spin off an independent blockchain to provide better performance and a better governance system.
Overcoming some of the challenges of blockchain
From a technical point of view, working with blockchain is difficult because it’s a paradigm shift, said Smolenski. It’s peer-to-peer, not central which makes it more difficult to develop. Smolenski wants to make it more user-friendly and “less clunky” than it is today. He feels part of the reason we haven’t seen widespread adoption is that it’s not a user-friendly ecosystem yet.
That being said, Smolenski said that every major business has a blockchain lab somewhere. He was involved in a high-profile project in Germany last year – charging stations for electric cars. It used blockchain technology for peer to peer charging of electric cars. Imagine going to someone’s house and using their electricity to charge your car.
Smolenski thinks the challenge is the end-user convincing the consumer to use the technology. Working on potential B2B applications is a bit easier. Several of the developers on his team worked on the backend systems of the travel industry, and they can see the applications of blockchain to improve that industry, including showing the availability of hotels and rooms.
In a B2B environment, the focus is on integrating business systems, and you don’t have consumers to think about. In a B2C environment, he said you are competing with systems that already work fine (network effect at work here), and it’s hard to convince them to move to something new.
Smolenski was passionate about Lightstreams and the value that blockchain brings to content distribution. He’s also very articulate about how his solution works (his videos are very easy to understand), and it made me think about the challenges with sharing content today. There’s the challenge of storage, usually on cloud platforms and the cost that comes with it, not to mention if it’s a popular piece of content, what you may end up paying for network throughput. Then, there’s the challenge of getting paid for your content and giving some of the money to the payment solution provider. Everything you do to get your content out there requires involvement by someone else who gets a piece of your pie.
Lightstreams can give you full control and keeps most, if not all, of the money in your pocket. That sounds promising. It does require your content purchasers to use the Lightstreams app, but with the number of apps we load onto our smartphones, tablets, and laptops is any indication, it’s a small thing.
Lightstreams isn’t the only blockchain developer looking at privacy, Smolenski said others are looking at it from different aspects. And everyone is trying to solve the performance issue. I’m curious to see where this goes, and if there is a market that can adopt this technology in the content producer world sooner, rather than later.
Image credit – Feature image – Cyber security and privacy concept, by @stoatphoto – from Shutterstock.com.