“Blockchain technology will create more than $176 billion dollars worth of business value by 2025 and $3.1 trillion by 2030.”

Gartner Blockchain Technology Report, 2019

Many large companies are working on implementing Blockchain. It’s estimated that over 95% of enterprise Blockchain projects are built on Ethereum. Enterprise companies have chosen Ethereum because Ethereum has the core capabilities needed to build enterprise applications… today. Almost all of the pieces are in place. To build enterprise Blockchain applications, companies need the ability to store immutable data on the Blockchain (✓) and a way for customers to view and interact with that data with authentication (✓), auditability (✓), and verification (✓). These core abilities are already implemented by Ethereum. All that is needed is a way to efficiently start building and deploying enterprise applications.

So, what’s the holdup?

Developers, Developers, Developers

In September of 2000 Microsoft CEO Steve Ballmer memorably told his audience that the key to Microsoft’s future success was developers, developers, developers and so it is with Ethereum. Developers are critical for the success of enterprise Ethereum. Currently Ethereum is programmed primarily using the Solidity programming language, which was originally conceived in 2014. There is a dearth of Solidity programmers who also have enterprise development experience. This shortage is holding up development of Ethereum based enterprise solutions.

“200,000 Solidity devs vs 10 million Java devs“

It’s estimated that there are only about 200,000 Solidity developers in the world, and the majority of them have little or no enterprise experience. Compare that to the estimated 10 million Java developers many of whom have solid enterprise experience. That’s a 50x difference in number of Java programmers vs Solidity programmers. The scarcity of enterprise knowledgeable Solidity programmers has made it difficult for enterprises to move forward with Blockchain projects.

Finding experienced engineers who have both programming experience and domain expertise is one of the most difficult challenges facing enterprise companies. Almost all enterprise companies use Java as their preferred language. This is because Java is the only programming language that provides the high performance, reliability, and scalability required by large companies. Fortune 500 companies already have large teams of Java developers who have both professional programming experience and domain specific experience.

In 2018 and 2019, 28% of executives surveyed by Deloitte sited lack of in-house capabilities as the main barrier to blockchain adoption. Image source: Deloitte

“The biggest challenge that enterprises face is implementing new technology. Enterprise Blockchain applications are so new that experienced developers don’t exist at scale.“

When developers lack business experience they don’t understand the processes that they are modeling. Even if programmers know how to code, they don’t know what to code. Developers who develop software without understanding the business requirements usually end up with buggy software. This is a problem for companies because bugs in enterprise applications and business logic can have serious real life consequences.

There are developments on the near horizon that will provide ways for Enterprises to tap into their own existing pool of talent, and open up the floodgates for a vast array of Ethereum based applications. Ethereum will be Enterprise ready sooner than you think. Anton Mozgovoy will speak about this at the Malta Blockchain Summit in November.

“The floodgates are about to open on Enterprise use of Blockchain and Ethereum in particular. It’s been a long time coming, but the required technology pieces are falling into place to finally make Blockchain Enterprise Ready.”

Although people have a general understanding of Blockchain, many haven’t considered the tremendous impact that Blockchain is going to have on Enterprise companies. Large corporations with thousands of employees are realizing that Blockchain can help them lower costs, verify and secure data privacy, improve access to information, decrease bureaucracy, and even transact business. Companies are developing software that will run on their servers and go out to the Ethereum Blockchain to query information. What’s transformational about Ethereum is that these applications can go beyond simply recording events that occurred in the past and actually transact business in real time as dictated by the terms of smart contracts.

“Blockchain has the potential to do many things, but to achieve these things you need programmability. Programmability is what makes Ethereum truly transformational.”

Programmability is Critical for Enterprise Blockchain

Programmable Blockchains have three key capabilities that are valuable to Enterprise businesses: the ability to manipulate money, the ability to implement trust, and the ability to import real world information onto the Blockchain with high confidence of accuracy. Understanding the distinction between programmable and non-programmable Blockchains is crucial to understanding their value and business potential. To get the most valuable benefits you need a programmable Blockchain, meaning that a programmer can actually write a program in a high level language that expresses the terms of a smart contract that is being carried out on the Blockchain. Programming is a necessary component to realizing the full potential of Blockchain.

Blockchain is a history of transactions, stored sequentially, that people can see and contribute to. Although everyone can contribute to the Blockchain, nobody can go backwards and change what’s already on the Blockchain. It’s immutable. One of the reasons for using math in Blockchain is to ensure – with absolute certainty – that the Blockchain can not be modified once it’s been established. Once something’s been confirmed on the Blockchain it can not be erased. This is why Blockchain is suitable for financial transactions. One example is money transfers. Once the transaction has been made, everyone agrees that the transaction occurred on this date, with this block number, and that the account balances have been adjusted. Once this is confirmed on Blockchain it can never be changed or modified by anyone.

“Smart contracts will let us reengineer and streamline business practices that have been around for centuries. Many types of transactions will become much more efficient, and in some cases, will go from being impossible to easy.”

Smart Contracts

For non-programmable Blockchain, there are only a few types of transactions that can be written to the Blockchain, but with full programmability, there are many many types of transactions that can be written to the Blockchain. In fact – it’s completely up to the user. Users can make their own types of transactions that correspond to programs. These programs are called smart contracts. Smart contacts are the software programs that run on a programmable Blockchain. These programs enable complex deals, ensuring that person A paid the money, person B did her part, person C did her part and everyone agrees. It’s this level of flexibility that gives programmable Blockchain its power, and that enables us to realize the biggest benefits.

“Out of the 2,000+ cryptocurrencies out there, Ethereum has demonstrated how a blockchain technology can achieve real-world adoption with both individuals and enterprise businesses.“

Jeremy Wall, Coin Telegraph, July 27, 2019

Ethereum

Blockchain has the potential to do many things, but to achieve these things you need programmability. Ethereum is fully programmable and has its own programming language called Solidity. A programmable Blockchain is essentially a global computer where the results of every computation can be seen by anyone. With programmable blockchain, we can create smart contracts that enable peer to peer business transactions. Many businesses in the future will be conducted directly peer-to-peer via smart contracts.

Ability to Manipulate Money

Blockchain enables a new form of money. It’s a type of money with fundamental advantages over traditional money. These advantages are so huge that this new form of money may eventually supplant all legacy money systems in the world. Blockchain will open up opportunities for more buyers and sellers, and enable transactions and economic activity that want to exist, but can’t under the current money system. This new economic activity may come to dwarf the size of the current economy, yielding tremendous opportunity.

Blockchain is the foundation for the next generation of money, and money is extremely important for civilization. We couldn’t have accomplished everything we have throughout history without money. Without money, transactions would have been much more difficult, especially in multi party transactions (think “barter system”). Although traditional money allows people to transact business with each other, it also creates opportunity for disputes.

Programmable Blockchain has some form of money built in. In the case of Ethereum the currency is Ether. Smart contracts have the ability to manipulate money. With the appropriate authorization, a smart contact can transfer money from one party to another. A smart contract can actually effect the transaction itself and implement the transfer of money between people or between entities. This means that you can write a program which can actually carry out business transactions involving the transfer of money (or other tokens representing value). The ability to manipulate money is already in place and is fairly mature. This is the capability that most people are familiar with when it comes to Blockchain.

“Enterprise adoption of the blockchain has quietly reached a tipping point across multiple use cases. IDC forecasts enterprise blockchain to grow at a robust pace leading to a $15.9 billion market in 2023.“

 IDC Worldwide Blockchain Spending Guide, August 8, 2019

Ability to Implement Trust

Blockchain has the capability to implement trust. Since Blockchains are programmable in a high level language, they allow for varying degrees of trust to be built in at the transaction and communication level of the infrastructure itself. As trust becomes part of the infrastructure it will seem to disappear from the perspective of the end user. Because the Blockchain is programmable, we can use existing solutions now, and in the future we can implement new solutions (some that we haven’t even imagined yet) to solve trust problems. And we can solve them in multiple ways in parallel. In the real world, if something is very important, we validate it in multiple ways so that we can have confidence that things check out. These approaches are going to be carried over into the world of Blockchain, but on the Blockchain they’re going to be automated and programmatic.

Verification and Validation of Identity

One very important category in this area is verification and validation of identity. The reason this is so important is that it’s codified into US law that in certain types of business transactions, you must know who the other party is on the other end of the deal, otherwise you’re not allowed to do the transaction. This is true in banking in particular. KYC and AML are part of US law and almost all countries in the world have signed on to enforcing these rules. Some people have been thinking of Blockchain as a means to evade these rules, but in fact blockchain is a powerful tool for ensuring compliance with these and other regulations, because compliance can be built into the protocols of the smart contracts.

“Corporate and government spending on Blockchain is expected to hit $2.9 billion in 2019 which is an 89% increase over 2018, and reach $12.4 billion by 2022.“

Forbes, April 16, 2019

In April, Michael del Castillo at Forbes wrote an article entitled Blockchain 50: Billion Dollar Babies identifying 50 Enterprise companies with minimum revenues or valuations of $1 billion that are actively exploring blockchain and leading the way in adapting decentralized ledgers.

The Transformative Potential of Blockchain

Blockchain has evolved from a payment system using Bitcoin to a decentralized computer using Ethereum. Ethereum smart contracts allow for the creation of any number of automatically governed structures that can be used to transact business. Some interesting areas are financial transactions, business contracts, medical records, wills and trusts, trading, and insurance. Soon proof of concept implementations will give way to actual profitable business applications and Enterprise companies will start migrating business activities to the Ethereum Blockchain. Blockchain could become a basic element in every business application where immutability, integrity and security is needed. Women and men who are involved in Ethereum Enterprise Blockchain now are defining the way businesses of the future will operate.