IEEE Talks Blockchain: Entrepreneurship, Activities and Opportunities

Dr. Claudio Lima is an industry thought leader and entrepreneur in Advanced Digital Transformation and the founder of the Blockchain Engineering Council (BEC), which promotes industry advances at the intersection of Internet of Things (IoT), Enterprise Blockchain and Machine Learning/AI. Drawing on a passion for Blockchain Distributed Ledger and AI/IoT technologies, he is leading advanced research and has created the industry vision and project initiatives to develop smart contract-driven IoT autonomous machines (auto-bots), using AI and edge-IOT computing. Previously, Dr. Lima served as Global Smart Grid CTO of Huawei Technologies in Europe-Asia-Pacific and as Distinguished Member of Technical Staff (DMTS)/Sr. Research Scientist at Sprint Advanced Technology Labs (Sprint ATL), in Silicon Valley, CA. He also served as Vice Chair of the IEEE 2030 Smart Grid Standards, where he made significant contributions to the development of global Smart Grid. Dr. Lima is chair of the IEEE Blockchain in Energy Standards WG - P2418.5, vice-chair of the IEEE Blockchain IoT Standards WG- P2418.1, member of the Blockchain/DLT Cybersecurity Industry Advisory Board (IAB) of PNNL/DOE, technical chair of the IEEE-PES Blockchain in Energy Workshop and IEEE-NIST Blockchain Global Summit, and former global standards director of EEA Ethereum Enterprise Alliance. He has more than 12+ USPTO patents and +150 conference and peer-review papers publication and he also is a regular industry speaker in IoT/Blockchain/AI conferences.

Q: Can you please provide an overview of the Blockchain Engineering Council-BEC and its mission?

Claudio Lima: The Blockchain Engineering Council came about because there were many intersections in the industry related to IoT and AI with blockchain introduced as the next generation component of the digital transformation that most enterprises are experiencing today. Blockchain will underpin the next generation Internet, introducing a new layer of value and trust that isn't available on the Internet today. Blockchain is also known as Distributed Ledger Technology (DLT), which adds to business innovation since DLT is based on decentralized peer-to-peer computing architectures, supporting distributed applications (DApps). Also, as an underlying technology, blockchain is going to take over and gradually replace the web 2.0 social media-centric client-server Internet models as we know today. We will see more and more decentralization happening, which is the basis for the web 3.0 peer-to-peer distributed computer architectures. In this next wave, computers and mobile devices will be doing peer-to-peer communication, and blockchain will create a layer of trust on top of these transactions. While that may be a way off, it will certainly be disruptive for today's Internet and enterprise, creating a new wave of decentralized applications and business models.

Q: Can you please describe what are the advanced blockchain concepts that Blockchain Engineering Council-BEC is working on?

Claudio Lima: BEC was created as an independent organization to work on defining new rules, creating and sharing forward-looking ideas, creating future roadmaps and new blockchain standards for enterprise-grade blockchain industries. BEC is focused on building the 2P2S Blockchain architecture model, where 2P stands for privacy and performance and 2S stands for security and scalability. These are vital components to evolve blockchain from today's limited approach. BEC is also working on building interoperable, open source and standards-based distributed edge-intelligence ledger architectures with government, academia, standards organizations and industry partners that intersect AI and IoT, completing the digital transformation cycle. Until now, little work has been done on the blockchain engineering side, which is basically how you create new technology frameworks, protocols, architectures, and standards. Most of today's blockchain models are based on cryptocurrencies. We know that blockchain technology goes beyond that application and will provide an additional distributed ledger layer for enterprise solutions to authenticate, validate and authorize enterprise transactions and assets, including field operations improvements.

First, we are focusing on creating new blockchain architectural and framework models, defining their relationships, actors and mapping key technologies. We understand this is the first step before moving the blockchain technology forward, by adding interoperable models. Almost nothing has been done so far in this industry, and most of the models available today are either blockchain-platform or product-centric specific. The market is also quite fragmented. So, we decided to take a holistic view where the blockchain engineering concepts are introduced using a system-of-system engineering approach, where complex systems are broken down into logical sub-systems, and their relationship are established. This is a brand-new concept in blockchain and the BEC mission is to innovate by creating these methodologies and framework approaches for several industry vertical markets. Our vision is to be platform independent and technology agnostic since we expect that given the innovation pace, blockchain technology will advance quickly and only if we establish these initial framework boundaries we will be able to catch up and understand where all these innovations are going. BEC works on mission-critical field operations of any enterprise business process to understand if blockchain can be applied and help solve pains and streamline operational efficiency. In some cases, blockchain is not a solution at all. In other cases, it can help quite a lot. We identify key issues, understand the challenges and then work on developing unique viable solutions that address key performance indicators (KPI) and the return on investment (ROI) improvements that blockchain can provide. Most advanced solutions combine blockchain with AI and IoT, and here blockchain is the underlying layer that connects these technologies. We also want to engage in academia early on because blockchain is becoming a new academic field, which is the combination of communications and computer engineering fields. Therefore, the Blockchain Engineering Council is poised to lead advanced blockchain concepts and technologies.

Q: How does enterprise blockchain differ from cryptocurrency in your view?

Claudio Lima: Bitcoin and cryptocurrency are merely just one side of the blockchain evolution, mostly focused on the financial sector (fintech) that is part of the public permission less blockchain. However, the other evolution phases that are happening now focus on 2P2S enterprise-grade permissioned blockchain solutions that will be inevitably adopted by most of enterprises and government as the new web 3.0 decentralized architecture evolves. Today, the market is confused about the association of blockchain with the rising and fall of the initial public offering (ICOs) and cryptocurrencies hype, but the blockchain enterprise side, which is not connected to any cryptocurrency market fluctuation, will be eventually adopted by enterprises to create sustainable value – this is just a matter of time. BEC believes blockchain is an essential value-added enterprise layer for the next-generation Internet. Most of the blockchain enterprise is being promoted by Fortune 500 companies, government and startups, who are rethinking their strategy to address the evolution of decentralized Internet using the enterprise layer as the next wave of evolution. We are also looking at blockchain technology to improve and secure the Internet because transactions that happen over the Internet today are neither secure nor validated, and adding this blockchain layer will improve transactions and asset validation security. In summary, we can define the blockchain as the next layer of enterprise architecture for processes, asset, and transaction validation and authentication.

Q: What are some other value propositions of blockchain adoption and applications?

Claudio Lima: There's much value and a multitude of possible applications. For instance, I often refer to the "three T's": transparency, traceability, and trustability, which are the best benefits offered by blockchain. Transparency means that all data records, data transactions and the ID of the participants can be displayed to all other parties in the system or just to a certain number of permissioned participants at a given channel. This visibility can be assigned on a permissioned, role-based authorization model. Traceability means all data records can be traced from its origin, or point of provenance, to their destination and all steps recorded with crypto-hash timestamped transactions. This process becomes a blockchain-certified transaction. All data is certified and the transactions, once registered, become immutable, meaning that no one can alter these records, which is one of the main characteristics of the blockchain. Trustability uses consensus algorithms, applied to peer nodes to guarantee that the network participants validate the data and the transactions. Data integrity is also an essential concept for edge cybersecurity. In this case, consider an IoT device trying to connect to a data cloud; if the identity of this device is not known, authorized or qualified, then all transaction originated from this device can no longer be trusted. So, blockchain solves this issue by building a data provenance integrity validation layer to the edge IoT devices.

Q: What are some direct benefits blockchain enables through its ability to decentralize the Internet?

Claudio Lima: One of the most important benefits is to offer IT cost savings. If companies have a centralized cloud-based IT service, then the cost for transacting in this cloud-based solution is high. This is particularly true for the new wave of machine learning applications, where big data is needed to train algorithms, and this comes with a cloud cost. If we decentralize these cloud-based processing capabilities, using peer-to-peer distributed architectures, combined with blockchain consensus mechanisms, and data authentication layers, IT costs can be reduced. Another benefit is that you can make data secure and resilient with decentralized networks, avoiding a single point of failure if the cloud servers are compromised. Finally, decentralized solutions can be more secure against hacker attacks since the data is now distributed instead of centralized. This also improves data privacy as users' personally identifiable information (PII) is not completely exposed in a single location. So basically, by decentralizing the application and the data, you are not as much exposed to privacy liability due to a hacker attack, because hackers will have a hard time finding a single server to compromise.

Q: What are some of the challenges entrepreneurs face using blockchain, can you point to a few examples of where things are headed?

Claudio Lima: To develop advanced blockchain solutions requires a new skillset from developers and IT professionals. Most of the developers today have a mindset that was built around client-server, centralized web 2.0 architectures. Some of them are still trying to catch up with the innovations, new programming language and new skills introduced by the blockchain wave. But the vast majority still lacks the experience needed in this new area to run production systems. Just a very few can claim to have more than 3 years of experience in blockchain since this is just a recent technology. Most of the blockchain development work today is around the deployment of proofs-of-concept (POC) solutions; however, implementing an end-to-end production-grade blockchain solution is a complicated endeavor since it deals with multiple emerging and intersecting technologies, and just a few have experienced blockchain beyond simple POCs. This lack of expertise, experience, and right mindset for developing truly peer-to-peer distributed and decentralized Internet architecture will take some time to evolve and create a more specialized workforce. However, before this happens, we need to reeducate the developers' way of thinking to consider all decentralization architecture design aspects. BEC is committed to working with standards, organizations, and governments to develop unique web 3.0 AI-IoT and blockchain methodologies and frameworks to design, train and promote next-generation interoperable and highly secure, open and scalable blockchain solutions.