Blockchain-based cloud is here; why should it be on top of your agenda

Businesses today are staring at a situation which can either catapult the cloud market to the next generation or disrupt the current cloud market, currently being led by AWS, Azure and GCE

By Som Shekhar Singh

Innovators are already exploring ways of leveraging Blockchain – and not just to extend its outreach to an extensively segmented market. In fact, they believe that the next-generation technology will transform the cloud industry by turning it into a more competitive, open marketplace where the prices are determined by demand and supply. Eventually, these innovative Blockchain systems will lead to the creation of more secure, decentralised ecosystems.

Understanding the ‘consumption side’ of the cloud market
Enterprise leaders driving their mission critical business processes to the cloud expect accountability, reliability, compliance, security, verifiability, auditability, acceptance of liability, etc. They demand a secure business process where every step can be verified in real time. Currently, no cloud provider can guarantee these advantages in their entirety.

A decentralised Blockchain-based cloud can help address these concerns. It could even improve the cost efficiencies and take virtualisation to the next level. The technology is still in its nascent stage, yet it raises hopes of such a solution in the near future. Cloud 3.0 could will be knocking at our doors.

A peep into the ‘production side’
From the cloud hardware utilisation standpoint, it’s not at all surprising that 85 per cent of the world’s computing capacity remains unutilised from data centres, large technology companies and other H/W present over the internet. Therefore, sustaining economy of scale will be a challenge for cloud service providers serving against the elasticity of demand, as they will still need to maintain the hardware on-hand to serve the peak demand. This will lead to low hardware utilisation on the production lines and create bottom line pressure on the cloud service providers, forcing higher price points.

In terms of competition, the advent of next-generation Blockchain services is imminent – distributed cloud storage, distributed computing market place through internet, computer and impregnable data security. This will be the Blockchain of clouds, and all data – including transport, compute and storage of data across all networks in the world – will transform our society from one that is trust-based to one that is truth-based.

Decentralised file storage systems like Storj have the potential to eliminate high markup costs and market efficiencies, and provide a much higher level of privacy, security, reliability, speed and quality of service. Storj is among a bevy of startups using Blockchain to manage distributed, object-based storage platforms. It sets new standards of unit economics through the utilisation of free capacity of the storage node (PC or a massive data centre) for distributed data storage. Each file is shredded, encrypted and spread across the network. It also creates an economy and marketplace where the network users can share (renting a storage) their available storage to those who need more storage than what they can share.

How can cloud compute be a game-changer
Today, cloud solution providers are racing to build next-generation IT infrastructure on the foundation of a new cloud computing paradigm. This technology enables them to build a virtual cloud infrastructure that provides high-performance computing services on demand. iExec is one such provider of distributed applications running on the Ethereum (DApps), delivering scalable, secure and easy access to the services, data-sets, and computing resources.

Akash is another new Blockchain cloud entrant providing a platform for the cloud industry. Its open marketplace allows compute providers to turn their surplus capacity into a revenue stream by renting the available resources and earn token in exchange with prices driven by supply and demand.

DFINITY is building a new kind of public decentralised cloud computing resource, i.e a Blockchain computer similar to Ethereum, but with a more superior performance. In this case, business applications running on internet computer will allow costs to be cut by 90 per cent or more by reducing the supporting human capital required.

Aspects of auditability, when combined with the large infrastructure support, will complement an important aspect that has always been a challenge. Such a system would give complete traceability on the operations performed on cloud. Entities who are either using or administrating the cloud can be held responsible for their actions, regulators will be able to audit all processes and everyone involved can verify what happened when. Once built, such a platform will solve several business concerns, and the entire global enterprise IT budget would be up for grabs.

How does Blockchain ensure data security
Blockchain would make any kind of break-in impossible on cloud. Some advanced approaches have already been adopted for Blockchain-based cloud storage, where the goal is not only to keep the data encrypted, but also decentralised. Instead of stashing the data at one storage space, data gets broken into bits, stored on a bunch of servers, and only the owner with the key needed can put the pieces back together.

Era of ‘cloud of clouds’ and inter-clouds
Considering the changing paradigm of the computing and storage needs, instead of cloud, i.e. a centrally hosted massive infrastructure for computing and storage, we will need to extend the data storage, applications, processing and other computing services. These services need to be delivered from the nearby infrastructure, i.e. Fog Computing rather than from a remote data centre. Besides, some of these cloud-oriented services will need to be pushed on the client devices itself – Dew Computing. This will require intelligent networks for these solutions to push the information, which we refer as ‘edge computing/mobile edge computing’. This calls for a composition of cloud infrastructure referred as micro clouds, cloud of clouds and inter-cloud, which will again be a composition of personal cloud, peer-to-peer cloud computing, community cloud providing distributed cloud computing. With all these cloud variants in the ecosystem, the need of computing will be immensely challenged to be served by the centralised cloud infrastructure like AWS, Azure and GCE. Moreover, these variants can be put on top of the Blockchain network backbone along with the inherent attributes of Blockchain providing a strong fit.

Conclusion
Of course, it would be reasonable to ask if such a system could be built in reality. Even a modest petabyte cloud implies billions of data transactions every second that would need to be entered into the Blockchain and distributed out. Thus, a key challenge for decentralised cloud networks is finalising computational transactions quickly. Currently, computations only become final after a few minutes. As a result, developers of applications such as decentralised financial exchanges struggle to communicate this to their users and provide an acceptable user experience. The implied network, storage and compute requirements would make it impossible to scale with the current version of technology. Blockchain is an apt candidate for this purpose. However, the platforms will be required to be advanced quickly to latch on to these opportunities and create new avenues with scale of services, operational efficiencies and quality of services for the solution providers and users.

(The author is the Director – Technology at Sapient Consulting)