Enterprise Ethereum?

Ethereum Enthusiasts Scramble to Catch Up in the Blockchain Wars

6 February 2017

According to internal planning documents, a group of Ethereum users are set to launch “Enterprise Ethereum” at the end of February in an attempt to create a blockchain-based network that could underpin technology applications for industries such as healthcare, finance, real-estate, security, government and the public sector. The move comes as Ethereum has fallen behind other blockchain efforts focused on deployments in specific industries.

The goal of the effort is not to develop a specific product, but instead “support Ethereum-based technology best practices, standards and reference architectures,” as laid out in a draft press release announcing the initiative.

The effort is being organized by Consensys, the Brooklyn-based blockchain development company that late last year failed in an attempt to organize a coalition of insurance companies around distributed solutions based on Ethereum.  Members of the effort include consulting firm Accenture, carbon-fuel giant British Petroleum, blockchain start-up Nuco and U.S. bank JPMorgan.  A source at one of the start-ups involved said Consensys had stepped in to fill the leadership gap left by the fractured agendas of the efforts’s diverse member-base.  “The members come at this from a lot of different perspectives and with very different agendas, so they stepped in to herd the cats,” said the source. “It’s obvious to the rest of us this gives Consensys a stage to drive adoption of their Ethereum based products.”

Supporters believe Enterprise Ethereum can be run at very low cost, which puts it at odds with other well-funded efforts such as IBM’s Fabric.  IBM is reported to have spent nearly $1billion already on its blockchain efforts, money it intends to recoup by charging customers to use products built on their network.  In contrast, the Enterprise Ethereum effort will run on a skeleton staff that spends less the $1 million a month.  Members are hopeful that low costs will encourage broad adoption.

Skeptics question, however, whether the low-cost structure can produce a system robust enough for use across complex industries.  “It seems pretty naïve to think they’re going to build the entire system using volunteers working in their spare time,” said one. “And as soon as they move beyond the volunteer model, the costs go up…dramatically.”

The initiative also faces time constraints as they seek to win users who might otherwise adopt payments network Ripple, bank-consortium R3’s Corda, and other platforms that are much farther along in development.  It also faces an uphill climb for adoption when competing with Linux’s Hyperledger Project, with its more than 100 members globally. While the public version of Ethereum has kept up with competitors, the Enterprise effort wouldn’t complete their private reference implementation until the end of 2017.  That would mean a production version wouldn’t exist for more than a year – an eternity in the fast-moving world of blockchain technology.

Still, some members are hopeful that attracting users will boost their own work on private instances of the Ethereum blockchain. Founding members BlockApps, Brainbot, Nuco and Tendermint all stand to gain, and that benefit extends beyond tech companies. A source familiar with JPMorgan’s plans said that this initiative aligns with their internal efforts to build Quorum – an Ethereum fork currently in production within the bank’s own firewalls.  “By positioning themselves at the center of the Enterprise Ethereum effort, they’ve effectively developed a consortium around Quorum.”