In this episode, we talk with Brian Behlendorf, the Executive Director of the Hyperledger Project at The Linux Foundation. We discuss the different ways that blockchain can revolutionize the industries that can benefit from it.
Full Podcast Transcript
[00:00:04] Hello I’m Philip Claudio and you’re listening to the Hashed Health podcast. This show is dedicated to everything health care and blockchain related. Here at Hashed Health. We’ve begun this incredible journey of developing blockchain solutions for healthcare and we have the privilege of being able to talk with amazing people about this subject every single day. The goal of this show is to include you in these conversations. Join us as we host meet-ups, attend conferences and conduct interviews with our friends and other industry thought leaders. You can find more content like this at hashedhealth.com. That’s www.hashedhealth.com or connect with us on Twitter @hashedhealth. Here we go.
So in March we attended the HIMSS annual conference in Orlando and it was amazing conference and a lot of excitement and hype around blockchain the CEO of IBM Ginni Rometty, in her opening comments did a great job of hyping the technology along with IBM Watson, but with all this hype comes a lot of baggage and we meet lots of people who don’t have a clear understanding of what blockchain is. So today we look to set the record straight. My guest today is Brian Behlendorf. Brian is the executive at the Hyperledger Project, which is an open source collaborative initiative hosted by the Linux Foundation. Its charter is to build a set of distributed ledger or blockchain technologies that can be used for a wide variety of purposes and that can be embedded inside the emerging next generation internet technology stack. Welcome Brian. Hey it’s great to be here.
[00:01:48] So Brian I usually don’t do this with my guests but I just wanna take a minute and talk about your background. So in the early 90s you co-founded Organic which was the first business dedicated to building commercial websites. It was during that time that you also got involved with the Apache Software Foundation. From there you became the CTO of the World Economic Forum. You also was the former director and CTO of Collab Net which is a company that develops tools for enabling collaborative and distributed software development. At one point you were venture capitalists with Mithril Capital. And then finally you’ve landed at the Hyperledger Project as their executive director. I really want to hear kind of about your background and learn about how you got involved with blockchain and you know how this technology has played a role in your career and what pointed did it really become a big thing on your radar. Right… Yeah I know you as you’ve described I’ve kind of bounced around a lot of different things. I’m a lot older than my photos make me look so large part for my career though has been about open technology, open open source software really and trying to figure out how to make it sustainable, how to help people make money using it and I don’t mean like like IPO riches kind of thing. I’ve just been driven more by how do you help developers get paid and build businesses around open source software, around trying to build common infrastructure common technologies and so you know I’ve played that out in a couple different settings and kind of a startup setting, in a nonprofit setting.
[00:03:30] It worked as you mentioned the World Economic Forum which is like an international you know non-governmental organization, non-profit really. And then as a venture capitalist even. And so when once Hitoshi Nakamoto was paper first came out. You know I read the abstracts like a lot of people did. And you know there are parts to me that are like this is this is very different and cool and I’d been close to like the cypherpunks community and others for a long time. In fact that was one of the cool parts of working at Wired magazine actually was how close they were to so many of the people thinking about financial cryptography and that sort of thing. But you know when I first heard about the paper I was also concerned that you know I don’t really see myself as a speculator, as an especially around currencies. It seems like you know Bitcoin would do well the worse off that the world and the economy got so I didn’t really want to be betting on that to happen. And there was also a concern I had that the you know the structure of Bitcoin would cause if it didn’t turn out well cause an awful lot of smart people to talk themselves into being part of a very large distributed Ponzi scheme. Right. And I’m glad it didn’t turn out that way. But it also is one reason why I just ignored it for so long. Much to my detriment for sure. But but also you know what really happened was when I was a VC.
[00:04:54] We started to talk to Bitcoin companies and blockchain companies and are still fairly much a skeptic but it was when one company in particular when Factom actually came by and described to me the land title use case and that use case is storing the records that normally gets stored in a government you know repository of you know who owns what title to what land and where and when and how is that confirmed and does somebody have a mortgage or some other lease against that land and all that that I realized oh my gosh this actually is a big deal because up until that point I’d actually started to grow pretty despondent at the technology revolution and how much you know the move to the cloud and the move to Web services and all that had been a move to centralization when it really got a lot of people and fired up about the internet was decentralization and open source was all about decentralization. We didn’t build one big web that everybody was on. We built lots and lots of distributed webs that people could bounce around in between using common standards. But also you know distributed governance right. And so so I spent time trying to understand that model and started to see that this was an answer to a lot of my concerns about this. This over centralisation, but it still wasn’t, you know Bitcoin itself wasn’t solution to that because in a way Bitcoin itself is centralized in how it’s developed and centralized in that it’s one blockchain right. It’s a decentralized blockchain but there’s one governance model around it which you see that playing out in the debates happening now around the future of bitcoin and should there be a hard fork in what happens.
[00:06:31] So long story short this use case I played out I saw you know applications for it in healthcare where I spent about a year while I was in Washington D.C. working for Health and Human Services and realized this could have a big impact there. And so gradually as I learned more about what was going on I heard about the Hyperledger Project getting spun up at the Linux Foundation and as I learn more I said OK they’re on to something good here. And if I can help with it then then you know that feels actually like a more worthwhile thing for me to be doing than making other people richer by being a venture capitalist. So I jumped over and joined as Executive Director back in May. You know as a a member of the blockchain community you are definitely a cornerstone in our community and it’s just great that you know you’re able to go to all the conferences you able to go to and you do a great job of just helping people gain a clear understanding about the technology and ways they can get involved at that HIMSS conference what I thought was funny was that a lot of people were when they came to our booth, I think you probably saw this too as they kept talking about blockchain as this new database and they would talk about it and their really hyped up about that technology and they say oh this new database to understand it’s a new database. It’s going to work like a network that everyone in the world can connect with and it’s always going to stay in sync or accurate and it’s going to be the cures for all these interoperability problems in healthcare.
[00:08:01] You know what kind of crazy things do you hear and how can we appropriately describe the technology so that we can have people have a clear understanding of what of what blockchain actually is. Yeah you know sometimes metaphors filmy so so you know sometimes they describe it as like a benzene ring right a benzene ring as this bizarre thing in nature where you know you’ve got six, what are they carbon atoms kind of arranged in a hexagon? And they share half a bond, but you know it kind of rotates around so quickly around that ring that it essentially is one and a half bonds which you know atomic bonds between each molecule even though you can’t really have half a bond, so by the same token I don’t think blockchains themselves are actually properly thought of as databases nor are they necessarily properly thought of as networks they’re kind of this weird hybrid of both. It’s a networked database or a database of networks or something. But like so the metaphors are challenging to us right now for sure but this is why I try to actually stop using that word blockchain to be honest I’ve started to really just say distributed ledgers and smart contracts because first off those are the order in which we’re going to build. You can’t really have smart contracts without distributed ledgers so we have to start with that. That’s the foundation and you start by telling people imagine if you know you have this shared system of record everybody can write to it. You can’t delete anything from it.
[00:09:34] And we use cryptography to ensure that everything is kept in sync and provide you know true at a station that kind of confidence that what’s been written in the past hasn’t been modified all that right. And that’s really cool and we should. That alone solves a large number of coordination problems out there in the world. What’s smart contracts give us is the ability to automate that and take a lot of processes in the world that today are very paper bound processes very human labor oriented processes and convert them into automated processes. And whether that’s the sharing of medical records or that’s you know you know there’s a firm belief that if we had had smart contracts in place in the mortgage industry that the unruly you know unwinding of that industry in 2008 when all these mortgage instruments were being sold off at pennies on the dollar and leading eventually to people getting falsely evicted from their homes we might have had a much more orderly unwinding process perhaps not even have had the run up in asset prices that caused that calamity. But that’s an idealistic statement. It presumes that that industry, you know, if blockchain technology had been around 15 years earlier would have gotten together and figured out how to build their systems in such a way that the thing that caused the run up in asset prices would have been manageable and the thing that would have caused the unruly unwinding would have been foreseen and planned for. So likewise in healthcare.
[00:11:03] The big challenge here is neither open source nor blockchain technology is magic pixie dust that will automatically stimulate, not only better health information sharing or more automation of payment flows and process claims processes or put the patient back at the center of health information exchange. Neither of those do it on their own. At one point you know ten years ago a lot of us had hoped that open source software would be that that nudge even that wasn’t enough. But what blockchain technology does give us the chance to do is get people out of their big data fetish kind of mindset where they believe they have to be the center of the data universe around healthcare or at the very least the center of their patients health data universe and get them into a mindset where they are sharing more data by default where they are building common systems of record for that track you know pointers to that data and how it’s being distributed that maybe uses the efficiencies that come from processing claims and payment flows through distributed through a blockchain technology through distributed ledgers and smart contracts as the pole deal to bring along with it a more patient centric view of how to manage health care records. But there is absolutely the risk that we can implement bring all these systems with us and still implement them the old broken way without rethinking the business models and rethinking the motivations and the design of what we build that ends up leaving patients just as disenfranchised. Now in the future as they are now. Right. And that’s what we will hopefully we can avoid.
[00:12:41] And what I think it’s going to take are the people involved in these early days in the application of blockchain technology to healthcare to make sure that the first couple projects we put out there are patient centric projects are focused on showing how easy it is now to involve patients to put patients at the center of health information exchange to involve them in consent mechanisms for the sharing of their data and and hopefully create economic reward for companies that do that the right way you know not just better HIPPA compliance you know because you’re, HIPPA is supposed to share records with the patient. You know no more than cost right. But actually themselves to realize the advantage in terms of better quality of care, faster James faster claims adjudication all that sort of thing. And so so yeah at HIMSS and at other conferences people are getting really excited. There’s a lot of uncertainty about how this happens. There are some very promising signposts out there such as you know the the HHS essay contest from last year that generated 70/75 odd papers with 15 winners. You know it was it was a really good exploration of this of this landscape and some of those like the Medrek paper from MIT got people pretty excited because here it seemed to be a process for managing personal health data on on a public blockchain you know. But doing that in a confidential secure, cryptographically secure way that guarantees down the road patient access to their data no matter what happens to the clinic they found treatment in or if they change health plans or move out of region or whatever. So so people are excited. And that’s not unreasonable excitement, but it’s on us I think now to channel that into the great first set of pilots and projects. Yeah I couldn’t agree more. You know one thing John Bass our CEO here at Hashed. We always talk about every product we say.
[00:14:44] We’re looking at a proof of concept always okay what is the impact to the patient and we’ll be able to summarize that in three sentences and it needs to be impactful for us one to make a move on that. But what why did Hyperledger or why did Linux create the Hyperledger Foundation and what role is are you guys looking to play in this blockchain space? So so you know the genesis days happened just before me so I have to kind of read the tea leaves and the runes and the and the messages but yeah I think it came from a set of companies, small and large companies who felt that the current focus on a curren… the focus on cryptocurrencies was overshadowing the other distributed ledger pure distributed ledger advantages. I mean there are a lot of places where you can find build networks where the participants want to build this common system of ledger and don’t need to be mining a token to be able to incent their participation in that network right. And that’s not all networks and for the public facing kind of thing you have a different space you have to focus on so. So the thesis was you could strip that out and focus purely on disrupting the existing information sharing and transactional networks out there and decentralize them without taking them all the way to anonymous public. You could do a lot of good and you could get a higher transaction rates and it was kind of this thesis as you alluded to the very beginning we weren’t all going.
[00:16:14] We aren’t all going to converge on one big chain that has millions of transactions a second you know because it just doesn’t work that way. This will be a world of many chains and we’ll be building technologies to not only support you know the setup of these chains make that easy, make that standardized make that transparent, but building technologies to span multiple chains and you can probably see this in the indie project that we brought into Hyperledger just yesterday we finally voted and at the Technical Steering Committee to accept it as a project this is a platform for tying together identities across chains so that if I’ve got three different blockchains that I’m talking to to assemble somebody’s healthcare data, I know and I can figure out who that’s that one person is across these three different chains and that one person can elect when to share data with me if I’m a provider or insurer that they have that sits elsewhere. So so it’s really a personal data and privacy focused approach to doing this. And so in the real world that Hyperledger aims to take on is is to be the place where the geeks get together to actually write code and ship it right. Like everyone writes white papers everyone writes use cases. Everyone you know invests in and buys buys tokens in an ICO when they hear an idea that they like. But but if we’re not building common plumbing it’s going to get a lot harder. It’s going to be a lot harder to build common applications or really differentiated applications that way high value business oriented applications on top and this is relevant if you are a big company like IBM or let me say an Epic or Stirner right.
[00:18:02] You’re going to want to focus much more on the end user interfaces and the business logic than you want to focus on blockchain plumbing. But it also obviously matters to startups who you know really need to spend every dollar that they can on differentiated value add types of things right. And it matters for regulators in the healthcare space and the role of the government both as a as a regulator but also as a big producer and consumer of health services and payments to see the stuff go in a direction that is open efficient transparent and there probably is no greater public policy prerogative at this point than to moderate or even cut the cost of healthcare in the United States for the quality that we get. Right. So this is important stuff. And so what we want to be is not the standards body. We don’t want to be the governance organization that runs the chain or set the chains that people share data across. We want to be the people building the standardized plumbing that gets used everywhere right. To do for the blockchain space what Linux did for the for the Linux space and where and where there might be a need for us to go. You know one step above pure operating system framework what level and do something that ends up being health care sector specific you know build a set of models, smart contracts and validation logic and maybe even some basic business logic that make it easy to adopt, to build a health care records system and health care record sharing across the blockchain then by all means we should do that right.
[00:19:41] And that’s really what we’re trying to drive the conversation with our members around is what’s the next logical thing for us to be doing bottoms up. You know so that Hashed Health and and big companies and you know the VA and others can get the stuff in and built and converted more quickly. You know one thing that I’m really envious of is that at the Hyperledger Foundation you basically have this awesome seat where you get see what’s going on on financial services. Obviously you’re going to track health care automotive and insurance. Can you talk about what’s going on in each of these different verticals and how they compare and how they’re different what challenges that are unique to each one and what challenges are similar? Yeah well if you’ve got another hour. These and these are interesting. I mean look at the the operating system level a lot of the needs are the same. Right. It’s you know a distributed ledger. Some of them only these distributed ledgers to be faster than others. You know some of the use cases in finance call for tens of thousands of transactions per second. Right. Some of them will need smart contract language and validation logic that runs on the peers that just needs to prevent double spend. Others will want functionality that allows for full turing complete programming and make sure that that doesn’t get in the way of other efficient processes like theirs. There’s a highly technical differences but at the end of the day you know I’d say that the sectors are more similar than different. Right.
[00:21:09] So supply chain track and trace is something that is is you know every sector has the automotive sector, the pharmaceutical sector, the mineral sector like the diamond trade right. The project being set up there. And and almost every financial use case has significant non-financial ramifications, right. So you know is it a titled kind of use case is partly about helping people ensure that their historic title to their property can’t be taken away from them by a corrupt bureaucrat. But it’s also substantially about helping lenders make sure that when they’re making that they’re lending against a title to a piece to a house that that title won’t be taken away from them either. Right. So it’s one of those rare moments where you do see this harmonization between positive social impact in a lot of different stories and an economic rationale to get this implemented right around efficiency around transparency around trust. And so we see a lot of the. Okay so. So being at the World Economic Forum you know which whose motto is committed to improving the state of the world. You even though are no longer there you can’t walk away but still be an idealist. And so the Sustainable Development Goals are a set of 29 top level and I think 260 underlying goals that the world you know the governments and NGOs the world have kind of aligned themselves around to go and try to fix what’s broken out there. Right. For malnutrition to slave labor to and human trafficking to carbon emissions that sort of thing.
[00:22:52] Every one of those 268 different goals involves a metric every metric in order to actually know if we’re making progress against it or not needs to come out of an accounting system of some sort. And the best way we know today to build an accounting system that that is trustworthy that is decentralizeable that doesn’t just require that we look you know centralized all of trust in either a government or into Google. The only way to do that is with blockchain technology. And and so the private sector is really interested in this but the NGO sector as well and so so it’s a good question as how do we get when the diamond industry moves to a to a supply chain you know that’s recording it’s track its movements on on a blockchain? How do we also make sure that the human rights organizations and whistleblowers and the workers themselves have the ability to also publish into that chain so that you know those violations can be tied to data about who are the good suppliers are not in a way that those suppliers cannot eliminate? They can they can contested they could challenge it you know but it becomes part of their permanent record too. And this is a big question for us and society how do we design these systems to get both the economic impact and maximize the social impact. Real quick I just want you to kind of describe what would actually open sources just in case some of our listeners don’t know because I mean you know we’ve seen a lot of projects that kind of started out in the open source space Skype for example started out as an open source project and then it got acquired by Microsoft.
[00:24:30] We’re seeing big bigger companies like IBM, Microsoft donate code to these open source initiatives and then all of a sudden they might pull back pull them back in and commercialize on top of them. So can you just just quickly kind of take a step back and describe what our open source actually means. Sure sure. And I was in the room in 1997 when we had a meeting with a bunch of people in the free software space who were building businesses going you know maybe there’s a different brand that we can use different term that we can use to distinguish ourselves from the GPL for one thing but also make it clear that we’re not anti capitalist at all. Right. What we want is for companies and everyone else to work together on common infrastructure and so we chose the word open source because we thought that would be a way of generalizing it and said it’s about licenses, software licences so we set about standardizing those software licenses and I’ve left that behind quite a bit. And just as a community. Not not the not the concept but because that’s still very much in my heart. But you know what’s really important there is not so much the license as the as this idea that you can use a platform like the Apache Web server or the Linux operating system or you know other major open source packages and know that that software outlive its original developers. Right. That you know if it’s good if it’s a good product. But more importantly a good community it is a multi vendor multistakeholder community building this code and you don’t have to worry about a single vendor kind of losing confidence losing faith and moving on.
[00:26:07] This is the kind of community that organizations like Apache’s since day one have been attempting to to engineer Apache itself says, you know we we value community over code right and projects have to demonstrate that they can get to that multistakeholder spot before they even leave the incubator. So we’ve we’ve copied that at the Linux Foundation at at least on the Hyperledger project. We really believe that it’s important that these underlying technologies even if they initially start out as projects initiated at one vendor where there’s one vendor who really recognizes the commercial value of having this code out there and trusted and downloaded that eventually those projects need to grow up and become multi vendor projects and Fabric Fabric started out life which is a Hyperledger or project you could say it’s probably our most active project at this point. Started out life inside of IBM and so when it was open sourced IBM didn’t just drop it on our doorstep and walk away because we don’t have developers. Right? We depended upon IBM today to continue developing it right because they knew it better and they knew because they had had lots and lots of customer engagements what needed to be done. So we we you know they obviously continue to invest but they also opened up their processes right. So you could see what are the issues they’re working against, what’s the architecture they’re working against. What’s what would they like to do next in fact the architecture process is something that we drove across a number of our key members of Hyperledger and got their chief architects involved the chief blockchain architects involved in kind of working with IBM to chart a new path that has now ended up as the Fabric version one architecture.
[00:27:53] And that wouldn’t matter if IBM was still writing all the code. The good news is we’re at a point where IBM is about 50 percent of the code and the rest of the community is providing the other 50 percent. And I think that’s really good after about nine months of active development to be ending up there. Right. But we’d like to get to the point where maybe it’s 25 percent rather than 50 percent. Right. And that’s going to take time as it takes other companies to see the economic value of that IBM is saying in becoming a a host for blockchain technologies, becoming a support organization for implementing them through their global services division. And that’s clear very clear at IBM but I think it’s growingly it’s becoming more and more clear to other companies out there and that’s why we’re seeing other contributions come in. And so I’ll just end it with. I think you shouldn’t think of something as open source unless it actually has an open source license which doesn’t allow anybody to pull back. Right. You can still build a business on top but you can’t pull the code back anymore. It has to have an open source license and it has to have a multi vendor community around it and somebody like the Linux Foundation or the Apache Software Foundation or the Eclipse Foundation these other foundations whose entire rationale the reason they exist is to give that project a long term, sustainable, independent home. Right. And that’s what we hope to do with Hyperledger. That’s awesome. Real quick you know, what
[00:29:24] What do you view right now as being beyond the on the bleeding edge of blockchain development? You know I thought Zcash is pretty interesting. You’ve got Kutum out of China. What would you define as the bleeding edge of blockchain development? You know where we’re at, and where are we going to be in three or five years and what’s with the development that you’re seeing right now they’re really gonna shake things up? It’s I have to admit I spend more of my time focused on the bricks and foundation than I do on the spires at the top of the castle. Although I know they’re there and I want to bring the full stack in. So it’s Zcash starts and homo merfolk encryption and secure multiparty computing. I mean all those approaches to trying to do secure distributed computing where privacy can be protected. But you can still do useful things like search or add up right or analyze even if you don’t have access to the underlying data that’s really important because right now we have this addiction to moving personal data around and being sloppy about it. I don’t mean we in the Bitcoin community, the blockchain community, I mean we in the technology industry are too laissez faire about other people’s data and so approaches to being able to work with it without having access to it, ironically enough, it’s going to be really important. And so and there’s a lot of cutting edge math that that calls for that to be critical to sort out. I’m also really intrigued by the fact that smart contracts are are a very different kind of programming than we’ve grown accustomed to.
[00:31:02] We’ve grown accustomed to being able to update web apps you know instantaneously and push updates ten times a day or even mobile apps push updates on a daily or weekly basis. You can’t do that with a contract. The contract has to do what you tell it to do and unless you have some declared process for updating that contract you know every update is going to be a negotiation with other parties. Right. Or potentially with no parties. If it’s an automated tool so there’s there’s some big issues to sort out. So I’m intrigued by what’s going on in the Ethereum community that’s why it was important for me to bring to it to have that door open to projects in the Ethereum community to come into Hyperledger and sit next to Fabric and start to think in Iroha and or other projects so that we can support them but also learn from them and maybe you’ll see a solidity virtual machine running on top of Sawtooth or running on top of Iroha or Fabric at some point. And maybe they’ll learn something from us about enterprise software I don’t know. My gut tells me that nobody knows for sure. And my job is to maximize the serendipity and the potential for that kind of discovery and for the ability to turn that as quickly as possible from from new ideas new cutting edge thinking into production quality code. And real quick for our listeners who don’t know, can you kind of briefly and quickly define what a smart contract is? So a smart contract is basically a piece of software that is deployed to a distributed ledger that runs on some periodic basis or at a pre-defined basis and runs everywhere.
[00:32:50] And when it runs that it might you know check things like the weather or the time of day or the price of some other you know instrument somewhere. And and if it comes up with an answer and everybody else across and never comes up with the same answer and they all agree then you probably will see another entry added to the distributed ledger. And so with that you can build things like insurance contracts you could build things like options and derivatives on equities. You can build tools that will only decrypt data for people under certain conditions and only if they write. You can write to a ledger that such a sharing happened. And so in the healthcare space. This is how we get to auditable health data sharing. If the only way to get access to a health data record is by asking a smart contract to share it with you. And there is no way to avoid that smart contract logging that requests into the ledger. Then you have an audit log that cannot be compromised and that’s pretty effin cool. I completely agree. So Brian are there any any questions you want me to ask you as anything I’ve left out? No not at all as you. Any softball you want me to throw you away? What we’re building at Hyperledger and the Linux Foundation is a community of technologists coming together to build common appli…, common frameworks, common libraries common things to go and implement blockchain frameworks inside of enterprises, but but around the world. And it’s a global effort. It’s a developer driven effort.
[00:34:26] So you’re not going to have anybody from a bank hovering over you telling you what to build unless they’re your employer. If you want to learn about blockchain technologies I think it’s a good place to get started. And if you want to see the future I think it’s where we’re making it up as we go.
Awesome. Well Brian I appreciate your time today. As I said before it’s you are a fixture in the community and a cornerstone to a lot of the efforts that happen in this space. And it’s just great that you know we have so many people who are eccentric and extremely smart but not all of them are as humble and take the time to talk with people like you do and we we truly appreciate that. Here at Hashed Health and I I really thank you for your time today. My pleasure. I’m really happy that Hashed Health is out there fighting the good fight on all of this. You’ve been listening to the Hashed podcast presented by Hashed Health. Find more content like this at hashedhealth.com or come to our next meet-up and join our growing community of blockchain professionals enthusiasts. Learn more at hashedhealth.com. Thanks for listening. We’ll see you next time.