Blockchain ledgers can be used wherever customers need to maintain data integrity: Rahul Pathak of AWS
As businesses across the world ready to unlock the potential of blockchain, Rahul Pathak, GM, Databases, Analytics, and Blockchain at AWS, gives us the lowdown on the AWS platform, smart contracts, distributed ledgers, and how they all can benefit companies.
Across the world, blockchain is fundamentally transforming traditional business models in numerous ways. It is helping big businesses, corporates, and startups open up gateways to gain a competitive advantage, and stay miles ahead of the competition.
Rahul Pathak, GM, Databases, Analytics, and Blockchain at AWS is a man who knows how to build and market products. He has been with AWS for eight years now, and knows all about relational databases and the impact of big data on businesses. A graduate from the Massachusetts Institute of Technology, Rahul has an MBA from the University of Washington and has been in the corporate world for two decades.
Ever since AWS announced its blockchain bets last year, countless corporates want to unlock the potential of this new technology.
Amazon Managed Blockchain is a fully managed service that makes it easy to create and manage scalable blockchain networks using popular open source frameworks Hyperledger Fabric and Ethereum. It has many clients, including Change Healthcare, GE Aviation and Philips.
In this interview with YourStory, Rahul talks about the future of blockchain, how AWS is adopting this technology, and how companies stands to benefit.
Edited excerpts of the interview:
YS: How are clients using managed blockchain today?
Rahul Pathak: Customers are using Amazon Managed Blockchain in a number of ways. We are seeing customers such as Sony Music, Nestle, Singapore Exchange, Accenture, AT&T, TrackX, Guardian, DTCC, MOBI, Legal & General, and many more interested in leveraging the managed blockchain service.
Some examples of where we are seeing traction are in tracking a distributed supply chain where businesses want a transparent and efficient way to keep track of ownership of goods that move across a distributed supply chain consisting of multiple suppliers, distributors, and retailers – one where no single entity owns the system.
It helps retail where consortiums of retailers and restaurants want to partner with banks and third-party loyalty programmes to streamline customer rewards. The third is clearing and settlement of financial assets, be it settling transactions for international trade of goods, peer-to-peer asset transfers, or trading of tokenised digital currencies and securities.
Blockchain is also being used in digital rights management in the music industry and other digital content industries, and to manage and record bulk annuities for an insurance business.
YS: What do you think about smart contracts?
RP: Smart contracts are an integral part of blockchain technologies. Smart contracts are code executed on the blockchain network. Often, they define the rules of a business contract and are executed programmatically when preconditions for the contract are met.
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YS: What are you building your blockchain platform on?
RP: We support popular open source blockchain frameworks. Hyperledger Fabric is available today and Ethereum is coming soon. At AWS, we stay focused on the needs of our customers, and let that customer focus drive how we develop new services and technologies. We learned from customers that blockchain technology provides a unique benefit for certain needs. These use cases focus on areas where customers want to allow multiple parties to transact, execute contracts, and share data in an immutable way, without the need for a trusted central authority (for example, transferring reward points across a network of vendors, or processing transactions that concern a number of different trade and logistics companies).
YS: Tell us about distributed ledgers and how they can benefit companies.
RP: Ledgers have been around for a long time and were typically used to record a history of economic and financial activity between two or more parties. Earlier civilisations, those in Mesopotamia and ancient Egypt, used ledgers made with stones and papyrus plants. Today, a banking application that tracks credits and debits is one of the most common examples of a ledger.
Ledgers found in a blockchain as decentralised ledgers (and now in Amazon Quantum Ledger Database (QLDB) as centralised ledgers) typically consist of the following:
- Current and historical state: A data structure that keeps the current and historical state values, allowing applications to easily access the data without needing to traverse the entire transactional log.
- A journal: An immutable transactional log that keeps a complete record of the entire history of data changes. The transactional log is append-only, meaning that each new record is chained to the previous, allowing you to see the entire lineage of data's change history. Additionally, with the help of cryptographic hashing, a process that assigns a unique identifier (like a fingerprint) to each record, blocks are chained to one another providing immutability for these records. This allows someone to view the history of transactions and know that nothing was tampered with.
Compare this to relational databases where customers have to engineer an auditing mechanism because the database is not inherently immutable. Auditing mechanisms built with relational databases can be hard to scale. They put the onus on the application developer to ensure that all the right data is being recorded.
Blockchain ledgers can be used wherever customers have a need to maintain the integrity of their data.
YS: If a company is signing up with AWS, how should they plan their blockchain strategy and how should they understand the pricing charged?
RP: The first step is always to identify the business problem. Assuming the customer has identified that, the next step would be to identify other organisations and partners to join the network (i.e. groups of enterprise banks). From there, this consortium would decide the rules of the network and develop smart contract code to define the business logic executed in the network.
For pricing, there is no up-front commitment with Amazon Managed Blockchain. For Hyperledger Fabric on Amazon Managed Blockchain, you simply pay an hourly charge (billed per second) for your network membership, peer nodes, and peer node storage, and you pay for the amount of data you write to the network. Amazon Managed Blockchain offers two editions, the Standard Edition and the Starter Edition, and each edition has a different membership hourly rate. Additionally, you pay standard data transfer rates. You will need a VPC PrivateLink endpoint that is billed separately to interact with your Amazon Managed Blockchain resources.
When you are finished with an Amazon Managed Blockchain network, you can easily leave the network or terminate it and stop paying. You only pay for the resources you use.
YS: How does pricing work in blockchain smart contracts and distributed ledgers?
RP: Amazon Managed Blockchain does not charge extra for smart contracts deployed on the network. The cost for the ledger component of the blockchain framework is part of the overall Amazon Managed Blockchain cost. We will continue to keep our focus on our customers and work with them to integrate new features that meet their needs.
(Edited by Teja Lele Desai)