The Cloud, Blockchain and Blockchain Cloud

Published On November 08, 2017

Cloud storage and, more recently, blockchain have been among the biggest IT topics in business. So, what happens if we combine them as a blockchain cloud?

First, let’s look at the state of cloud offerings. When cloud storage emerged there was initial and understandable distrust in the RIM community about handing enterprise content over to third parties. While private, hybrid, and other cloud offerings have emerged since then, some haven’t been immune to hacks and compromise.

Regardless, organizations are now using the major cloud brokers as hosts for developing blockchain solutions for transactional business processes. This offering is called Blockchain-as-a-Service (BaaS). The cloud hosts offer platform-agnostic spaces for developers to experiment and build solutions with blockchain technology. Leading cloud providers have also partnered considerably with banks on blockchain testing.

But blockchain technology could also disrupt the traditional cloud from the outside. The massive server farms leveraged by large cloud solutions require a lot of power, cooling, real estate, etc. Also, traditional cloud products require information packets to jump through zigzagging nodes in a network to get to their destinations, raising frustration with their throughput and delivery speed.

So, it’s not surprising that newer blockchain-architected cloud companies are going directly after the big, older cloud providers. Blockchain has grown from being a public ledger backbone to a storage infrastructure logic as well, and this has potentially huge implications for IG. Blockchain cloud might be perceived as a sort of peer-to-peer “gig economy” for storage, threatening the traditional central cloud vendor model. It’s already providing specific solutions, like e-warranties, with emerging companies competing for market share. So how does it work?

Blockchain cloud operates as a “thin cloud” when compared to traditional clouds. Anyone can rent spare storage on their hard drive by registering it in a sort of classified ads interface, stating the cost in cybercurrency. Customers contract with hosts to place their files on personal hard drives. The contract is authenticated and registered in several nodes in the network and in a ledger (block). Localized, distributed data packets have fewer network nodes to jump through before reaching their destination than with traditional cloud, so delivery is faster. Records are retrieved by the owner’s private key. Storage availability scales up fast and easily under this arrangement, and cost is a fraction of traditional cloud storage fees. Users essentially pay for virtual machine blockchain logic. There’s more to it, but you get the general idea.

Blockchain cloud is considered an immutable storage arrangement; distributed targets are more difficult to hack or compromise than single points of failure. However, blockchain cloud raises its own concerns. Cybercurrencies have been successfully targeted by ransomware and have proven volatile. Private key infrastructure is not immune to vulnerability. Cryptographic keys — required to re-assemble records from multiple network nodes — can be infiltrated or lost. Can you put Humpty Dumpty (your records) back together again? Can you trust John Doe’s rented hard drive? Is it immune to viruses, loss, hacking and other threats? Computer hard drives have long been characterized as silos, inadequate for corporate record storage. This arrangement adds an additional single-point(s)-of-failure risk. We must also tolerate blockchain’s mass duplication, another IG “No-no.”

It’s too early to predict exactly where blockchain cloud is headed. Its immaturity and competing blockchain platforms require IG professionals to watch and wait until it blossoms, but also to prepare for the possibility of radical disruption.