“The second challenge is there a lack of certain core building block and infrastructure to enable devices to communicate with one another,” Bala added. “The obstacles are there because of the lack of standardization in the ledgers, but standardization will never happen because there will always be fragmentation.”
Rather than looking for one cryptocurrency or ledger to become a global standard, Bala suggests parties would be better served by looking toward interoperability solutions. “One has to start to construct some bridges so that you can have devices that are on different ledgers communicate with one another,” he said.
A lot of people in those domains will be kicking and screaming, but I think all the people in the system will benefit from lower costs and greater efficiency.”
Fragmentation Meets Specialization
While protocols like Ethereum are vying to become go-to, general purpose Blockchain protocols, Bala said he finds the notion of a singular Blockchain standard highly unlikely. What's more likely is a future of specialized Blockchains, where different markets are served by the protocol best for them. “The idea of one distributed ledger to rule them all or rule the world—I think that's not going to happen,” he said. “The world will recognize the winners, who are chosen based on speed and adaptability to specific domains and needs. Those that don't adapt to needs of a particular market won't survive that long.”
The market is already seeing use cases like this. Helix3, for example, is a Blockchain platform specifically targeted at healthcare and protecting patient data. “If we look at healthcare, data is siloed and controlled by a few major providers,” Bala said. “There are federal mandates now to allow every US citizen to pull data out and know their own health records, but that data is fragmented and it's all over the place. I think some consolidation will happen there using Blockchain.”
Another example, Iota, is one of the Blockchain protocols being adopted by the Mobility Open Blockchain Initiative (MOBI), a collective of automakers looking to apply Blockchain to automotive applications. And other cryptocurrencies are being applied to energy production applications.
“I think what I see in the next five years is that we will begin to see this type of Blockchain based on these enterprise computing typologies being leveraged in various industries,” Bala said. “All of these sort of fragmented systems that have been surviving due to some inefficiency, they're bound to be disrupted. A lot of people in those domains will be kicking and screaming, but I think all the people in the system will benefit from lower costs and greater efficiency.”
But, Bala clarifies, that's not to say that everything should be on Blockchain. “I will say that we are all eager to put everything on Blockchain, but we have to put the relevant information on Blockchain and leave the rest off-chain. So those who think that you have to start recording every piece of information on Blockchain, that's crazy. [Blockchain] is very good for metadata, but really bad for raw data. So you have to pick and choose your battles with this technology.”
Those battles are ones that Bala sees happening very soon and, in his estimation, the Internet of Things—in all of its forms and implementations—will be better for it. “Except for maybe political reasons, there's no need to maintain the status quo. There are no technical or financial reasons to continue what's going on.”