Around 2017, enterprise blockchain seemed set to go massive. However, as the boom period died down, the idea of businesses adopting blockchain seemed to die with it. Those that have embraced distributed ledgers generally opted for permissioned solutions using platforms such as Hyperledger.
An Outstanding Team
The early days of enterprise blockchain saw entry-level entrepreneurs lining up to profess their insights into business problems. Perhaps the first thing that sets Concordium apart is its impressive team. CEO Lone Fønss Schrøder spent 22 years at A.P. Moller Maersk, and currently sits on the board at IKEA and serves as Vice-chair at Volvo. The project founder, Lars Seier Christensen, founded Saxo Bank in 1992.
The science team is based in Aarhus University, the largest research university in Denmark. The team is led by Professor Ivan Damgård, the co-inventor of the Merkle-Damgård hash function, on which many blockchains are based.
The advisory board comprises names from Nasdaq and Skype, along with former Danish Prime Minister and former Secretary-General of NATO, Anders Fogh Rasmussen.
A New Era of Open Enterprise Blockchain
Much of the earlier discussions about barriers to enterprise adoption of blockchain tended to focus on issues such as scalability. At this point in 2020, it’s fair to say that there are plenty of options for scalable public blockchains, but enterprise adoption remains stuck.
The team at Concordium has pinpointed several other challenges that go deeper than scalability. One of the most critical is identity.
Built-in Identity Management
Public blockchains such as Ethereum or EOS are designed for pseudonymity, meaning there’s no easy way for an enterprise to know who’s on the other end of a transaction.
Concordium’s technology stack includes an identity management layer. All users undergo an off-chain identity check with a third-party identity provider. The identity layer stores a zero-knowledge proof of identity on the blockchain itself, so the ID document itself is never disclosed to anyone but the provider. Users can transact privately in the same way as they do on existing public blockchains.
However, in case of any legal order from the authorities, the platform provides an anonymity revocation process. Another party, called an anonymity revoker, trusted by the Concordium Foundation at the moment, is granted special rights to decrypt the identity object on the blockchain. This allows the identity provider to reveal the identity to the authorities. Acting alone, neither an identity provider nor an anonymity revoker can decrypt or provide a user’s identity.
Another critical challenge for enterprises is the issue of transaction finality. Most public blockchains take a probabilistic approach to finality, meaning users have to wait for a certain number of block confirmations to pass before a transaction is considered final. This doesn’t necessarily mean the transaction cannot be undone; it just means that it would be too costly or problematic to roll back the blockchain to undo transactions in the past.
From an enterprise perspective, this is extremely undesirable. Once a transaction has been legally signed, neither side would want to consider that it can be undone. So Concordium also anticipates this problem with a finality layer included as part of its stack. Each transaction effectively undergoes two levels of validation - the first as part of a standard proof-of-stake block validation, and a second on the finality layer, performed by a committee of nodes called finalizers.
Rethinking Existing Paradigms
Speaking to Coindesk as part of the feature, Fønss Schrøder outlined how a public enterprise blockchain could cause entire industries to rethink their existing paradigms.
She explains how smart contracts, unconstrained by permissioned systems, could function as marketplaces for supply chains and procurement, citing Maersk’s Tradelens platform as one example of where this could apply. Secondary markets in the car industry, such as servicing arrangements and lease agreements, are another area she believes is ripe for transformation.
Concordium is due to launch early in 2021; however, it appears that the project is already in discussion with several high-profile brands. In the words of Fønss Schrøder, “I don’t think we will disappoint you.”
Perhaps this time next year, fueled by Concordium, enterprise blockchain will finally have caught its second wind.