& cplSiteName &

Blockchain-Powered Cloud Dreams Face Barriers

Mitch Wagner

New platforms being built to harness blockchain to fund and orchestrate cloud computing face security, reliability and regulatory challenges.

"It's a cool idea. It allows small payments, you are free to do things as you will, you are not limited by distributors, resellers or conventional contracts," Enterprise Strategy Group analyst Dan Conde tells Enterprise Cloud News. "But there are no guardrails. Things could go out of control."

At least two startups -- Filecoin and Cloudwith.me -- are pursuing plans to launch cloud platforms that would be both funded and managed by blockchain mechanisms. (See Startups Plan Peer-to-Peer Clouds, Funded & Enabled by Blockchain.)

Blockchain is a form of distributed database or ledger, developed for the Bitcoin cryptocurrency, that can be used to track ownership of digital or physical objects.

In the cases of Filecoin and Cloudwith.me, infrastructure would be provided by companies and people contributing use of hardware -- ranging from laptops to data centers -- in exchange for receiving blockchain-based digital tokens called "coins," which can be exchanged for other coins or for conventional money.

And in both cases, financial wherewithal to build the platform is being raised through sale of digital coins good for accessing the platform once it's built, a process known as an Initial Coin Offering (ICO).

Filecoin's ICO is scheduled for Thursday; Cloudwith.me plans its on August 25. Filecoin is building a cloud storage platform, and the Cloudwith.me platform would provide both storage and compute.

The two companies claim their platforms will be more flexible, reliable and easier to subscribe to than conventional cloud platforms such as Amazon Web Services and Microsoft Azure.

That's potentially true -- but the implementation will face problems, says Conde.

The cloud platforms will rely on infrastructure contributed by third parties. Users will need to watch out for fraud from those third parties -- providers offering to store content, and then holding it hostage. "There are a lot of weird one-offs that can happen. I hope these guys have dotted the Is and crossed the Ts, because there could be evil out there, and people could be willing to cheat you," Conde said.

Peer-to-peer cloud will face obstacles for businesses operating in nations with data sovereignty regulations, requiring data to be stored within national boundaries, Conde says.

The approach is in some respects old. SETI@home, launched at the University of California Berkeley, launched in 1999, using donated computer time to search radio astronomy signals for signs of extraterrestrial intelligence, Conde noted. BOINC is an open source platform for distributed computing, also developed at UC Berkeley.

These sorts of loosely linked distributing platforms are susceptible to problems, Conde says.

"In theory if everything works, and in theory if there's enough bandwidth, and in theory if everyone is trustworthy, and in theory if there is enough security, it'll work," Conde says. "But there's a difference between academics and reality."

He continues, "What if this is a wild success, and now your applications run across the universe and around the world, and everything is OK -- until there's a massive DDOS attack."

Conde adds, "If you're looking for space alien signals, that's fine. The space aliens can wait a week. But if you're doing medical imaging, that's a different issue."

Despite initial obstacles, the blockchain cloud could challenge hyperscale cloud providers like Amazon and Microsoft. On the other hand, Amazon and Microsoft could push back by adopting the architecture, if it's successful, Conde notes. "There's nothing that prevents the Amazons and Googles of the world from putting their two cents in," he says. "Second-mover advantage lets you learn from other people's mistakes."

However, despite concerns, Conde is cautiously optimistic.

"More power to them," Conde says. "Everything has to start somewhere."

But potential investors should be cautious about buying into the ICOs, he notes. "As long as people don't bet their house and savings on it, it should be fine," he says. "It's OK to experiment, but doing things at a large scale is a risk."

As with any emerging technology, enterprises should start small and look for small wins before dedicating more resources, Conde says.

Related posts:

— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Friend me on Facebook Editor, Enterprise Cloud News

Find out more about Network Functions Virtualization on Light Reading's NFV Channel.

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Wagner’s Ring
IBM and Cisco are working with Europe's largest port to reduce fuel consumption and other costs and improve safety.
In which we receive an alarming email from Oracle.
SD-WAN is about more than saving money – it also provides application delivery, insights and reliability. Find out more in this podcast sponsored by Citrix.
Platform is designed to enable enterprises to build big data analytics apps that move easily between public and private clouds.
Buying Evident.io extends Palo Alto's portfolio with API-based security capabilities and compliance automation.
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
June 26, 2018, Nice, France
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 17, 2018, Chicago, Illinois
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
NFV Is Down but Not Out
Iain Morris, News Editor, 5/22/2018
Trump Denies ZTE Deal, Faces Senate Backlash
Dan Jones, Mobile Editor, 5/22/2018
What VeloCloud Cost VMware
Phil Harvey, US News Editor, 5/21/2018
5G in the USA: A Post-BCE Update
Dan Jones, Mobile Editor, 5/23/2018
Vanquished in Video, Verizon Admits OTT Defeat
Mari Silbey, Senior Editor, Cable/Video, 5/23/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed