Blockchain the backbone of supply chain and technology

Blockchain is the backbone of the supply chain and technology and is a trusted approach that needs to be acknowledged better by organisations around the world, stated Auxesis Chief Executive Officer Akash Gaurav and Auxesis SVP Technology Sudhir Chaudhary in an interview with Daily FT.

Chaudhary has been contributing to the blockchain industry as a blockchain technology evangelist for enterprise applications, currently leading the blockchain innovation team at Auxesis and is making technical contribution towards building third generation inter-operable Auxledger blockchain.

Gaurav being a blockchain entrepreneur founded India’s first blockchain company, Auxesis Group which is now counted among The Top 100 Most Influential Blockchain Companies in the World. 

Together they shared insights and viewpoints on the blockchain industry and as to why it holds tremendous potential to bring the 4th industrial revolution. Following are excerpts of the interview:

By Shannon Jayawardena

Q: Could you give a small background on Auxesis and what you do as a company?

Gaurav: Auxesis is a blockchain infrastructure company. We help organisations build and develop blockchain networks easily that can provide businesses to enable their business logics on top of a trusted system. Auxesis has been building up blockchain networks for Indian governments, central governments, banks, supply chains and has being enabling a lot of financial institutions to make a trusted system possible. 

Q: What role does technology and innovation play in the blockchain industry?

Gaurav: Innovation has always been coming in the chunks of leaps to take the technology forward. In the early 1980s we saw the rise of the internet and the communication error has since been completely shifted. Then in 2000, a new kind of internet, a more interactive wave came in, which again changed how entire banking systems, the supply chain industry or the governments have been functioning. We again see how this leap has been coming since the blockchain can now enable different parties to collaborate, make them work together and fill this gap that has been created in the society which has led to a lot of intermediaries rising. Now that the blockchain as an innovative technology has come up, we see that a lot of processors can be made autonomous which was not possible earlier, particularly those processors where human intervention or the trust between the parties are required. Now with blockchain as the next leap of innovation or technology, we see is going forward.

Q: Are there any network specific conditions for using blockchain technology within an organisation?

Chaudhary: That’s the beauty of this technology. It doesn’t have any restrictions with the infrastructure. So when we say this, what it means is that this technology can be implemented on existing infrastructure. The existing internet infrastructure which is there throughout this world can be utilised to implement blockchain technology. So there are no network restrictions for blockchain network to be implemented and of course it can be implemented in two ways which are as a private blockchain and as a public blockchain. Public blockchain goes through the public internet and private blockchain is implemented within your intranet. 

Q: Could you elaborate on public and private blockchain networks?

Chaudhary: The implementation of blockchain in itself doesn’t need any specific type of infrastructure and it doesn’t get restricted by any network. So when we say private blockchain what we mean by it is that the participants in the network are restricted. So whoever it is who can join a blockchain network is restricted. For example, in Sri Lanka all the banks form a blockchain network. This network will be only accessible via the banking system and no one else from the open internet will be able to access this network which is called a private blockchain network. When we take the public blockchain network, look at Ethereum which is a very easily available and socially utilised blockchain network. This type is publically available and you can build any kind of application and any citizen around the globe can start utilising this application without any restrictions. So these are the two types of blockchains being implemented on the internet itself.

Q: Why is blockchain a trusted approach?

Gaurav: If you go by the definition, blockchain is basically a database that has been shared across multiple parties or to state in a simpler language, blockchain is like a magical book. The magic about this book is that anyone who wants can have a copy of this book. If anyone writes any line on that book it will magically appear on everyone’s copies. Another magic about this book, is that the book will automatically reject any false line. So if everyone in this world has a copy of this book and you write something that does not agree with everyone else’s book, the line of code will automatically be rejected. Now of course this magic runs in the form of cryptography. Cryptography is the magical concept which links all these lines of codes together which in turn enables you to write only the truth on that book. If we see by the definition what it enables, is that if there are multiple parties and they don’t have an intermediary, we can’t actually trust each other. Anytime you want to execute a transaction, every other party in the network will ensure that what you are doing is correct, so you don’t have to directly trust the other party that you are dealing with, you have to trust the entire network and that is why it’s a trusted system. 

Q: What services do you offer at your company?

Chaudhary:  As you know we are a two and a half year old company who has already established itself as an enterprise great blockchain and an infrastructure company. When we say this, what we mean is that, the blockchain has an infrastructure that can be utilised by any business and that is what Auxesis provides. So we provide the base infrastructure over which any business applications can be built and utilised by the businesses. In a nutshell, we are the consultancy company that can help you to deploy a blockchain infrastructure and start using for a particular business case. In Sri Lanka we are collaborating with several leading mobile network providers to build a common KYC platform. So this common platform in terms of blockchain will be provided by Auxesis, the business consultancy will be provided by the network providers and we will build a solution that will act as a complete KYC solution for all the mobile network providers in the country. That is one of the solutions that we are bringing to Sri Lanka. Apart from that, another problem that we are solving for a retail giant in Sri Lanka, is the supply chain part. So we as an infrastructure company have the capability to connect the farm produce to the consumer’s hand. We offer complete end to end solutions for any enterprise and we offer a define product suite that can be really used by enterprises to really start and implement a blockchain infrastructure. 

Q: How does the company make technical contribution towards building third generation inter operable Auxledger blockchain?

Gaurav: While we have been in the business of evolving blockchain for nearly three years now, we have realised that there are some inherited problems or rather an immaturity in the technology that needs to be filled up and that needs to done so that blockchain be adapted as a mainstream technology. With the first generation of blockchain we see the first application which is bitcoin that came in. It was the first application that without any intermediary people started transacting millions of dollars.  

Then the second generation of blockchain came in as Ethereum. What Ethereum enabled is that now developers can build different business logics, build their own applications and run it on top of the network. The second generation has given them the power to build your own blockchain application. Still with the second generation there are problems. Number one is the different requirements of different businesses. We know that the regulatory requirement of a supply chain of a supply chain industry and the regulatory requirement of a banking is completely different. 

A single form of law chain which is supporting both of the data standards and the requirements as well as the particular business protocols has started creating issues where one kind of financial service require some kind of functionality to enable their business modules more smoothly but this has not been provided in the cold blockchains till the second generation. Then you also see that there are a lot of data standards quality problems. So basically in all these industries regulators put in certain kind of data standard restrictions as well as privacy restrictions. 

Now when it comes to blockchain, you have to collaborate, you have to share your data and you have to communicate with other parties in the network which is a problem. Banks and a lot of organisations are not open to it. The second problem is the different blockchains, right now in the blockchain we don’t have the capability for two blockchains to talk to each another. Today we have the internet and if we want to see a future where everything is actually running on the blockchain what we require is for different blockchains to talk to one another, otherwise it will not be possible. 

That’s how we designed Auxledger as the third generation blockchain with the number one feature that enables business protocols. So it’s a plug-in based architectural model where as per the requirements of different industries, we plug them all, enabling them to run their business protocols, their data standards and their regulatory requirements to be satisfied. Number two is that we built the feature of interoperability of blockchains. 

So Auxledger is a hybrid kind of network where different private blockchain networks can be deployed on top of the main network. This enables all the different blockchain networks to talk to each other through the public network. We also ensured that while they are talking, it should not be a general internet based communication but that the truth of the data is maintained. So with all these features Auxledger is built up as a third generation of the blockchain infrastructure. 

Q: What are the industry’s biggest challenges and how can Auxesis help overcome them?

Chaudhary: The biggest challenge that we see right now is the high operational cost that all the enterprises spend to adhere to regulatory standards. So that’s a very big challenge when every enterprise has to create almost a layer of a regulatory application over its business application to adhere to the regulatory standards imposed by that country or that state. In Sri Lanka as I said we are doing work with several mobile network providers and a long with that we are working with banks. We are working for a KYC module which can be shared among these two different business domains. 

Now the situation is if you want to open a bank account you have to submit a KYC and again if you want to get a SIM card from a network provider, you have to submit KYC. So here you are submitting the same documents two different business domains. So how we are trying to solve the problem is by bridging the gap and bringing one solution which can be assessed by both domains and once these are on the blockchain it is secure, trustable and it is not under one domain’s control. So the biggest challenge is trust between the domains and the regulatory standards which they have to obey. 

Apart from that, another big challenge that we are solving which I must say is a challenge for humanity itself is the wastage of food. So as I said, we are trying to track the supply chain so that we can tell the farmer during a particular season that this is the amount of produce that you should take out from your farm, so that no food gets wasted. These are the main challenges that we see.

Q: Auxesis today is counted among the top 100 most influential blockchain companies among the world. How did you get to this point?

Gaurav: We started this company in 2014 as a research group and initially the idea was to get people together and look into the blockchain as to what it enabled for different use cases. It was during the same time that Ethereum came in and it provided us a public blockchain infrastructure, on top of which applications could be built and deployed. We started looking at how the internet and intranet started. With the same concept, we thought that this can come big if the idea can be deployed for a closed group of people as well which further revolved and became known as private blockchains. So this is how the company started and then we built the first version of Auxledger, we deployed these on a number of state governments, on organisations in India, we hit a milestone of onboarding more than 50 million of the population on a network and that leads us to the largest blockchain network around the world. With this we showed the world how larger deployment ability can be done. 

Q: What is your company’s vision and mission?

Gaurav: What we aim is to be the company who provides a complete blockchain infrastructure and deployment of networks. In the coming years our mission it to onboard more people on Auxledger and research this figure to 200-300 million in India so that we can secure our network better and have more adaption of people. Ultimately our vision would be to push blockchain into complete main stream adaption by overcoming the shortcoming that the technology is currently facing. 

Q: Why Sri Lanka and what are your plans here?

Chaudhary: Sri Lanka has a very huge potential in terms of the market, reasons being that digitisation and new platforms are brought in by the government to being transparency. Through our partners Blockchain Technology Lanka and the already established partner Just in Time who have helped us put our foot in Sri Lanka and as I said we are now collaborating with a couple of telecom and retail giants who will help us to sign contracts and further establish our network here in the country.

Pix by Indraratne Balasuriya