The WelderDestiny Compass

Centralised VS Distributed Platforms - Issue #039

Wednesday, September 27, 2017 / Perth Australia / By Niekie Jooste

In this edition of "The WelderDestiny Compass":

• Centralised Platform or Distributed Network
• Centralised Platform
• Distributed Network
• Centralised VS Distributed in Welding
  

Centralised Platform or Distributed Network

We have looked at how centralised platforms can generate value from data aggregation in a number of our e-zines to date. In particular, in issue #10 of The WelderDestiny Compass...

We have also discussed the emergence of distributed ledger technology such as blockchain, (on which bitcoin is based) and its threat to organisations that act as third party intermediaries. In particular, in issue #19 of The WelderDestiny Compass...

The obvious issue that arises is that most of the "platforms" that add value by aggregating data are actually third party intermediaries. They offer value added services such as search engine or social media services, but they are actually just platforms go get people together, or to get people and information together.

So, will the centralised platforms or the distributed networks win out in the end? Today we think through this question, and consider how this will impact the welding industry.

If you would like to add your ideas to this week’s discussion, then please send me an e-mail with your ideas, (Send your e-mails to: compass@welderdestiny.com) or complete the comment form on the page below.

Now let's get stuck into this week’s topics...

Centralised Platform

Centralised platforms have an obvious drawback in that the users of these platforms have to accept that they loose control of their own private information. The idea being that once some private (compromising?) information is "out there" in the online world, then you can never really get it back. Sooner or later somebody is going to find and expose it, and then you will need to "please explain". Just ask the Ashley Madison website users!

The main advantage of such platforms is that a lot of the services provided can be provided "free of charge" because their business model relies on using that information and then selling it on. In many instances the way in which it is sold on is in the form of targeted advertising. Typical platforms that use this model are social media and search engine platforms such as Facebook and Google. If these platforms could not use your data to create their saleable products or services, then they would have no viable business model without charging you for their services.

We have discussed how there will in all probability be welding based platforms that provide a data logging service for welders and their employers. In return for the service, the data from many different welds will be aggregated and "sold on" in the form of products and services such as proposed welding procedures or research information.

While this model may lead to value being added in the wider economy, some companies may not want their information freely available on the internet for some or other competitor (or hacker) to get hold of.

So far, this type of model has worked well in the "civilian" world of typical consumers, but many organisations have been rather reluctant to commit their information to such a risky system. What appears to be necessary is a degree of anonymity regarding the source of the information. While all the platforms promise such anonymity high and low, we know that this is not really how it works. Just ask Edward Snowden or Julian Assange. They will tell you otherwise!

Distributed Network

Bitcoin introduced the world to the blockchain. Another term used for this type of technology is distributed ledger technology. Distributed ledger technology has introduced the notion that it is possible to have peer to peer transactions without a "trusted" third party intermediary. In addition, the information entrusted to the system can be totally anonymous, so it would not be possible to trace it back to a particular individual or organisation.

While the anonymity aspect is potentially true, it can also be very wrong. Seeing as the blockchain is actually a totally public "ledger", all the relevant information is freely available. Anonymity is only assured if it is not possible to trace even a single transaction performed by a user to that particular user.

For instance, if I knew that you paid a certain merchant at exactly a certain time, and I could get hold of that merchant's records, then I can identify what your "identity" is on the blockchain. At that point I can call up your entire history of transactions on that particular blockchain.

There are some of the newer distributed ledger systems that have different ways of storing the transaction information, so that this anonymity issue is resolved or at least greatly addressed.

The problem does however persist that if you have encrypted information associated with such a distributed ledger freely available, then a hacker could still get access to it if they were smart enough.

Even this problem is currently being addressed by distributed ledger systems such as "MaidSafe". The MaidSafe system not only encrypts data, but also breaks files up into different "pieces" and stores each piece of the data on a different computer. A hacker would only be able to get hold of a useable file if they get hold of the information of how to assemble the different pieces of the file.

So, with some of the newer distributed ledger systems we are very close to a position where we could be certain that information can be very safe from unauthorised access, and also be anonymous.

The basis of all these distributed ledger systems are that they rely on numerous computer "nodes" to operate the transactional side, and to store the data associated with the system. The people operating these computers, that in essence forms the basis of the distributed networks, will not do this for nothing. They want to be paid for their efforts! While systems based on distributed ledgers are generally low cost, they certainly are not free. The more you use them, the more you will need to pay.

This may be a problem for many individuals that have grown use to the world of the internet costing nothing, but many organisations will be very happy to pay a low fee to secure their information.

Centralised VS Distributed in Welding

The foregoing discussion would certainly suggest to me that both centralised platforms and distributed networks have a place in the world. It is not a matter of either the one or the other, but rather a matter of businesses setting up a product or service with a business model that is aimed at the particular customer that they are targeting.

The business model may be purely a centralised platform, or purely a distributed network, or a combination of the two.

In the welding industry, the type of platform that would be very beneficial from a distributed ledger perspective would be the collation of fabrication and quality information. Think of a system where all the records associated with the design and fabrication of a pressure vessel is stored on a distributed ledger system. There will be "real time" access to all the records during fabrication, and will then forever be available to the end-user of the pressure vessel.

No more trying to retrieve old manufacturer's data records (MDR's) out of the archives 20 or 30 years after manufacture. I have been through this exercise numerous times, and more often than not these records are lost or incomplete. In a distributed ledger system, the end user of the equipment will just have to keep the "key" to retrieve the information.

Obviously there will be costs associated with such a system, but the costs will be much less than what the end user would need to spend on an archive system, so this will be a feasible option.

In short, cunning entrepreneurs will need to get the right mix of centralised platform to distributed network, to ensure that customers will be happy to use their products and services at a reasonable cost and low risk to data integrity.

Keep an eye on this space. The growth and changes will be tremendous in the next 10 years.

Yours in welding

Niekie Jooste

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