This is epicenter episode, 161 with guest Marley Gray. This episode of epicenter is brought to you by Jack. Jack's is the user-friendly wallet that works across. All your devices and handles both big. Coins and ether, go to ja double x dot IO and embrace the future of cryptocurrency wallets. Hi, welcome to epicenter of the show. Our stocks about the Technologies projects and starts driving decentralization and the global blockchain Revolution. My name is Sebastian Juju and my
name is Brian sabean. Kraang we're here today with Molly, Gray, Marley is the principal program manager for blockchain at Microsoft Microsoft. As I'm sure many of you are aware has been very active. If in the blockchain space they sponsored a theorem def con last year and maybe this year again. You guys sponsor this here again? Yes, right twice. And they were one of the first or, you know, one of the first big tech companies to really get into the Block Chain space and
now finger Molly was. It was a key driver not. So thanks so much for joining us today. Your problem for having me So can you give us a little background? I think you've been at Microsoft for a long time. What was what have you been doing there? And how did your career kind of evolved to end up where it is today? So yeah, I'm working on my 17th year.
Microsoft and I started in Charlotte North Carolina so which is a banking Hub and the United States and came on in the financial services vertical and I was a trading floor application developer at the time and I quickly moved to to our developer platform evangelism team which is essentially when dotnet first came. Out. We were going around talking to software Architects and developers and explaining the intricacies of how dotnet worked and why you wanted to use it.
Why? It was better spent a lot of time, doing that. And then came back into financial services and ended up getting relocated and taking a job in New York City. To lower two years ago to run the Innovation Labs there. And that's where I picked up blockchain again, which is the first time I did. It was really wasn't aware when I was doing Bitcoin. Nobody really paid too much attention.
What's going on to the covers too much than just getting your cryptocurrency working and and unfortunately I lost my my private keys from very early on so I have some orphan Bitcoin out there, but picked it back up in 2015 and And incubated blockchain at Microsoft in New York and got pulled into actually build out our strategy. And now have a engineering team here in the product group, but then I had her and I'm leading up the design and architecture here for that.
So what was it about blockchain that fancied, triggered your interest. Well being in financial services there was a so much you have to do around settlement times and the pain around settlement in the pain Enterprise organizations go through what an audit is triggered.
It just identifying some of the things that that blockchain could solve and really was a smart contracts was the hook to be able to define the data that you're going to share with other people, but also behavior and intent.
So smart contracts in a large degree really kicked the interest in blockchain and overdrive because people started thinking of it in other ways than just a cryptocurrency So we started to see that more as a platform for delivering Innovation to businesses and and the way we do business and really break apart and simplify a lot of business processes that have evolved over decades. So that's that's what you're
really interested first. It was in financial services specifically in the derivatives Market, but now it's spawned into just about Every industry there is Brian mentioned earlier that Microsoft was one of the first companies to one of the first large companies, you know, the historical figure and and Tech the really dive in headfirst into blockchain
technology and infrastructure. Can you describe sort of a high level, what the strategy is for Microsoft with regards to blockchain and block changes service? Yeah, so we see blockchain is being very obvious like creatively destructive to a lot of our we have a huge Enterprise business and our customers are always coming to us asking for innovation ideas or ways. They can improve their Outreach to their customers, their products or their processes. And we saw this as an opportunity.
A lot of our customers were having a lot. Out of desire to at least try watching, which initially was very difficult to do and how do they even approach it? So, you know, our initial goal is to say, hey, let's make it easy for people to learn what watching is and to just get started and blockchain is a service. I launched it. Well, it's been over a year now.
Was it its main goal is just to make it easy for people to stand up. A private blockchain network and to start tinkering with it and learning it. And you know, we started out with a theorem but quickly customers wanted to try out Eros, which has been renamed but you know, multi-chain now we have chain and a whole bunch of different blockchains out there. So everybody wanted to try out the different different block chains and start to test them. And that's, that was the initial goal.
Now, we've greatly expanded that I'm sure we'll talk about that a bit later now, but that was, that was our primary goal to system Meet customer demand to allow them to do it. We felt like the cloud was a great place to do things. We call it the fail, fast fail cheap. Because, you know, I was going to build anything right out of the gate, that would make it the production that they would tinker and play and try something and fail miserably.
But With that low cost. So you just delete it and start all over again. And that's that was our initial design goal. I agree that that sort of that fail fast model is really valuable. I can today, I signed up for, for a sure, I think I'd done in a while back, but I never really gotten through it with it. But I saw him for a juror like I had a credits. I spun up my theory. Mm Network, it took about five minutes, you just basically set it up and it was really easy to
do, right? So, if I can see that, you know, having set up a guest node before iMac this was much more pleasurable is there so much more pleasant experience as a whole rather than having to install npm and node. And I like all this other stuff coffins really complex and buggy and you know, takes a long time just to get you off the ground.
So I think that for a lot of people getting started, I don't know if they're going that route, but it definitely looks like something really attractive for someone who wants to play. Around with like multi chain and right, you know, wants to wants
to get restored really quick. Yeah, so actually, we were quite surprised when we researching this to learn that as your the number of data centers that you have all around the world and how yeah, it seems like a like a massive Cloud infrastructure which I really was not aware of you talk about sort of, but perhaps just described for those who aren't familiar. What, what is azure And how how blockchains fit into the Azure
offering, right? So, Azure is our our Cloud platform and it is really targeted initially and it's always been targeted Enterprise market. And so we started to and also our own internal system. So our own being and Xbox Live and things like that. So we initially started to put data centers out there for initial redundancy speed of light issues. You know you want to have things close geographically dispersed and started to work with our Enterprise customers.
And a lot of the major concerns were not technical in nature, but more government-related. So we need two things in certain jurisdictions for data residency laws. So what we quickly found is, we would build these Footprints and we could put these massive data centers all over the world. But we started to find out all we need to put data centers in specific countries or specific regions and they also have to have a fault domain within that same region.
So it ended up we have over 100 data centers. Around the world where I think 39 different regions which is actually larger than our tool. Closest competitors, combined and its really targeted at what we have a jurisdictional issue with enough, Custer, man, we're going to put in service our customers there. And the interesting point is all those data centers are linked with our own dark fiber. So we actually have second-largest dark, fiber Network outside of government where we live.
So it's a massive Network that you're not that you can go between data centers without touching a public network. And then we have this other piece. So this is that massive called, hyperscale Cloud to deliver
Computing on demand. And when we first launched, as you're actually overshot the market, we launched Azure with a platform as a service message where you didn't concern yourself with spinning up virtual machines, you just said, hey I need, I need a database, give me a database, get I want to stand up. This web app here's a web app and you just put your requirements in and behind-the-scenes. It would make sure that you have the right resources from a hardware and storage networking
perspective. And then AWS came out with what the market actually was was they weren't ready for next Generation applications and so they came out with infrastructure as a service. So then we quickly followed with that but now the markets of giving back into platform-as-a-service you sir. Is he a lot of talk about
serverless environments? Where you have this execution environment in the cloud where you can reach out and access capabilities or functions that you need without saying, I need it to run on this type of hardware on this operating system. You don't concern yourself with that. You basically. So this is what I do or this is what I need. I don't care how you get it to me. Just do it within these SLA, and I'm good to go.
Go. So, the Azure is that sort of worldwide Network where we're delivering data based on and meeting those restraints around data residency. Compliance security, our security compliance portfolio is the best in the business. So when you start to look at putting things in the cloud you have to have all those. There's a long list of checkboxes, you have to go through to get Enterprise customers, ready to start
putting data. And their biggest processing workloads out there and and that that we're starting to see customers moving moving in Mass certain workloads and we'll see more and more go through the net. New applications were starting to see being built with cloud in mind. And lastly as yours also hybrid so you can run something called Azure stack which is an on-premises private Cloud which Looks and feels and behaves just
like an Azure price. It's a like a setting up your own Data Center and your own or Azure cloud and your own data center. It looks like a region and it can burst out to the cloud for more compute resources or
storage and things like that. So it's that hybrid on-prem and public Cloud. If you go very interesting and you mentioned before that, part of the reason why, You guys got into blockchain was that a lot of Microsoft's clients and they wanted to try out blockchain and they were sort of looking to you guys to make that easier. But is there a larger thesis that Microsoft has about, you know, where technology and enterprise software is going over the next?
Maybe decade two decades, that informs how you guys are approaching blockchain and maybe not just right now. I want to comes to this experimental phase but also Beyond when we're going to go into production and actually you know big applications run on blockchain systems. But chain itself is forcing sort of a business process, re-engineering effort across Industries.
So because we're dealing with the Enterprise's of these Enterprises are moving away from business processes operating within their own four walls which is hard enough as it is getting interoperability large organization across applications. But now saying I want to be able to have that same interoperability between my most fierce competitor and throughout an entire supply chain.
How do I do that? And before you really have that option because you didn't have a shared truth, like the blockchain to be able to share that data and have one place to go for reconciliation to see where the process of business processes that crosses organizational boundaries which is essentially everything in this global economy. And it touches every every industry. So with that we said, okay well kind of backed into the cloud being and blockchain initial at a first glance.
People said well, why would you do blockchain in the cloud? And it's at first, it does seem seem counterintuitive, but if you think of what the cloud is, the cloud is essentially a massive distributed system, we're going these massive data Data centers all over the place, but your you have different levels of distribution, right? You just you distribute things for different reasons, distribute, things for
disasters, right? I don't want to have all my data centers and Lower Manhattan, that happened in 9/11, and that was a problem, right? So you need to have redundancy outside of a geographic area, you need to have data residing in different areas. So there's, you know, all that flexibility, but We started looking at that. We said, okay, customers are going to start wanting to move to what we call the collaborative economy, where you you work with each other and it's a part of the business
process. So, Cross organization distributed workflows is we look at supply chain, it's a very complex business process. Lots of infrastructure. Required is a ton of overhead and friction in any supply chain. NG whether you're manufacturing a product and getting parts, from a thousand different suppliers which are actually cascaded down. So smaller suppliers, or you're producing a movie very similar, you have a supply chain and how do you manage that?
And then how do you audit that? And we saw that as a fundamental shift to provide not only that cross-organizational workflow and shared data and shared execution and Trust sort of distributed trust but then it sort of changes everything on the back end to because now you have visibility into your business processes and where they're in efficiencies, you can catch fraud a lot easier, you can optimize a lot better.
So you know, our customers initial stance is hey, Rethinking the way we're actually doing this business process. We haven't Revisited 20 years with this technology so we think it's a fundamental shift and we're really ramping our platforms to work in this distributed. Not it's not just data distributions, people think too much about distributed compute. The stripping of data but really is distributed trust. And and moving looking at your, your business processes.
And distributing them but having disability out of where they are at any given time very seamlessly. I think that's a great way of explaining right, essentially, the underlying thesis, that that is in a big part of the Block Chain space. You know, that was sort of the thesis or the AC thesis a Terrace monads, but all kinds of companies in this space, right? Like the whole etherium for business or even public, ethereum is also about exactly
that process automation stuff. But if we agree that this is the big, the big Trend that is going. Happened. I would be really curious about your perspective. Why are the other big tech companies like Google? Apple Amazon? Maybe? Facebook are they doing something but they just don't talk about it. Or do they have a different pieces? That means they, they don't see it the same way and they don't feel like they have to take action and move in this direction. What do you think?
I think it has more to do with the DNA. May of the organization. If you look at the two big Tecna companies that are doing a lot in blotchiness, it's Microsoft and IBM and we're firmly rooted in the Enterprise even though blockchain evolved out of a cryptocurrency.
So you have this sort of wide quickly jump over to Enterprise it's because it's solved a problem in a very unique way and stood the test of time even though people shot holes in it and then are prizes quickly said, wow, this is going to change, this could change How We Do. This is completely some of them when they fully understood it. Depending on the business. Either have a near-death experience, meaning that there are middlemen that they don't
provide much value. Other than friction, into existing business process, that could be completely disintegrated, or they saw opportunity and usually company, see both opportunity to reinvent themselves.
A lot of companies, we talked to, in the Enterprise, they see this as a catalyst, it's not pure technology is It doesn't solve every problem, but it provides that Catalyst opportunity to revisit because Microsoft and IBM are so focused on delivering value in the Enterprise and working with businesses on different ways, right? So IBM really has a massive Human Services business where we're really focused on the software.
We're not trying to sell Consulting Services, we rely on our partners to do, but that's that's why you saw us doing that. I think the reason Not seeing AWS and Google is they don't have that Enterprise Focus, Amazon will probably, I mean I can't really speak for where they are and what they're doing but I think that's why you see sort of this while we got out front, will they catch up? I'm sure they will once you get into their get into that.
But the actual customer demand. We're getting it from these Enterprise customers and that's why we go First, I'd like to say it was we're so Visionary, but it's really a little bit more simple than that. And you think that's going to remain like that in the near medium-term future that the most activity and interest is on the Enterprise side as opposed to, to Consumer facing side. I think it will the evolution of
the two will come. I think we're going to go through, is the Enterprises will stand up distributed. Ledger is no, probably a bunch of them. The public. Ledger's will provide an interesting back then, and that will start to see interoperability happening. Using the public network as a bridging mechanism. For assets, are traversing between watching for example, or even smart contracts to bind themselves together. Even though they have no
awareness of the other network. So, the public networks become very interesting sort of utility common infrastructure and then these Consortium Enterprise blockchains tapping into those. I think is a very interesting way to see this evolved and eventually get to the point where we flatten these things
out. We have this Ledger that even though it's not one Ledger when I have this one, massive worldwide database that has an identity for Verything and tracks every business process, but we have a way to navigate a hierarchy or, or you know, a mesh of these these blockchains or distributed letters as the evolved. So I think we will see for the next couple of years, just from a effort and where people making a lot of bets, and being
employed. And, and looking at solving hard problems, I think it's going to be an Enterprise first. I think, you know, there was still sort of waiting on that consumer facing, you know, Uber or Airbnb scenario. But if you look at those things, I think it might be those things will pop up, once you get industry-specific blockchains, and then those will be ones that cross those industry blockchains. The solve a unique problem that involves Financial Services Healthcare and iot for Example
that would be a killer app. It's really the composite of this. So we're just building basic Plumbing now and within single Industries, once you start going across industry that's where you see, we'll start to see these really killer apps that come out, I think.
Now, before we go into a Bletchley and a little bit more detail, what Microsoft's you know, blockchain efforts going to look like I wanted to bring up a concern that I think a lot of people have and I saw that mentioned somewhere, maybe it was a comment in front of you talks as well.
So one of the simple premise of blockchain is this idea of decentralization, decentralized Control, decentralized process Saying how do you how does that play with something like a seizure which is a, you know, a centralized infrastructure provider that really also lives on economies of scale. Do you think, you know, what's the role here in terms of in while the technology is being developed? And how do you think that's going to change?
When some of this technology and these blockchains are going to go into production? So we talked about blockchains and Azure, we say you don't most customers are going to run their entire Block Chain, unless you're just doing Devon test, right when you're going into production, very few Enterprises, even though they love us and they want to use Azure from a risk standpoint, they want to spread their risk. So they'll say, well, we need to have multiple multiple providers
of this network. So you would put certain number of nodes and, and Azure, you can put some number, a double. Yes. You have certain in your data centers. So when we look at the blockchain layer itself because the consensus algorithms and the database gets propagated invalidated between nodes regardless of where they live. That's the model that we would love people to have all their nodes and blockchain, but that's not the reality and so we don't have any dependency.
You can actually Use Bletchley without having a single node in Azure and and just call up to those services from wherever you are because it's just something out there in the cloud.
So when we say we look at Azure as being the distributed, sort of fabric for that sort of distributed execution model and not necessarily the place where the Ledger Exists even though, you know, Azure is a distributed system, it's all around the world but like I said, there's different levels of distribution and that in that case you might have a Enterprises need to make sure that they spread their their nodes across multiple
providers. And and its really gets multiple counter parties because you might have certain counterparties and I Financial Services blockchain That on Azure customers. For example there, you know and IBM, those nodes will still work on the same network. Let's take a short break to talk about Jax. Jax is a multi coin wallet created by the people at the central. Now, in the past, if you had a whole bunch of cryptocurrencies, it was a pain to handle them.
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So moving on to Bletchley, there's a white paper that you authored, which is available on GitHub, will put the links in the show notes which is called The Bletchley white paper. And in this white paper you discuss some of the evolution from watching 1.02 want blockchain 2.0 the blushing 1.0 being the sort of UTech so Bitcoin style blockchain.
And then moving on from that, we saw the technology evolves Into smart contract languages with aetherium and now into a new era which is what you're calling blockchain 3.0. Could you talk about the evolution between these different versions of blockchain Technologies? Sure. Yeah, so you take so it was a was built for a specific use case.
So it was built specifically for a cryptocurrency which is essentially Providence seeing a cryptocurrency transferring A ship and being able to make change. So it was built. And it does that very well. And it's we like to think of you txo, if it's, if your, if your applications are only dealing with Bearer instruments. So you're proving ownership proving lineage and transferring of assets. Then that model works.
Very, very well and but it's somewhat restricted because an individual Bitcoin doesn't have an ID. It's just a sum of UT EXO's. And when you spend a Bitcoin, it it's, you know, is still along with the same. It's just spread out as other you g EXO's. Well, when ethereum came out and they introduced smart contracts, it introduced some, some key innovations that the first of
which was it had an identity. So, smart contract is essentially an account that persists So I can have an address and a sign of the identity to something. So I know it's going to be there. And I can also Define schema where as you TXS systems are essentially. I mean it, you can have properties in your transaction and asset but it doesn't have a strongly typed schema, which we found very interesting to be able to Define define schema and then it can have Behavior.
And the behavior piece was the smart contract specified argue that. It's actually there's three. Things together the identity building have schema and then having code or logic there and that was super interesting in that you could start to write these programs and do interesting things as an Enterprise developer that that
grew up in that. Well, I went from writing client-server applications to having a right three-tiered applications learn some painful lessons about how we manage State and scale and separation of concerns to make sure that you can version things independently. And we learned a lot of painful lessons in the the 90s and the early 2000s, how to build applications web applications that could that could scale and and and serve the internet.
So when looked at smart contracts so this is a great way of of really doing other things on a block. Chain. However, I don't think it's going to scale to, you know, massive even private blockchains that have millions of millions of millions of smart contracts running on the network at once. So immediately, just went and said, okay, let's decompose what a smart contract actually is.
And if we look at that, it's you have defined your schema, which includes the properties that you're tracking and those could be The example, I always give us with a loan. So if you take out a loan, maybe it's a mortgage. You have a mount your borrowing. So that's how much you're boring. You have an interest rate of a term and you'll have a that interest rate could be variable,
right? So you could get a fixed length 1 and that's the case, then it's doesn't change, but you can have a variable interest rate and then you have some rules about When what's your payment? When's it due. What what's the penalty? If you pay it late? And then what's the big penalty? If you really go late, you know about foreclosure. Those are basically legal Clauses and at the end of it, if you've ever taken on a mortgage, you get an amortization schedule which is essentially predicting
your future state. If you make every payment, this is how much principal is going to be over. A 30-year period if the 30 year loan. Now, if it's a float, Floating interest rate that amortization schedule, can vary based on how your interest rate can go up or down and things like that. But that's essentially contract. And we said, okay? What portions of that need to
be? If I was going to take this smart contract to say, I don't want all this stuff to be bundled into this one piece of code data, all intermingled on a node. And when I have 1000 node Network that, Smart contract runs a thousand times to do the same thing when I don't necessarily need that kind of behavior. I want to be able to take out portions of it. So we said okay, what if you could say, keep the schema keep some logic that just validates
your data. So like store procedures, like type of behaviors for relational databases where you're not putting business logic, but you're just validating inputs before you commit to the database. So we could validate signatures and Like and then record the basic static properties. Like the amount, you're borrowing signatures of the lender and the borrower, those are important but to capture but then the Clauses themselves that the payment the rate that they might need to be recalculated.
And then the conditions of is it late or not? And then how did that that payment? Apply that logic? It can be pulled out and executed somewhere else as long as we can execute it. And then a test that it actually does what it's supposed to do. And, and we can guarantee that it will run. So that's we said, okay, let's let's talk take a different differently about finding what a smart contract is in a sense. It's taking what you T. XO BAE Systems always did, right? They didn't have a smart
contracted to find schema. They always built these Applications on top that had all the business logic but they were scheme of sole on the bottom and it's hard to share that stuff across without using op codes and things like that.
Whereas, this is a little cleaner and it, it feels like it is built sort of Enterprises for me to have strongly type schema, some logic that can execute a smart contract to validate my transactions, but then raise up any logic that doesn't necessarily have to be on the blockchain and can be We had one of the shared environment by all the counterparties and get better performance and scale and all that good stuff.
Okay, so I think you sort of started to explain it with your, with your answer, what we'll get to in a bit, which is which is Bletchley. But if I can just rephrase that in the way that I conceptualize it as a, with this idea of blockchain 3.0 that that Bletchley introduces. What you're essentially doing is rather than having all of your
smart contract. Logic State storage and a distributed Network within one system, which is essentially what it would a theory, mm does you-you-you, decompose those components. So you decompose the business logic, you decompose you take out storage and you take out State and you take out all those components, you split them up and then once You once you have that base architecture, right? Where all of those components can be sort of module eyes.
I mean, sort of like application development today. We're now, you know, you have your database over here. You might have cloud storage over here. You may have some other component over here and they all interact together, but you're building this sort of moduli system. But then the other component that this introduces, is this idea that Rather than trusting all of this to a distributed Network where it's completely trustless, you can sort of pick and choose with every component.
What, where's the, where's the cursor? Right. So if you want your storage to be fully distributed, the you can rely on just on a fully distributed blockchain type you know public network to do that but perhaps some of those functions eating into smart cam those smart contracts don't need to Fully distributed, the you can trust some sort of trusted source to execute that logic and provide results, and that's okay. And the people, you know, the participants in that wet Network
agree on that. And like some interest rate. For instance is that sort of a good representation of what what he's trying to do. Yes, today's magic word is Bletchley blet CH L. Ey head over to. Let's talk that coin.com to sign. In enter the magic word and clean your part of a listener award. So then let's, let's talk about the architecture. Describe the blush, Li architecture for us if you may sure.
So at the bottom, when your provision one or more blockchains and so you can use the theorem, you could use chain, you could use core data, you could use your whatever. You can actually use multiple ones. So above that is this thing called the corporate fabric, which is actually, right now, we're running and what we call Azure service fabric, which is essentially a cloud runtime, that its tracks behind it could be X.
Number of Linux VMS index. Number one, does vm's depending on what you're using and they're sort of abstracted from you is Ben's up more and more resources as you as you go along. And it manages the instantiation lifecycle and fault tolerance of components that are running it. So this is that serverless environment that provides the runtime which we call the Cripple of fabric the crippled fabric itself. It is that runtime of you register blockchains with it.
You build cripple, its to run on top of it and triplets, are these discrete levels of functionality, there's different types, we have utility crew plaits, which are usually thought of as Oracle type triplets or Oracle triplets. We have contract triplets, which are taking that logic for a specific smart contract and That and within contract triplets, there's different types of contract triplets as well.
But those are the two basic types and you have the option of running these crippled its and an enclave. So they can run in a secure, isolated tamper-proof, environment that attests to the results so that they've they run, they ran and did what they say they did without you having to put The code on the blockchain, but rather just the attestation of the signature for guarantees that your logic ran as intended. So and then above that.
So crippled Fabrics poses up sort of an event-driven API to blockchains underneath it. So you can subscribe, if you have a smart contract, you can subscribe to an event, so like a market price. Every X minutes you can set. So time-based, you could say as a threshold. So let me know if oil goes above $40 a barrel or below and then and when it does give me this price in this index and then I'm going to do something on my Smart contract or you could do it based on. So that's threshold.
You could do it the other way around. You could also have them, subscribe. Two events to select your CRM system. So maybe your CRM system feeds into a kyc service that you're using an event that might happen in CRM. You want to flow in your kyc system to update your, your know, your customer system that you have there. So as a whole bunch of that exposes a surface level API as well above crippled, it's where you can expose a cripple its functionality to a front end or another system.
Get invoke report from the And have that transaction flow to the bottom. The other key piece that the crippled fabric does, is it abstracts the underlying distributed Ledger from the crippling. So, the cripple has no notion or no, real idea, it has a dependency on a specific Block Chain. It's just running trusted executed code and sending out signed Json payloads. Which then get additionally signed by an autoclave if necessary.
The crippled fabric then as it routes, it has bindings format messages for aetherium chain kurta. And the like, so it provides an abstraction for developers to not have to, especially if you're running reusable components, which is interesting. You can write these things as a cripple, it and have it work across all blockchains and not have to write one for each Block Chain, which makes it simpler Maybe an example for this.
I remember, once, I talked to a, we talked with a bank and dimension to issue of an interest rate swap, right? And the thing there is that there are some calculations that you want to be done. But, you know, calculations putting on a blockchain, doesn't work very well because they're just the poor performance isn't nearly good enough. So that will be a good case, for example, for a triplet, right?
So you would Define that function, you get executed on equipment and you can, you can If I, you know, as participants on and blockchain, you can see what was run in that Crypt, but you can see what data was used as input. What was the output? So, you know, I could, I could potentially run it myself. Check it. So you have, you know, you have lots of performance benefits. And potentially, as you mentioned, right?
You can you can have that crippled as its own sort of stand-alone almost like application providing kind of an API. So if we use different types of blockchain, you could always play Plug into that same thing is that that's kind of the what campus make possible, right? Yeah and you could also keep that algorithm secret so yeah you run it faster and you might have a IP in an algorithm that you don't want to share. So yeah it laws that as well.
So if you kept the algorithm secret do then you know I will be able to see the input the output but I wouldn't be able to replicate You know, if I was some other participant on a chain, I wouldn't be able to replicate that, right, right. Unless you subscribe to that same service. So from a and as far as the right into the blockchain, if you're just writing a value down and you can depending on the
level of trust that you have. So some kind of parties entering those things as perfectly fine with them. They they trust that algorithm maybe it's coming from a third party. So Comes from a Reuters, for example. And they say, you were just going to use that and we trust it it's going to sign with the signature that signature is actually based off the hash of the code that we all reviewed. So we can test that it ran the code that we all reviewed and that's the output.
So we trust it, but it, you know, maybe it runs in a co-located space for Optimal Performance and things like that. So, the Ripple guys wants to do this project which was shot down called koteas. Sounds very similar to triplets. Is it some of the same ideas or how did they differentiate it occurred is heavily influenced the the first approach, but actually the second approach. The first approach was for contract prevalence.
So, how do we, how do we pull logic out of a smart contract while keeping all the goodness of our Racks in the blockchain koteas, was, how do you do Sakura tested oracle's? And so, when we looked at various, I talked to the guys, a triple and and it was it, it was abandoned because it didn't have the ability to scale this, right? Worn a massive worldwide cloud provider to stand up this infrastructure and you know, said, hey, we are, I think we could probably deliver something like this.
It's not. We don't have the hardware yet, but it's coming. And let's go. Build the infrastructure. Such that. There's a lot of people that have value to inject and systems and give them a platform for exposing Oracle type behaviors in a cripple, it, that then Enterprises are comfortable consuming because you could have the best Oracle in the world, but if they don't process, it doesn't trust you.
They're not going to use it. So how do we, how do we empower the smaller innovators in the software partners that we have and marry them up to these? Large Enterprises that That that want their capabilities but don't know how to we can't have that Marketplace to bring them together. So, there's this idea of a crippling. I mean, it is some sort of an oracle, write it to a Smart contract. Anyway, the smart contracts use it as a source of data that the participants need to trust.
And before the show, we were talking about how that works. You can you explain for those who are saying? I mean I can hear the Reddit comments and Twitter comments already where people are like you know this is just An untrusted data being fed into a smart contract. This is ridiculous. Can you explain how a cripple? It can provide a trusted source of executed data.
So, if you take a cripple, it that would execute some function like, calculates, some sort of a maybe we can get into some use cases. But right, you know, a cryptic that calculates, some sort of a, some sort of a rate, which we go into, you know, the A long contract. How can the participants trust that? Cryptic like what is the software and Hardware configuration that enables them to trust it?
If I'm a smart contract developer, and I'm going to use Oracle crippling our utility crippling me, cuz it's going to provide me some result. It could be just a raw market price, or it could be a computed value, that that I just need to have for my smart contract. Well, when I do that, I'm essentially make a reference to that smart contract that I can
find. I mean, to that, crippled it, that I find in the each fabric has a A crippled Explorer where you can discover triplets what they do and you can subscribe to them. The subscription process is essentially creating a binding between your smart contract and the crippling the requirements that you have when you're buying in that way is you have to have a callback function because it's
an event. So it's a pub sub model so the smart contract is subscribing to that IT wires up the trust that says it's only going to accept messages from this. Rippling address. So the crippled it signs it has an identity and it's signs. It's messages with that signature so you can trust. That's just one level of trust that the crippling can also be running an enclave. Like I said it could be if you want that level not that every krimpet needs that for most utility cripples unless it's
doing encryption. It's probably not worth doing it because you really have any secrets there you just sort of unless your algorithm secretly want to run it in an autoclave. You can But essentially that you subscribe to it, you say these are my this is what I want you to let me know. Let me know if the markets were open at day and it's 4:00 Eastern Standard Time. I Want To Know 9:00 a.m. eastern standard time and 4:00 Eastern Standard Time.
I want you to give me the Libor rate and the price of this commodity or this list of Commodities. And so the crippled will say okay I'll let you know and the crippled Goes out and runs. It runs in the fabric, the fabric, make sure that that crippled it is running that it is always an instance of it that will fire your event. It will, if something goes wrong, it'll fire up another instance. It's so that you're guaranteed
to get that event. It will evaluate the conditions of the event, you subscribe to, and if it's true, it will get
those values. It will sign its payload, if it's running and it will send that message, back through the back of the Fabric which will send it into the blockchain and that case it's sending it. You'll have to send that successfully idempotent lie, if you will, to a single node, that will go to that smart contract and then that will get executed and sent around the rest of the network.
That's the simplest mode. That's the Oracle contract previously people would do oracle's and they would inject or Close to a separate smart contract and then you're smart contract, would watch that other smart contract and you would look at local events on the blockchain.
This is more saying, okay, I'm delegating that pubsub model where the events can happen out in the real world and be injected directly to me so that I don't have this other smart contract out there and this intermediary. That's there. You can still do that.
There's nothing stopping Being someone from doing a queuing mechanism, like that for a smart contract, in a triplet as well, but you can do that straight binding between a smart contract, address a callback function, and the crippled it for an oracle cripple. It. So, that's, that's the sort of the, that easy, the easy case. The, the contract triplet is or control crippled is the pattern.
We call is where you're taking that logic out, you're not just getting The previous example, you're just getting a market data, price, or some calculation performed, and then you're actually executing other logical.
You're smart contract and persisting that if we don't need that to happen, if we could actually do all of that logic and just write the results back we can then up shift and move all that smart contract code up into a cripple it and the crippled it can then have a subscription to the market data of grip but that's maybe firing that How's the cripples can talk to each other? So I can subscribe to other cripple its events that might be providing Oracle capabilities.
So it would give me at signed payload. And then I would execute my Logic for my specific smart contract in that crippled it and then write the results out now. Contract, triplets are mostly usually going to be running an enclave. So The Enclave will attest that it ran in The Enclave. Unmodified at the results are
guaranteed and right. Right, that back down to the Block Chain. So the Block Chain, you'll have the results of the computation of the smart contract and then you'll have the signatures of the crippling and The Enclave. So, you'll be able to have that full trust audit capability between the counterparties, which is how a contract crippled or Okay, so it really all comes down to the level of trust that
you have. And in this crippling, I mean, I think that for for a lot of Enterprises, this will make sense because you know, there we're operating in a system that are there are rules and Regulation and and a prize tend to trust each other when they are operating within the blanket of Regulation. And it seems to me like you can then based on your needs on the specific use case that you're building you can set that cursor for trust, right?
So if if you need specific application logic to be distributed and because we need to be operating in sort of a trust list way amongst each other. Other and, you know, these specific functions need to operate on a blockchain because that's the only way that we can achieve this trustless. Then that will that will suffice
for needs. Yep. However, for other functions, or other pieces of data, rather than relying on say, like a prediction Market, to retrieve the data, we're going to rely on a crippled, it operated on an operating, on an enclave, where we have the audit Trail for Our provisioning of the keys provisioning of the business logic and functions themselves. We can trace that we know it's happening on an enclave, though. There's a high, there's a high
likelihood. There's a low likelihood that that will get hacked or, you know, there's the exploited and then so therefore we have a high level of trust in those results because we're operating in this, former lies regulated, Ecosystem or framework. And where do you think this will go? Then is its It's quite a ways away from intellectually from etherium.
Yeah, yeah. Watching Technologies of a distribute everything distributed, you know, the application stack with ethereum ipfs Beach, ND, B, you know, we're truck. We're completely trustless. That's quite a ways away from that, but it seems like it's enabled by technologies that perhaps aren't Well available yet. Like that are not really commoditized, such as enclaves. Where do you see that going?
Like, where do you see this going in the next 10 years with regards to I'll block chains and these centralized Technologies but highly trusted technology is, how will they interact together? Yeah, I think it's a really good point. I mean, that's a design choice and and what we're trying to do is inject that design choice in there. So if you are on the completely, trust this environment smart having your logic in the smart contract is the the most appropriate way for you to to do
that. But in the semi trusted environment switch these Um, blockchains are this gives you that design as a software developer, and architect? You go and say, well, we're just the right place for me to do this based on the requirements and, and sort of move it based on that, trust pendulum, but also on the Privacy pendulum. So again if you have algorithms that are that need to be
private. If I have very complex counterparty multi counterparty, Contracts where each counter party has to maintain Secrets, all validating the state in participating in transaction. The crippled its provides a great framework for doing that. So I think what we'll see is as we start to roll out the crib but Fabric and you'll be able to spin up enclaves on demand. So as a developer, you really don't have to think about. I don't know how to write an enclave for this chip architecture.
It's simply a property that you checks is enclaved or not. And you're crippled it, it's actually getting all that services from a rapper. Anyway so you get that and it sort of commoditizing easy to do. Now was who wrote start to roll that out. When want you to put everything in an enclave, if it's not required because it is a more expensive, it will be a more expensive because it's option. So you want to do it kind of selectively but it's a good tool.
For doing that, I think. Is it, it rolls out of becomes warm, or Commodities will start to see on claiming being used, Donna Leon in the cloud, but on desktops, and on mobile devices as well. So we already have on claiming on phones, a good bet. We have it on most until desktop PCS that are Generation, 6 have enclave and capabilities whether or not the bias supports it or not.
So was We'll start to move this. This type of secure execution will come more and more prevalent that the differences in the cloud is it's on demand at hyperscale and you only pay for what you use, you don't have to go out and buy all these this hardware and stuff. So I think it's going to be help the evolution of applications and we'll start to see more more capabilities come together, but you still sort of need that that we get the Best of Both Worlds. See a developer and public
etherium. You can then start developing Enterprise applications, but still use a lot of the same tools. You purchase things with a very similar mindset that the difference is, is you start to say, might call my logic is distributed different than my data in my state and it's done it. Different, trust levels, whether it's completely, trustless are semi trusted, Two very discretionary trusts and the
execution layer. Cool. One of the main ways of monetization, as far as I understand with Azure is simply that, you know, I'm putting my application on Azure. I'm using up some computational resources and I'm kind of paying by the computational step and I can certainly see how that will continue to be a role. But they say okay we make Azure the best platform for blocked in
applications in that way. You're going to get more usage, but are there also some novel different business models that you guys see emerging with blockchain on Azure you have been so for Bletchley we would spend a lot of time talking about crippled its but there's also some core crippled at libraries that will be shipping and these will be this is functionality that we're exposing and Bletchley.
These are the ones that are most commonly asked for one is identity so that is identity and key. A management we kind of paired together because they're very similar. So we have a an Azure, we have something called Azure active directory, we have over, 800 million unique identities, within Azure active directory, is the standard for Enterprises to use active directories. It does Federation has a lot of things out of the box for you multi-factor authentication and things like that.
So we're going to be providing that as a as a library as a service. For distributed ledger. So it'll be a part of the crippled Fabric and keep management as well. So issuing Keys manage the lifecycle of keys like key expiration key renewal. This type of things are pretty hard to do. We've got a lot of experience in doing that and you tie that with active directory and you start to have the ability to provision Keys based on someone's identity and start to provision things
remotely. So you can Have nodes. Join a Consortium blockchain. As long as you have the right credentials, you can have a node. Join a particular Block Chain and the certificates for that know to participate in that will be delivered through that same infrastructure. So we're actually standing on the shoulders of giants hear that stuff that's evolved over.
25 years. So Azure active directory is a piece of that the other pieces Key Management something, called key vault which is our globally distributed hsms. The other one is Around cryptographic services. So we'll have libraries out there available to you if you want to use homomorphic encryption zero, knowledge proof, all sorts of things will be sort of libraries that are available there as well as a more distributed application patterns. So we call this Gateway services
so things like that. BTC relay for a theorem to bitcoin that can be put in that. Gateway, you can write your own. Multi Block Chain integration pieces but it has a distributed transaction coordinator and it has a distributed Ledger resource transaction compensation. So if you've ever seen how resource transaction happens, compensation on a relational database. It can roll transactions back, we can't do that on a
blockchain. So we have to post corrective transaction so it's a modified version of that but there's Enterprise development patterns for Complex transactions are being exposed there and those again are things that evolved through products like this talk. And to allow your Block Chain systems to work with the rest of the Enterprise, whether you have an Enterprise service bus, or any type of product, plug it in, and make it a first-class citizen on those networks.
Okay, cool. Well, Marley, we're at the end of our episodes are, but thanks so much for coming on and sharing your bit about Microsoft's Vision, when it comes to blockchain and the work. You guys have been doing with Bletchley. Thanks. Yeah. I think it will be very interesting to see know not just how this plays out once and prices really utilize. Some of these tools that you guys are building, that others
are building. And then we're really going to see how that transforms the nature organizations, and how they work in the fabric of business processes, down down the line. I think that would be very interesting to see So, we have, if that we're at the end of our episode, we are absent as part of telescopic Network. You can find this show and other shows on, let's open, kind of calm. And, of course, we, if you want to help the show them, please leave us in iTunes, from you.
I help you people find the show. So thanks so much for those who do that. And yeah, with that, we at the end and we look forward to being back next week.