The Sync NI team sat down with Mike Eller, Staff Software Engineer at Rakuten to discuss the company’s Blockchain technology as well as their journey in Belfast.
As a multi-billion dollar conglomerate Rakuten is well known around the world in many different industry sectors however in Belfast it is best known for developing world class blockchain technology. As a software engineer having worked for a number of large global corporations what specifically attracted you to Rakuten?
Rakuten doesn't have a big presence in the UK, but word travels fast in a small town like Belfast. Some ex-colleagues of mine that I respect were working in the Blockchain Lab. They talked about the team culture, and the talented engineers who work there. Its a relatively small close-knit team with a can-do attitude, but with the backing of a big global corporation. I have an interest in Blockchain Technology, and thought this would be a great chance to push myself to pick up a new technology.
At Rakuten's core is a desire to contribute to society by creating value. This aligns with my aim to make the world a better place through my work.
I have been impressed by Rakuten's response to the COVID19 crisis where they setup free-of-charge vaccination centres for residents of Setagaya Ward in Tokyo. In more recent times, Rakuten's founder Hiroshi Mikitani (Mickey) made a substantial personal donation to Ukraine for humanitarian aid.
For the layman can you give us a definition of blockchain and the principle on which blockchain technology is based on?
With a Blockchain, you can record information in a way that makes it pretty much impossible to change. You can think of it as a database (or ledger) where every participant in the network has an exact copy. New records (or blocks) are added to the database in a Qway that cannot be undone and existing records are preserved in their current form forever.
Defining the specific principles;
Immutable Ledger
Information in each record cannot be changed. This is because the record's digital signature (or hash) is included with the next record. This is what forms the chain.
Decentralised, Peer-to-peer
Communication between members of the network is direct, not through any central authority.
Distributed
Every member of the network has a complete copy of the database.
Consensus
There is a mechanism by which members of the network must agree with each other before a new record is added to the database.
Rules of the Network
The rules are enforced by software. The code for this software is generally freely available and can be examined by anyone. Each member of the network must run their own copy of the software.
When people think of blockchain they often think of Bitcoins and digital wallets. How is Blockchain Different from Banking Ledgers?
Banking ledgers are centralised whereas blockchains are usually decentralised to some degree. With a banking ledger, a single entity is usually responsible for the control for the ledger. This includes, among other things, controlling who will be represented on the ledger and how, who can access the ledger, which updates are valid and how should the ledger be secured. This system is built on trust. As a customer we trust that the bank will look after our money, allow us to access it and process our incoming and outgoing transactions.
Blockchains can offer an alternative where this trust is not required. The system is controlled and secured by the network participants. The more decentralised the network, the less trust is required in any particular participant.
Beyond Bitcoin there are multiple uses for the technology in modern life. Can you provide some examples of how the technology has revolutionised some sectors of industry?
DeFi (Decentralised Finance) is having a big impact in the financial services industry, providing open access to borrowing and lending services, trading and speculation with many advantages over the traditional centralised services and markets. It is still a new and evolving area and carries significant risks but also great potential.
Outside of finance, it's is having a big impact on various industries such as supply chains and logistics (e.g TradeLens), provenance (e.g. Everledger) and medical records (e.g. MediChain), among others.
Equally can you share some examples of how blockchain has made tangible and positive impacts on our daily lives in recent years?
The first thing that comes to mind is the cryptocurrency donations to the Ukraine government, charities and people since the start of the war. Cryptocurrencies are allowing donations to be sent quickly and directly to where they are needed. The Washington Post reported $42 million in cryptocurrency in less than six days. The number has grown since.
Other examples include El Salvador becoming the first country to adopt bitcoin as legal tender, and the use of cryptocurrencies to escape some of the effects of hyperinflation in countries like Venezuela.
Looking beyond cryptocurrency, blockchain is giving people ownership of digital assets for the first time in the form of NFTs, which are shaking up not only the content industry but also gaming and marketing.
In the future, blockchain will become more and more ubiquitous in everyday life. Where do you think it will have the greatest impact and what are unrealised benefits so far that we can expect to see?
I think it is likely that the greatest impact of blockchain, specifically bitcoin, will be in facilitating the separation of money and state, where participation in the economy is open to anyone and the value of money not controlled by a central authority.
Second to this may be providing the means to regain control of our digital identities and our data. Self-sovereign identity and related concepts/technologies could allow people to interact online without the need to trust centralised organisations.
Governments and central banks in many countries are considering 'Central Bank Digital Currencies' (or CBDCs) with the goals of improving accessibility, convenience and financial security.
Encryption is a necessary feature of blockchain. Are all blockchains considered safe and secure and what safeguards are in place to ensure that bad actors cannot threaten the integrity of the data?
Contrary to popular belief, blockchain data is not encrypted by default. Records on the blockchain are however secured using cryptography. If you want to add data to a blockchain, you package it up in a transaction. Your transaction and private key (which only you know) are used to produce a digital signature of the transaction. There is a corresponding public key which is used to verify your transaction's signature on each node of the network.
If a transaction is altered, its digital signature will be invalid and the peer-to-peer network will know about it straight away.
A bad actor would need to be able to re-sign the tampered with transaction using your private key and also rewrite each subsequent block in the chain to change your data. Unfortunately for bad actors, the network is distributed. This means that as well as having access to your private key, the bad actor would need to control 51% or more of the network and make this change simultaneously on all the nodes they control.
It’s also worth mentioning there’s a risk that someone can attempt to spend the same cryptocurrency coin twice before the service provider realises that the coin has already been spent. This is not a problem inherent to blockchains, but rather to financial systems in general. This is why fiat systems like 'clearing' exist.
How does Belfast rank in terms of the global pecking order for developing blockchain technology?
I've observed a steady increase in the awareness and adoption of blockchain technology, particularly since the opening of the Rakuten Blockchain Lab in 2016. Cryptocurrency trading was the first thing people were talking about, then it was Decentralised Finance and more recently, it is all about NFTs and Web 3. The Belfast Blockchain Meetup group has grown to almost 800 members indicating the level of interest.
A quick search of blockchain related vacancies in Belfast returns a fairly small number of results, which suggests it is still very early days if you consider the LinkedIn research that show Blockchain jobs surged by 400% in 2021, 4x higher than other tech jobs. Civic Dollars is a community currency app, developed locally which runs on blockchain. The Rakuten Blockchain Lab have delivered Cryptocurrency Exchange and an NFT Marketplace, so you don’t get much better than that.
For anyone considering a new career in Blockchain what specific skills are required and desirable?
A Blockchain Engineer and a regular Software Engineer aren't that different. Knowledge of the software development lifecycle is a crucial skill. You should know each step you go through, from writing code, to testing, to deploying into production, and the various environments your software should go through. You'd definitely want to be able to write code in the company's programming language of choice.
A lot of systems these days run in the cloud. You'll likely need to work with Docker and Kubernetes and have a working knowledge of Cloud Providers, such as AWS, Azure or GCP. It would be desirable to know some DevOps principles, such as Infrastructure as Code or GitOps, along with knowledge of tools such as Terraform, Puppet and Helm.
Building an NFT platform on top of an existing enterprise blockchain is similar to integration with any other piece of infrastructure (for example a database). This is different of course to working on a blockchain protocol, which is effectively product development and comes with its own unique challenges. This would be different again to Smart contract authoring on the Ethereum Blockchain with Solidity.
I think in most cases, a willingness to learn and a can-do attitude will as well as a solid foundation in software engineering will take you further than you think.
