As Ethereum lands on AWS Managed Blockchain, what are the uses cases?
"Decentralised finance and non-fungible tokens are popular use cases."
One is the "world's programmable blockchain" behind a proudly decentralised, sprawling marketplace of financial services, games and applications "that can't steal your data or censor you." Among its touted use cases is "decentralised autonomous organisations". The other is a cloud juggernaut owned by one of the world's richest men and a locus of organisationally centralised global computing power. They seem unusual bedfellows.
With Ethereum -- as of March 1 -- GA on Amazon's AWS Managed Blockchain, The Stack took a closer look.
Ethereum on AWS: Why use it?
To Amazon, the case is simple: much like any other managed service, customers want an "in", but don't want the headache of running operations. As AWS notes: "As customers build... Ethereum-based applications, they find it complicated and time-consuming to operate and manage their Ethereum infrastructure."
The company adds: "Specific concerns include data reliability due to out-of-sync nodes, data storage scaling challenges, and time-sensitive Ethereum software upgrades."
Who's using it?
Asked for a current use case and customer for Ethereum on AWS, the hyperscaler put forward Doug Leonard, CEO of HiFi Finance -- a company which enables fixed-rate lending and borrowing by tokenising on-chain debt (backed by the collateral of ETH, or the Ethereum cryptocurrency).
Leonard told The Stack: "Hifi uses Ethereum on Amazon Managed Blockchain to power our internal BI dashboards. Businesses that are deeply dependent on blockchain have a unique set of challenges. One challenge, in particular, is accurately accounting for the business tax basis and liability.
"Since every blockchain transaction is in part financial in nature, we needed a system that enabled our team to experiment freely on-chain without slowing down the pace of innovation from the back-office burden those experiments created. Our BI dashboards track essential metrics on everything from our lending protocol down to individual on-chain transactions. By automating our systems internally and connecting our BI dashboards to on-chain data, with Ethereum on Amazon Managed Blockchain, we enable our decision-makers with real-time data and our accountants with perfect financial accounting of our on-chain business activities.
He added: "Our accountants love us because we can provide a perfect accounting for our on-chain business activities and our decision makers use the dashboards daily to gain insight and perspective in real time."
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Herain Oberoi, GM, Blockchain, Database, and Analytics Marketing, AWS, adds: "Based on early customer conversations, decentralized finance (DeFi) and non-fungible tokens (NFTs) are emerging as popular use cases for Ethereum. DeFi is a network of financial applications built on top of blockchain networks. It is different from existing financial networks because it is open and programmable, operates without a central authority (such as banks and clearing houses), and enables developers to offer new models for payments, investing, lending and trading. By using smart contracts and distributed systems, customers can build secure decentralized financial applications with ease. For example, DeFi companies are already offering products that enable peer-to-peer lending and borrowing, earning interest on cryptocurrency holdings, trading via decentralized exchanges, and much more. Some popular DeFi platforms include Compound, Aave, UniSwap, and MakerDAO.
"Non-Fungible Tokens (NFTs) - NFTs are unique and indivisible digital tokens that can't be broken down into smaller parts. They are useful for proving the provenance of rare assets, both digital and tangible. For example, NFTs can be used by an artist to tokenize their work and ensure that their work is unique and belongs to them. The ownership information is recorded and maintained on the blockchain network. NFTs are also gaining popularity in the gaming industry because they allow interoperability between gaming platforms."
He adds: "For instance, the first NFT project on Ethereum was CryptoKitties, which enabled customers to collect digital cat collectibles backed using NFTs. “Gods Unchained” is a card game that gives players full ownership of their in-game items using NFTs. NFTs are gaining popularity as more companies look to tokenize assets and provide users with tamper-proof lineage information about their assets."
Ethereum on AWS offers security confidence, he notes, with data remaining encrypted in transit and at rest: "Customers authenticate all Ethereum API calls to an Ethereum node on AMB using the AWS Signature Version 4 signing process. Additionally, AMB is also integrated with AWS CloudTrail, a service that records all actions taken by a user or an AWS service in AMB. In terms of resiliency, AMB provides durable elastic storage for ledger data, monitors node health, replaces unhealthy nodes, and automates Ethereum client software upgrades, improving the availability and resiliency of customers' Ethereum infrastructure."
In short, while running a decentralised service on a centralised managed service might appear odd at first glance, it's just removing heavy lifting and adding flexibility, AWS claims, with customers able to easily provision Ethereum nodes in minutes, while still connecting to the public Ethereum main network (as well as test networks like Rinkeby and Ropsten), while automatically scaling storage, and adding node health monitoring and automated Ethereum software upgrades. Ultimately, customers can continue to transact via the Ethereum public peer-to-peer network, AWS's Herain Oberoi adds; they're not relinquishing outright control.
