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Business Impact

Web Pioneer Tries to Incubate a Second Digital Revolution

Twenty years ago, Brian Behlendorf helped kick-start the Web—now he’s betting the technology behind Bitcoin can make the world fairer.

Brian Behlendorf knows it’s a cliché for veteran technologists like himself to argue that society could be run much better if we just had the right software. He believes it anyway.

“I’ve been as frustrated as anybody in technology about how broken the world seems,” he says. “Corruption or bureaucracy or inefficiency are in some ways technology problems. Couldn’t this just be fixed?” he asks.

This summer Behlendorf made a bet that a technology has appeared that can solve some of those apparently human problems. Leaving a comfortable job as a venture capitalist working for early Facebook investor and billionaire Peter Thiel, he now leads the Hyperledger Project, a nonprofit in San Francisco created to support open-source development of blockchains, a type of database that underpins the digital currency Bitcoin by verifying and recording transactions.

Many governments and large companies are exploring blockchain technology not because they want to use digital currency—Bitcoin doesn’t look likely to become widely used—but as a way to work with other kinds of data. They think blockchains could make things as varied as financial trades, digital health records, and manufacturing supply chains more efficient and powerful.

A blockchain is a digital ledger that records transactions or other data over time. But records in a blockchain can be made effectively indelible using cryptography, and a blockchain can be designed to be operated by a group of companies or individuals together such that no single entity controls the system or its data.

That is seen as making it possible for companies to work together more easily. The argument goes that they can safely bring their data together on a shared neutral system, instead of keeping it locked away inside private internal systems. A recent survey of financial institutions, the first big industry to jump into this next generation of blockchain research, suggested the sector will spend $1 billion on blockchain initiatives this year.

Hyperledger exists to accelerate development of the software needed to get blockchains working, and has almost 100 corporate backers including IBM, J.P. Morgan, and Airbus. Behlendorf says that blockchains will have additional benefits beyond large corporate commerce. He’s had frustrating experiences trying to improve government and public infrastructure using technology, and says in retrospect blockchains would have helped.

After working on the Obama presidential campaign in 2008, Behlendorf joined a White House initiative to make government more transparent using technology. He later led a project at the Department of Health and Human Services trying to make it easier to move health records around, and served as chief technology officer for the World Economic Forum.

All these efforts would have benefited from a way to make trustworthy digital infrastructure that doesn’t centralize power with one company or authority, he says. The idea that converted him to the blockchain cause was using them to record land titles (something Sweden and the Republic of Georgia have considered). He likes that claims written into a blockchain should be quicker to verify and transfer. False ownership claims, or attempts by corrupt officials to manipulate records, should also be easier to detect if many different organizations, or even the public, can inspect that blockchain.

“Even in the most boring of circumstances, these technologies could lead to fairer, more objective outcomes for people up and down the economic stack,” says Behlendorf.

Behlendorf, 43, has a calm, friendly manner, a neat ponytail, and a track record of inventing and incubating technological infrastructure that helps transform society. In 1995 he helped launch the open-source Apache Web server, laying the foundation for the early growth of the World Wide Web.

Apache—and the community of developers Behlendorf nurtured to support it—still powers roughly half of all active websites. He wants Hyperledger’s blockchains to be similarly pervasive, if mostly invisible. “If we do our job right you won't ever hear about us,” he says. “We become plumbing.”

Hyperledger was founded in late 2015 by the Linux Foundation, which legally and financially supports the open-source operating system, on the premise that infrastructure designed to redefine how organizations interact would be best developed in public. “It needs to be a shared asset rather than a technology controlled by a single vendor,” says Chris Ferris, chief technology officer for open technologies at IBM, which was a founding member of the project.

One reason Behlendorf joined Hyperledger, he says, is that the current moment reminds him of 1995, when Apache was in the works and he had just helped launch the world’s first ad-supported website for Wired.

If you know where to look, the pieces are there to build something momentous, he says. “There’s this sense that there are major new business models and companies that could emerge from this,” says Behlendorf.

Building on his experience shepherding open-source communities, Behlendorf is trying to make Hyperledger into a home for many different blockchain technologies. The project will vet and select the best ideas and offer administrative support, but work on them will rely entirely on companies and individuals pitching in ideas and code.

The most mature plans for using blockchains aim to cut costs for financial institutions in tasks such as settling transactions involving bonds or other financial instruments. “All the back office stuff can be simpler and more reliable, and they can save a tremendous amount of money,” explains David Yermack, professor of finance at New York University. “Today there are a lot of people working in banks just checking the work of other people.”

Behlendorf is happy to be helping those efforts, but becomes more animated when talking about less conventional uses for financial blockchains. One example is a project—unconnected to Hyperledger—at Kenya’s Dadaab refugee camp using a blockchain to help residents establish a financial identity through their dealings with aid agencies. Behlendorf says this shows how the technology could widen access to banking.

Hyperledger itself formed a working group last month that will propose projects in health care. Making it easier for patients to move their medical records between providers is one area of interest. The government has spent billions to advance the idea of portable electronic health records. But progress has been slow because organizations see keeping patient data siloed as a competitive advantage. Attempts by Google and Microsoft to build repositories for health data have fallen flat.

Companies, researchers, and even the U.S. government are now considering how blockchains could break the deadlock. Behlendorf argues that the technology could create infrastructure that gives patients primary control over their data. “This is an industry that is in need of additional ideas on how to share,” he says.

Over the next year, experimentation from Hyperledger and others will start to provide more concrete evidence of whether the technology can deliver disruptive ideas like that, says Chris Curran, chief technologist at PwC, which is working with companies in finance and other sectors interested in blockchains. “We’re coming to a moment when we’ll find out if this really can reinvent industries,” he says.

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