“It was very clear that collaborating and contributing to various blockchain ecosystems was the best way to accelerate our value creation. The first years had bitter roots, but sweeter fruits. With so many moving parts in this space — optionality is key!” — Jonathan Levi
At times, what’s heralded as the greatest breakthrough of distributed ledger technology — its ability to store information transparently and publicly — can also prove a significant drawback. The ability to record transaction history on an open blockchain is very powerful, but without the right access control features to prevent unauthorized parties from viewing data, distributed ledgers are a non-starter for some organizations. Yet, blockchains are extremely effective in allowing enterprises to interact with trust and relevant transparency.
But by focusing on highly secure and scalable access control, authorization and auditing features for blockchains, HACERA is seeking to make distributed ledgers usable for organizations that require tight control over who can see the data that they place on the blockchain. Furthermore, HACERA has dedicated itself to solving cross-chain interoperability to bring public chain technology to the enterprise space, particularly among the leading blockchain platforms, including Hyperledger Fabric, Ethereum and others, using very strong cryptography for identity protection.
This approach puts HACERA among the handful of companies that are leading the charge to bring blockchain technology to the enterprise world in a major way.
Realizing a Compliance-Friendly Blockchain
Jonathan Levi, a computer scientist and former executive director of core quantitative strategies at Goldman Sachs, founded HACERA while still in graduate school at Stanford in 2014. At the time, Levi was avidly experienced with blockchain technology as a Bitcoin core contributor in the project’s early days. Eventually, he turned his aim to enterprise markets. He launched HACERA with the goal of helping institutions meet regulatory requirements when they adopted blockchain technology.
That was a relatively novel concept at the time. Bitcoin dominated the world of blockchain technology in 2015, and few Bitcoin stakeholders were concerned with staying on the right side of regulators.
“When I talked about know your customer [KYC], anti-money laundering [AML] and the need to go through all the mandatory due-diligence procedures that many regulated sectors are subject to, people in the Bitcoin community thought I was crazy,” Levi recalled.
In early 2016, IBM and other sponsors of the Linux Foundation’s Hyperledger Fabric project were happy to have Levi’s company helping develop the platform through IBM’s security research department.
“It was very clear that regulated entities needed a permissioned blockchain,” according to Levi. “At the same time, we already had our secure layer for authenti- cation, authorization and auditing services to blockchains.”
Access Control for Distributed Ledgers
Working with the Hyperledger Project prominently exposed HACERA to the entire growing ecosystem of enterprise-focused blockchain solutions. Today, HACERA focuses on solving two distinct challenges.
The first is the issue of access control for data that is stored on a blockchain. HACERA provides the ability to set access control policies in a granular way for data on a distributed ledger.
“It’s a highly secure approach to enabling companies to share transaction history across a distributed ledger, but ensuring that specific data about the transaction is only viewable to those participants who are authorized to view it,” Levi explained.
As noted above, this type of solution addresses a deeply embedded challenge within blockchain technology. A blockchain is powerful because it allows data to be stored openly and transparently, minimizing the risk of fraud. Yet for some use cases, it is important to ensure that the data itself cannot be read by anyone who has access to the blockchain — which, in the case of most major blockchains, means anyone in the world, because they are public, decentralized ledgers. HACERA enables companies to leverage the transparency of public distributed ledgers without compromising data security.
HACERA’s second chief value offering is integrating data and transactions between Ethereum, Hyperledger Fabric and other leading blockchains. Those first two blockchains have garnered the greatest attention from leading enterprises thus far, Levi said, and the ability to share information across blockchains is important for companies that want to avoid being locked into one platform or that wish to leverage both blockchains within the same application or workflow.
“We believe that the near-term enterprise ecosystem will be inhabited by multiple permissioned chains, and our strong conviction is that Hyperledger Fabric and
Ethereum are the most robust platforms available for enterprise adoption, so we took an early stage approach at ensuring blockchain platforms could communicate with each other no matter which platform was used,” Levi explained.
Ensuring Compliance Through Privacy and Confidentiality
Staying ahead of compliance requirements as regulators turn an increasing amount of attention to blockchain technology remains a core focus for HACERA.
“We’re participating and contributing on the regulatory front,” Levi said. “We’re very accustomed to highly regulated industries, having come from the banking world, and we expect our customers to expect a structured regulatory environment and demand compliance to that environment.”
Levi added that HACERA is designed not just to satisfy the requirements of the current regulatory landscape but also to remain effective if regulations related to blockchains become more rigid, which they likely will.
“Our approach to the entire HACERA platform anticipated a much more regulated environment than where we currently are,” Levi said. “HACERA can accommodate most of what we would expect to see in the coming months and years: More AML/KYC capabilities, more auditing transparency and, of course, the ability to ensure that data is secure with specific access control, policy enforcement and confidential transactions across blockchain platforms.”