On Nov. 28, e-commerce giant Amazon announced two blockchain-related products: Amazon Quantum Ledger Database (QLDB) and Amazon Managed Blockchain. The company hence marked its further expansion into the field of blockchain technology, which started with blockchain-related patents and collaborations that Amazon has seemingly chose over working with cryptocurrencies, per se.
So what are those new projects and are they going to change the crypto industry?
QLDB: Cryptographic, but centralized database
As per Amazon’s website, QLDB is a ledger database designed to provide “transparent, immutable and cryptographically verifiable log of transactions,” which is overseen by “a central trusted authority.”
Thus, all changes are purportedly recorded on-chain, while the new product is also able to automatically scale to “execute 2–3X as many transactions than ledgers in common blockchain frameworks.” Indeed, Andy Jassy, the CEO of Amazon Web Services (AWS), reportedly stated that the QLDB “will be really scalable, you’ll have a much more flexible and robust set of APIs [application program interfaces] for you to make any kind of changes or adjustments to the ledger database.”
Additionally, QLDB allegedly uses a cryptographic hash function (SHA-256) to generate a secure output file of data’s change history, serving as a proof that “validates the integrity of data changes.”
“With QLDB, your data’s change history is immutable — it cannot be altered or deleted — and using cryptography, you can easily verify that there have been no unintended modifications to your application’s data,” according to the description on Amazon’s website.
Walter Montes, co-founder of the Costa Rican Blockchain Community, told Cointelegraph that — being a centralized product — QLDB cannot be compared to decentralized solutions, although it does attempt to do so in its roadmap:
“It makes no sense to compare things like transactions per second from a centralized service to a decentralized one. There are reasons why these things are decentralized and these are not merely technical ones. Amazon seems to miss the point by comparing QLDB with a blockchain.”
Even if one attempts to compare QLDB with permissioned blockchains, which are common among industry-level corporations because of their security, there are major distinctions between the two, says Montes:
“Permissioned blockchains handle cryptography in a decentralized way, which provides properties like historical evidence […] Another relevant point is the value of the smart contracts or chaincodes, which function as agreed and signed rules on how to modify the data. At least in the public information, they only address the immutability promise, but what about the governing rules of data? Without that, they only log whatever happens, with no real proactive control.”
That technically makes QLDB a database, argues Eyal Shani, a blockchain researcher and former software engineer, as well as Aykesubir consultant:
“QLDB is a normal database from that sense, [while] a blockchain database is also an immutable ledger […] the QLDB tech is another layer of software which eases the development of ledger-like software.”
Montes also agrees that QLDB resembles a conventional database, adding that its cryptography feature still makes it inferior to blockchains in terms of safety.
“Cryptography may calm down some users but doesn’t provide the security and robustness that a blockchain provides. [It is more] like a marketing tool.”
Moreover, the fact that there is a central authority overseeing the whole process might make it less reliable among competing businesses:
“Imagine six banks of the same size trusting one of them (a competitor) to hold a ‘cryptographically linked-list’ that they can verify. They simply won’t trust it. [Instead], they’d end up creating their own data store and then checking data versions daily. Cryptography is there in part to verify things, but when you can’t even do that, it falls short.”
Why QLDB avoids decentralization?
So who are the potential users of Amazon’s QLDB solution? Perhaps those who have become skeptical of the blockchain buzzword, now that the hype has begun to settle, suggests Shani:
“Some believe in that as much as Satoshi and some don’t want to hear about decentralization, possibly because of the bad reputation it had and the excessive amount of speculators in the cryptosphere.
“It’s marketing buzz, we see it with artificial intelligence and [the] Internet of Things, too. That may continue to happen until creating a real decentralized blockchain is as easy as creating a database today.”
Therefore, with further development of blockchain comes greater adoption. It might take more time until decentralization becomes a more trusted solution among corporations looking to shield their data from tampering:
“Decentralization of trust as a concept is something that could fundamentally disrupt some industries, but it’ll take time until we get there. The public and the regulators would have to change their mindset in order for that to happen fully […] Meanwhile, the use of blockchain-like applications and tokenization of assets is already a big jump to many industries and will ease the change into blockchains in the long run.”
Amazon Managed Blockchain: Add-on to QLDB or independent blockchain solution?
Amazon Managed Blockchain, which was announced along with the QLDB, “makes it easy to create and manage scalable blockchain networks using the popular open source frameworks Hyperledger Fabric and Ethereum,” but also works with QLDB itself, according to the company’s website.
Further, the product automatically scales depending on the needs of specific applications and is deployed in managing certificates, inviting new users to the network and tracing metrics, such as memory and storage resources and usage of computer, Amazon argues. AWS CEO Andy Jassy claims that this service “is going to make it much easier to use the two most popular blockchain frameworks [Ethereum and Hyperledger Fabric].”
Shani questions that argument by stating that Ethereum and Hyperledger blockchains are already “easily” set up in the industry’s present circumstances. The blockchain researcher also emphasizes the vagueness of Amazon’s press release:
“Governance in distributed protocol is an important aspect, but it’s unclear in what manner Amazon achieves this. If they implemented it in a centralized manner, how different is that from QLDB?”
Montes, in turn, doesn’t believe that a managed blockchain service offering may be around for long because “it limits open scalability (in a technology that is based on network-effects) by locking it up into a single cloud provider.” However, such solutions might be useful for testing and proof-of-concept (PoC) operations, he adds.
Still, the fact that a company as large as Amazon announced new blockchain-related products might seem like a healthy sign for the industry.
“From a macro point of view, the more research and development being done around Ethereum, the more the protocol strengthens and grows into a global adoption as a standard,” Shani concludes.