Strong alliance: Ernst & Young, Microsoft and ConsenSys create Ethereum middleware Baseline Protocol

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Babbitt Information (ID: bitcoin8btc)

, Author: Amy Castor, Compiler: Wendy, published with permission.

EY, Microsoft and blockchain consulting giant ConsenSys have jointly created the Baseline Protocol, a middleware solution for large companies to communicate and transact privately on the ethereum blockchain.

The project was announced earlier today. According to the statement, the protocol is "an open-source project that combines advanced technologies in cryptography, messaging, and blockchain to execute secure, private business processes at low cost through the public Ethereum mainnet." The protocol will allow for confidential and complex collaborations between businesses without leaving any sensitive data on-chain.

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How to get along with enterprises and public chains

Whether blockchain can be used to process enterprise data has been a topic of debate. A big problem with using a public blockchain is that any data stored on the network is public. This is a tricky problem for large corporations, who don't want to put their private transactions on a shared blockchain.

The open-source project aims to synchronize "internal systems of record" including ERP (enterprise resource planning) data, CRM (customer relationship management) and other private business processes via the ethereum blockchain.

In simple terms, Baseline provides a set of tools—including zero-knowledge proofs—that allow for the privacy of business transactions, smart contracts, and communications so that business users can decide what they want to share and with whom.

According to the protocol's Github, the aim is to enable fully confidential transactions of standard ERC-20 and ERC-721 tokens on the ethereum blockchain. It also noted that the protocol is an "experimental solution that is still under active development," which seems to indicate that everything is not quite ready yet.

Paul Brody, global blockchain leader at EY, said he would not call the technology experimental. Although newly launched, it is under active development and is actually "fairly mature".

“We expect to have an enterprise product based on this technology soon,” he said, adding that he expected a new Baseline-related product to launch as early as next month.

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How to use Baseline? How to do it?

Brody said:

"Companies use all sorts of complex internal systems to transact, but when they communicate with each other, they mostly use email, spreadsheets and EDI (electronic data interchange), basically texting."

Based on Baseline, Brody said there are two things on the blockchain. One is "notarization" -- that is, the hash of the file and the timestamp used to authenticate the file. (Note that you don't put the document on the blockchain.)

These tokens are key inputs and outputs of business processes. This is one of the uses of privacy that Nightfall ZKP brings—the actual transfer of tokens (assets) between two parties. As Brody explained, Baseline also guarantees privacy through smart contracts, business logic such as the quantity and price of goods negotiated in contracts or purchase orders.

“For complex things, we will notarize; for those things where we want to promote decentralized services, we will do our best to create a digital token. Blockchain is more convenient, and it is also more efficient in design.” Support for digital tokens.”

Enabling these communications, along with the use of tokens on the blockchain, would allow parties to access other tools on the blockchain, such as access to loans through decentralized finance platforms, he said. (MakerDao, who happens to be one of the founding members of this project.)

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solve business problems

He said Baseline can do complex transactions, but at the same time have privacy guarantees, so other companies can't see how much you've borrowed. He believes this will allow businesses to use the blockchain for commercial transactions, just like people use the internet.

On a larger level, the Ethereum blockchain is no longer used as a settlement layer for recording transactions, but as an intermediary or integration layer that is always available, with no downtime, remains unchanged, and all partners on the network accessible.

In Consensys' vision, the technology would offload all the "heavy lifting" that has traditionally involved connecting disparate ERP and CRM systems with their internal databases, while maintaining data integrity.

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Where Baseline Begins

In mid-2019, EY, ConsenSys, and Microsoft launched a supply chain project code-named "Radish34," which uses ethereum to calculate volume discounts in real time across a series of purchase orders. This is the beginning of Baseline.

A company called Unibright did most of the development and was one of the founding members of the protocol team.