To hear ALTR’s Doug Wick tell it, the enterprise security company’s founders didn’t set out to create a blockchain company. In fact, they initially predicted that bitcoin (BTC) would be hacked and quickly become irrelevant.
Today, however, after nearly four years of what the company calls “stealth R&D,” ALTR holds 15 blockchain patents, $15 million in funding, and is marketing a blockchain-based enterprise security and data-storage solution targeted at individual companies, not consortia. It is currently working with financial services and health care companies as well as software developers that serve these industries, including a just-announced partnership with fertility industry database FRTYL.
ThirtyK spoke with Wick, ALTR’s vice president of product and marketing, about how the blockchain can secure data, the benefits of single-company solutions, and why ALTR makes a point of saying it’s not developing its own coins. Before coming to ALTR, Wick worked in the startup space for two decades and most recently was CEO of TradeLive, a startup marketplace for IT equipment.
ThirtyK: If ALTR’s founders were blockchain skeptics, what changed their mind about the technology?
Wick: A lot of startups and companies using blockchain have gotten some MBAs in a room and said, “We have the blockchain, what can we solve with it?” We started with a problem and found blockchain to solve it.
The core group of people who founded ALTR started in response to what they had experienced at their previous company, an algorithmic options trading platform. Bitcoin was on the rise, and they expected it to get hacked. As time went on and it survived, they started to take blockchain seriously because they realized they could take the fundamental structure and adapt it to provide data security for the enterprise.
An In-House Solution
ThirtyK: How does ALTR approach using blockchain to secure data?
Wick: We focus on private and permissioned blockchains, which is obviously a big thing for security. We use the blockchain to store data access log and the data itself… Say you want to store a Social Security number or medical image on the blockchain. We fragment that and store the pieces on individual chains across the network. Unlike public blockchains where every node has all the data, we’ve created a scheme where none of the nodes have the complete data. Because it’s private and permissioned, we have a central arbiter that allows us to treat the blockchain as a RAID array … and write and read the data at application speed.
“People think big on purpose, because the blockchain has world-changing potential. It really does, but it can also solve problems in an individual company.”
ThirtyK: How do you envision companies adopting your technology?
Wick: What our customers are doing so far is deploying these blockchain networks in their own company. It’s a single-rider blockchain, and one of the things that’s compelling about it is that you can sell it to a single company. You don’t have to get an entire industry on board.
Some [blockchain] ideas are really compelling, but it could take decades for them to fulfill their vision. The way technology tends to be adopted is at the atomic level first. If you can solve the micro problems – the trust issues inside the company – then you can get them to start to band together with other companies like them. It’s a bottom-up approach.
ThirtyK: That’s a different tack than most blockchain projects.
Wick: One of the things that has hurt blockchain as a design pattern is that the first thing it solved was this big global thing: cryptocurrency. So people think big on purpose, because the blockchain has world-changing potential. It really does, but it can also solve problems in an individual company.
ThirtyK: How do companies integrate your technology with their existing systems?
Wick: The technology approach was taken from Wall Street. [Their security systems] sit in the critical path of data. We developed these smart database drivers, which is what all apps use to communicate with their database. Whatever database system your company has, you simply swap your driver with our driver. The minute you do that, you put the ALTR system in the path of critical data. We can monitor data access and log all of that immutably to the blockchain. We can slow down and block data access in real time. And the last thing we do is tokenize the data, replace it in the database with the token, break it into pieces and store those pieces in the blockchain where it can be reassembled in real time.
This is a much more realistic way to address data storage in the blockchain. We’re not looking to replace [commercial databases like] Oracle at all. Our platform accesses the query language of those databases, but together these systems create a massive decrease in data breaches.
ThirtyK: How does this approach improve security?
Wick: By approaching this with the idea that the network is going to be breached, so you have to set up the security around what they’re really after. [Intruders] can’t smash and grab data with credentials they’ve stolen because it’s tokenized. If you’re an insider, you know you can’t drop or alter the logs because they’re immutable.
If you look at cybersecurity spending, it’s over $60 billion in the U.S. alone and ramping up 10 to 20 percent a year, and the frequency and severity of data breaches [are] increasing as strongly. We’re spending money on the wrong things.
ThirtyK: Your website prominently says that ALTR isn’t a cryptocurrency and doesn’t deal in coins. How important is that when reaching out to enterprise customers?
Wick: We do wear it on our sleeves a little bit. We run into two types of people, those who don’t know about the blockchain or how it works, and people who are very educated about the technology and look at it through a lens. Some will look at a single-rider private blockchain and say that’s not a blockchain, that’s a distributed ledger or something else.
Blockchain opens a lot of doors for us, but the minute they open, a lot of people are suspicious. They shouldn’t be, because it’s really a powerful new design for data and distributed systems and it will have a tremendous economic impact eventually. We’re just getting started with that.