Last week I attended the Blockchain Summit in London. As it was my first Blockchain-related conference I wanted to filter through the noise in the space and find out more about the technology and it’s use cases. The two-day event had a wide range of speakers and industry experts who covered every aspect of Blockchain technology and it’s implementation. Below are some of the key themes that appeared in sessions and Q&A’s.
Key themes summarised:
Public vs Private or Both?
A common trend that was often discussed at the blockchain summit was Public vs Private Blockchains. Blockchain technology has moved on from its fully decentralised origin that was Bitcoin. The concept that anyone can see everyone’s transaction just does not work in a business environment. Blockchains such as Hyperledger can implement Private channels and restrict what certain participants can view. This is because in business transactional details should not be made public. For example a supplier selling to shop x does not want shop y knowing the price they are selling the goods at. They also do not want their competitor seeing this either as they would be able to undercut them. Private Blockchains by nature are more scalable and more flexible in respects to the consensus model that can be chosen.
However, are private Blockchains really decentralised? A speaker gave a great answer to this by saying “decentralisation exists when more than two parties can view transactional data in real time in a shared immutable ledger.” With current ERP’s and legacy systems this is not achievable. Therefore I am on the side that private Blockchains are suitably decentralised and will become the go to platform for any business looking to Blockchain for numerous reasons.
My personal opinion is that an improved system would be to have a public ‘parent chain’ and private ‘child chains.’ This means the private transactional data such as price, quantity etc is hidden on the child chain but when the transaction is finalised a smart contract would execute to the public chain. This example works really when in the example of B2B business. Anyone would be able to view the ‘history’ of a supplier and a potential buyer on the public chain and be able to validate for themselves if they both deliver on time. This would mean from the supplier’s side there is an incentive to deliver on time and from the buyers side an incentive to pay on time as both would be broadcast publicly however details such as quantity and amount are kept hidden. The end result would be a decentralised, immutable validation system for businesses.
Regulation and GDPR
Another hot topic was regulation and well the lack of it. A common theme was around what tokens are classified as. Are they securities or are they utilities? The main factor for businesses and institutions choosing the ‘wait and see’ approach was regulation. This could also be linked to the popularity of private blockchains – without the issuance of tokens. The long term risks of adopting a technology that could later be revoked is currently too large for businesses. A reoccurring line was that the businesses need regulation and a stance from governments fast. The longer their position is unknown the slower the development will be and it the long run could harm prosperity.
Another reoccurring question and one which nobody could answer was where blockchains stand with GDPR. As article 16 states ‘you have a right to erase your data.’ However, with a blockchain being immutable this proves impossible in practice. This certainly poses an interesting question and appeared quite frequently in the Q&A Sessions. It will interesting to see what initiative governments take towards regulation and specifically GDPR.
Blockchain is not a ‘silver bullet’
Another common discussion at the blockchain summit was around Blockchain and its use cases. It is often viewed by businesses as a shiny new technology much like AI and one that they need to adopt even though they are unsure if they need it. However many panel experts such as IBM pointed out that sometimes clients needs are better served by improving processes and upgrading legacy databases. With Blockchain development only being around for a decade it would be easier to work with databases as development in that technology has been around for 20 years. An interesting perspective is that the emergence of Blockchain technology has really ‘kick-started’ business discussions into how they can simplify their processes and remove participants from the ‘value chain’ who do not offer value. The below chart was shared by one of the speakers and is really useful in providing an answer to the question every business should be asking ‘Do we need Blockchain?’.
It is clear from the popularity of events such as the London Blockchain summit that this technology is here to stay. A clear definition has formed between Crypto and Blockchain as a toolset for business data. Private Blockchains such as Hyperledger are already being used by some leading businesses and are having an impact on the efficiency and simplicity of their operations. The value of Cryptocurrencies is still speculative and the businesses behind them are operating unregulated in many countries. Until a universal stance can be adopted their growth will be hampered.
ICO’s are being actively explored as an alternative funding model to IPO’s however again this is reliant on the classification of utility tokens vs securities. To summarise the emergence of Blockchain technology is and should be on every leading company’s radar. Similar to how the emergence of the internet affected business as we know today; Blockchain could have a similar effect as a tool to achieve decentralisation and consensus where there is and always will be a factor of risk.
Read more on blockchain here.