The revolutionary potential of blockchain technology lies in its decentralised and highly automated nature enabling rapid exchanges of data that can guarantee high levels of consensus, trust, immutability, security, transparency and legitimacy. The strength of each of these characteristics, however, varies across blockchain solutions.
Thanks to the additional layers above the blockchain layer itself, a range of other applications are made possible, with many use-cases remaining unexplored. Blockchain remains a relatively immature technology. Nevertheless, the momentum behind its development and implementation is greater than that behind past innovations such as the Internet or e-mail at a similar stage in their development. That’s why we are already witnessing green shoots of implementation in several areas.
consensus, trust, immutability, security, transparency and legitimacy
The financial sector has many functioning products based on blockchain often stemming from ICO or Initial Coin Offerings, which is the cryptocurrency equivalent of an Initial Public Offering (IPO) commonly seen when firms look to raise funds. In 2019, no less than ten large-scale projects, such as the IBM and Maersk’s supported project TradeLens, are set to go live. It’s moving so fast that standardisation processes are being fast-tracked. within ISO’s Technical Committee 307 on blockchain and distributed ledger technologies. This is the case, for example, of certain fundamental elements such as the terminology used by the developers, or identity management systems, to inevitably help facilitate access to permission-based networks supported by blockchain and other Distributed Ledger Technologies.
On top of large-scale implementations, there is a plethora of pilot projects involving consortia seeking to solve existing problems within their respective industries. These initiatives have the potential to change the way their industry operates fundamentally. First-movers will gain a crucial competitive advantage over other firms. New comers are appearing on the map each month. Many of these initiatives however, remain isolated.
Blockchain will be to value, what the Internet is to information.
Blockchain will be to value, what the Internet is to information. Enabled by many enhancements in security and functionality, blockchain will (unlike the Internet) couple the exchanged packets of data with their value outside of the network. This prospect is quite daunting for some. Arguably, there remains a lot of work to be done regarding both technology development and regulatory framework.
Meanwhile, where there have been coordinated efforts among traditional competitors such as in the ENERCHAIN project, we begin to see new business models. Energy firms are becoming mobility service providers. Small-scale manufacturers are becoming distributors in their own right. Although the word disruptive has undoubtedly been overused in recent years, few doubt that DLTs and blockchain will reshape the way our economies function.
This post gives you a snapshot of how things stand today. With the Public and Private Sectors now beginning to take real steps towards blockchain implementation, the latest developments will be important for all stakeholders to understand now and moving forward.
Forthcoming articles in this ‘blogchain’ will therefore provide greater detail and insight into the current and future regulatory framework; the technology itself; and how the various adopting industries are approaching blockchain. I will cover the technological and regulatory conditions in more detail to give a more detailed view on the current state of play, and prospects for blockchain here in the EU, and elsewhere.