Learning about Blockchain and relevance to Analytics leaders (part 2)
Continuing our two-part series, learning about Blockchain and relevant lessons learnt from attending #CityChain17 event.
Following the morning sessions, covered in part one, our next speakers focussed more on applying the technology in your business.
So, here are some more reflections from listening to those speakers, together with blockchain resources that I hope you’ll find useful.
How to get from Concept to Implementation
First up, was Peter Bidewell (CMO of Applied Blockchain). Complementing the earlier technology detail, Peter unashamedly emphasised engaging the wider business, especially senior leaders (a popular topic for this blog).
He emphasised that his firm were finding real business uses for the technology & that they specialised in the ‘smart contracts’ capability of blockchain.
The benefits of blockchain that he is seeing as more relevant for business clients are:
- Tamper-proof actions/events
- Peer-to-peer (avoiding cost of intermediaries)
- Innately secure (built-in encryption & consensus)
- Pre-reconciled data (automatically synchronised)
- Smart Contracts
But, to apply this technology in business they have found they needed to develop a number of other augmentations/supporting capabilities. This includes their Blockchain ‘mantle’ that includes:
- Platform agnostic implementation of blockchain
- Data Privacy ‘capsule’ used within chain
- Identity Management service
- System Performance improvements
In addition to that ‘enhanced blockchain’ capability, their real world business applications have required this “full stack’ of technologies:
- Blockchain (of choice)
- Mantle (the above enhancements)
- Integration with other key business systems
- Front-end (UX)
Expanding on the Smart Contract capability (where they choose to focus), Peter explained this was not to do with replacing lawyers. Rather, a Smart Contract is a container of data & code (a block that can be placed on the chain/shared-ledger/network. It can contain:
- Workflow logic
- Token (if simulating passing of funds)
Peter finished by sharing some interesting applications. They are working with Bank of America. Appii, Nuggets and SITA.
The first of those is perhaps the most relevant for readers. BABB is to be the first Blockchain based bank, “an App Store for banking”:
The Appii pilot is also interesting, as it enables a sort of verified LinkedIn or CV (with qualifications/experience validated by providers). But, the example that sticks in the memory best is real-time drone regulation for SITA; the world’s first blockchain based registry of what all drone are:
What’s the path to mainstream adoption?
Acknowledging the emerging reality at this event (that commercial blockchain case studies are still in pilot stage), our next speaker shared his experience & thoughts on making greater progress.
Brian McNulty is a founder of the R3 Consortium (which was already referenced in part one). This is the world’s largest blockchain alliance, with over 70 major FS firms and over 200 software firms & regulators already members.
What does R3 do? Well, apparently they collaborate on commercial pilots. They also provide labs and a research centre to support organizations during their innovation. They have their own technology (R3 Corda implementation) and their own ‘path to production’ methodology. So, perhaps some resources worth checking out.
Akin to what we have learnt for Customer Insight & Data Science pilots, Brian confirmed that the path to mainstream adoption will be a ‘burning platform’. What story will make the case for such an unacceptable status quo that requires organisations to make the leap to blockchain (to avoid the flames)?
Brian suggests a few pointers:
- Collaboration is increasing, adding complexity & regulators expecting to be involved;
- The appetite of regulators in increasing, as they grasp the benefits of pushing for distributed ledgers as market solutions;
- More work is needed on standards (but the ‘dust is settling’ & competition is reducing)
- Will we get to cash on the blockchain? (probably more a move to digital assets on ledger being counted as monetary assets)
- The real burning platform will probably be increased operating costs (currently $2.6 trillion annually, with blockchain promising 20% saving)
Despite all that, Brian confirmed most businesses are still only at pilot stage. But, apparently, some FS firms are having IT developers trained en-masse (so that blockchain can be considered as just another technology option to meet business requirements).
Bursting the blockchain hype bubble
Next was a man who should seriously consider a second career in stand-up comedy. Dave Birch is innovation director for Consult Hyperion. He gave a hilarious comedy session on the hype around blockchain.
Using just genuine newspaper headlines, he revealed how blockchain is apparently the answer for every industry, transforming everything from banking to burgers & healthcare to ending global poverty. As an aside, he shared the amusing story of how Amex were conned during the “Great Salad Oil swindle” of 1963.
He used that as analogy to the crucial issue of how not to get swindled by over-hyped blockchain claims. The key, it appears, is to always: What’s in the blocks?
Dave also shared his 4 layered model of a shared ledger:
- Contract (smart contract built upon:)
- Communications (robust)
He described the lower 3 as a ‘consensus computer’. He also introduced a taxonomy of blockchain implementations. This was divided into a simple binary tree built on two layers of questions:
- Is it a public or private ledger?
- Is it permissioned or double-permissioned?
If you think about it, a shared ledger is really a practical example of the much talked about RegTech. Dave pointed out that a shared ledger solution would have uncovered the ‘Great Salad Oil Swindle’, because the macro production numbers would have been unbelievable. A lot of the hype is misguided, because blockchain can’t fix individual problems, but it can spot systemic errors.
An interesting analogy, he shared, was an old idea of best way to avoid bank branch robberies. At the time when lots of architects were suggesting military like protections for staff & vaults, one radical turn of the century designers suggested the opposite. A bank built mainly of glass. If everyone can see what is going on, the physical bank robber has nowhere to hide.
That is the principle of blockchain, the power of radical transparency. So, businesses may get more value thinking how to radically redesign, rather than just reengineer existing database solution into a blockchain app.
Getting back to the customer benefit of blockchain
Our final speaker brought us back to that emphasis during panel session – what is in it for the customer? (A topic that is preaching to the choir on this blog)
Peter Ferry, commercial director at Wallet Services, suggested that blockchain is gradually becoming an invisible technology option. The focus will return to customer needs & business requirements, with IT departments worrying about when blockchain is the right technology solution for needs.
But, when would it be relevant? How can blockchain make our lives simpler?
As Peter rightly pointed out, the development of the internet & today’s digital applications should be a warning. Mostly, digital technology has not made our lives simpler, if anything they are more complex & demanding. The internet has developed differently than was originally dreamed (distributed & robust network for military purposes).
Blockchain can potentially do a lot for customers, including: security by default, sovereignty of their own data & no single point of failure. Customer-focussed design principles have to be applied to this enabling technology to deliver real value.
So, there is a strong case for Customer Insight teams to partner with blockchain development teams to help enable this.
For their part, Wallet Services used this event to launch their enabling technology. SICCAR can be thought of as Blockchain As A Service, including APIs, Services and pre-fabricated business use cases. Might be worth checking out:
How will you approach the potential of blockchain for your business?
I hope this post was also useful, giving you food for thought & some useful resources/contacts.
Where are you on this journey? Are you still learning about blockchain?
Do you have plans to partner with blockchain development team? Are you already using Customer Insight to guide blockchain pilots?
If so, please let us know what’s working for you or any pitfalls to avoid (using the comments section below).