At the blockchain expo held in London a few days ago, one of the conferences focused on the benefits and challenges of integrating the blockchain into the business model.
The first challenge is that the blockchain confuses many people. William Lovell, future technology director at the Bank of England, said end users don't need to understand the blockchain. He compared it to consumers who use services hosted on Amazon Web services (AWS), who don't know the existence of AWS (such as Netflix). Therefore, consumers do not need to understand every aspect, but it is commendable that the blockchain allows people to control to some extent the data they have never had before.
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Similarly, Chris Clements of PricewaterhouseCoopers believes that the focus should be on the solution to the problem, not on the technology. He gave an example of a PwC certification solution. The message is that it makes it easier to carry and control your credentials. When describing it, the blockchain is only mentioned in the fourth or fifth sentence. Why is the blockchain? Relatedly, the benefits of interpreting blockchain within a company are also a challenge. Maersk’s Suyash Shrivastava also stressed the importance of the problems it was trying to solve. For shipping, the benefits are reduced documentation and increased efficiency through automated payments. There is no clear interest, and curiosity is not enough to guarantee investment. In conveying the interests, Lovell of the Bank of England is keen on “seeing is believing”. The Bank of England used Ethereum in cooperation with PricewaterhouseCoopers (PwC) to demonstrate this concept for the first time. This is just a simple demonstration of how a central bank payment system based on distributed ledgers works. As part of the test, they unplugged the nodes hosted by the central bank, but the payments are still flowing because the other nodes are still running. This gives us a preliminary understanding of how distributed works.
Maersk's Shrivastava emphasizes a challenge that is not just an explanation of interest. In the shipping industry, technology adoption is usually slow. Blockchain technology requires a highly agile framework that may not be suitable for existing applications, such as those running on Maersk mainframes. Therefore, he believes it is necessary to assess whether the current internal IT department has the ability to handle the required agility. Governance Challenges At another conference on energy, governance issues were raised many times. Panelists acknowledge that dealing with regulators is easier than expected, in part because of the existence of sandboxes. But governance issues – working with competitors – are time consuming. Electron Energy Startup CEO Joanna Hubbard is building an energy asset register that includes data on electricity and gas meter supply points across the UK. She pointed out that the main problem of coordination is people rather than technology. When the relevant organization decides to cooperate, the technical decision can be delegated to the chief architect. Approximately 50% of the asset registration budget is related to governance. Yannis Perrakis of BP also stressed that governance is a major issue. BP is an investor in VAKT, a post-oil trading company that is a joint venture.
Perrakis thinks this is effective, but he doesn't think there is a governance structure for all projects. He also pointed out that it is not uncommon for industry discussions to begin to discuss blockchains, develop into governance, and sometimes open up opportunities outside the blockchain. The gradual expansion of blockchain applications is starting to go into production, but when will they be able to scale? Chris Clement of PricewaterhouseCoopers said that not only the blockchain, but also a common misconception that it can be directly developed from incubation to scale. But there is still a lot of things in between. Instead, it is important to slowly move through the pilot into the scale phase. It is also necessary to prove that the blockchain is scaled to 1,000 transactions per second and thousands of users per second. BP's Perrakis mentions scalability and technical issues such as speed, security and dispersion. Many blockchain use cases are self-promoting, whether it's transparency, automation, or optimizing working capital. However, he said that it is now up to those developing blockchain solutions to prove these benefits.