As governments of Japan, Singapore, the U.K. and others are working to introduce blockchain digital ledgers to boost business payments, transactions, interbank payments and corporate dealings, does the region need its own blockchain?
From banking to healthcare, blockchain business applications are transforming the way data is stored, and accessed. Blockchain business opportunities currently lie in Banking, Smart Contracts, Connected Cars, healthcare, IoT, Insurance and food safety among many others.
At TOP CEO 2019 in Bahrain, a session involving expert panellists discussed the 'Blockchain Opportunity' and included experts like Khalid Saad, CEO Bahrain FinTech Bay, Jorge Sebastião, CISSP, Chief Technology Officer, Huawei, and Andrew Rippon, Founder of Thrupny.
Last year, 95% of companies across different industries were investing in blockchain tech projects. Over a half (58%) of investors and 55% of consumers feel that blockchain are optimistic about the blockchain’s potential for money transfers. Per a Deloitte survey, 74% of companies state that they already have a “compelling business case” for blockchain technology; 34% already initiated a blockchain deployment.
“It’s not what you can do with blockchain, but it's what blockchain can do for you,” said Rippon.
“There are there is a step change in digital transformation here. This is really startling. And I think it's taking a while to take hold because it's hard to understand sometimes the level of change that this will go into.”
Rippon added that if we want to look into the past to see what kind of change we're looking at, we need to see the changes that happened with the internet which changed businesses, killed businesses and created new businesses and made them a lot more efficient, and interactive.
“The blockchain is taking businesses to the next level, in terms of transaction capability, and collaboration capabilities. So people like Bain & Co. are saying that in certain areas, blockchain could cut transaction costs or administrative costs by up to 50% or more. There are people like KPMG, who are saying that now is the time to invest because there are some disruptive models coming along, where the middleman is being cut out,” said Rippon.
“So, if your business includes heavy administrative pen on paper, all this could go away, going forward. So I'm very much about starting now having a look at what you can do with blockchain and using it.”
He adds that blockchain doesn’t live by itself, but rather with a whole raft of technologies around it to keep the business agile as well.
“So, as technologists, we've started to move towards a more agile sample, where we see, reflect, build, try to deploy, and try again.”
Blockchain is a small part of a bigger picture
Blockchain has disrupted centralized services. Centralized systems store all your data (or money in the case of banks) in a specific storage entity. By decentralizing, blockchain ensures that information is owned by all the people in the network.
“It's a technology of decentralization. It's a technology of the immutability. But it has a few others. That's one aspect. The second aspect is when we talk about today and we say, I am doing a blockchain project, we quickly realized that blockchain like any other technology over the last 30 or 40 years is just a small element of the complete piece of the puzzle,” says Sebastião.
“So when you actually look at the blockchain project, the real elements of blockchain is maybe 5% of the application. It's not really about blockchain but about the end-to-end application.”
Sebastião added that the best solutions for blockchain are where we actually don't even know blockchain is there.
“And we have certainly an interesting example of a solution that was developed in Dubai and being used by Jumeirah group where digital wallets process entries from the time a guest checks in into the Jumeirah of group of hotels, presents a credit card, joins in recreation activities, and when the vacation is over checks out, all using tokens, or cryptocurrencies but the guest has no idea that the technology is there.”
Hype or reality
The merits of Blockchain technology is that it will facilitate a lot of things in a more transparent, efficient, and cheaper way, especially if agile when combined with additional techs.
“But I think we live in a time of irrational exuberance. I think people are jumping on the bandwagon without fully understanding what they are dealing with,” says Saad.
“So I think the debate is whether to go all out on the tech or like in Saudi, move gradually, using the blockchain starting with vehicle registrations and then maybe look at things to do with the logistical sector.”
Saad points to the role of raising awareness about the uses of blockchain and making sense of the tech, ie. if it is really the best way forward.
“There's a lot of hype where people are actually lost as to why they actually want to do blockchain. Governments have gone pretty aggressive, but the majority are still dipping their toes and I think
that's the way it's supposed to be.”