How is the Blockchain transforming itself to better itself
Blockchain is already almost part of the technological establishment. Anyone who visited the “Blockchain 2017 & Smart Contracts“** event in Berlin early this year could see this. All participants knew that blockchain means a distributed network and not the next US boy band. The technology is also no longer seen as hype. Instead, test scenarios and proofs of concept were presented.
Things were very different at earlier blockchain events: the speakers mainly sought to present blockchain as a technology and participants had no idea what exactly lay behind it. All participants, particularly those from the financial sector, were curious about concrete applications this time. The question that interested them most was: “what are the uses cases, and how do I develop them?”.
Transatlantic payment transactions in eight seconds
And they were not disappointed: alongside start-ups, which want to completely change the banking landscape, established financial heavyweights like BaFin or the European Central Bank (ECB) also now have examples of areas where blockchain can usefully be introduced. Reisebank, a DZ Bank subsidiary, as part of its capability tests for distributed ledger technology and smart contracts, presented its pilot transatlantic payment transactions in eight seconds. Rabobank presented its proof of concept for easier client identification (know your customer) based on blockchain. The idea: for example, financial institutions can draw on data from official sources where clients are already identified, such as social insurance agencies and credit investigation companies.
For the energy sector, Christian Arnold from EWE among others gave much food for thought about how peer-to-peer energy trading can be organised using blockchain. Prototypes such as LO3 Energy from Brooklyn, New York, are examples. Vattenfall is currently participating in four blockchain pilot projects – including Gridsingularity, a decentralised platform for exchanging energy data.
From theory to blockchain practice
Many companies do not have enough experience to venture to put forward their own business cases. For us, it is mainly a question of presenting a methodical procedure model to identify suitable business use cases for blockchain.
Before a concrete blockchain application can be implemented, it must first be established as a suitable use case. This is a multi-stage process: to start with, the basic framework conditions must be met, for example a decentralised network. It is also important that the goals of a practical application can be fulfilled with blockchain technology. To choose a concrete blockchain platform, answers are also needed to questions such as whether or not smart contracts are relevant and which consensus procedure should be used. Finally, it must be ensured that implementation is possible or for example whether there are legal pitfalls. Once this preliminary work is completed, design thinking and the concrete implementation project then follow.
Implementation of blockchain technology requires a decentralised solution that is not managed by a central authority. Instead, a committee or consortium is responsible for the theme of governance. Governance determines roles and responsibilities in the blockchain. It is also responsible for resolving conflicts that may arise on the platform.
Blockchain is no longer hype but the topic remains exciting and interesting, particularly for the financial and energy sectors. The field of activity is shifting further in the direction of proof-of-concept implementation. No one is still in the ‘valley of the clueless’* on the question of “what is blockchain?”. We now just need crash barriers for concrete applications.
*When Germany was still divided in East and West Germany, this expression referred to the regions that could not receive tv and radio from the Federal Republic of Germany. Inhabitants in these regions were therefore less informed.
From 20.02. – 22.02.2017 “Blockchain 2017 & Smart Contracts” in Berlin. This covered topics such as regulation & compliance, smart contracts, digital identification, identity & security, scalability & security, blockchain & IT infrastructure and the first examples of applications. Numerous presentations were given by banks, energy suppliers, fintechs, IT providers and consultancies. Sopra Steria Consulting was there as a sponsor and presenter.