Much hype exists around cryptocurrencies such as Bitcoin, with investors, VCs and developers alike keeping a close eye on their evolution in an area that still remains largely unregulated. What about the underlying blockchain technology platform for virtual currencies that is the real technological innovation and what is its scope to disrupt business?
We’ve decided to take a look at blockchain technology and sectors that are starting to embrace it. We also talk to two companies that have been harnessing blockchain.
Firstly though, what exactly is blockchain technology?
Put simply, blockchain is a decentralised database or ‘digital ledger’ that keeps ordered records (blocks) of transactions that everyone on the network can see.
It first came about in 2008, in the wake of the global economic crisis, when a person(s) under the name of Satoshi Nakamoto issued the paper Bitcoin: A Peer-to-Peer Electronic Cash System.
The paper proposed a ‘decentralised’ approach to digital transactions via a peer-to-peer network, which ultimately led to the arrival of blockchain.
And while it is most well known for being the technology that enables Bitcoin transactions, we’ve been seeing how blockhain’s applications extend far beyond cryptocurrency.
Back in 2015, Goldman Sachs predicted how blockchain would have the potential to disrupt “everything”.
In its report What if I Told You…, the investment bank suggested that blockchain technology could bring in a new “set of tools”. These tools had the scope to make “centralised institutions obsolete”.
Banks, for example, are seriously upping their game around blockchain. A 2016 report from IBM – Leading the Pack in Blockchain Banking: Trailblazers Set the Pace – predicted that 15% of the 200 banks it surveyed expected to be using blockchains commercially by 2017.
Financial services are also taking notice of the technology.
PwC, in its Global FinTech Report 2017, points to how 77% of respondents in the financial services space say they will adopt blockchain as part of either a production system or process by 2020.
It is not just banks and financial services though that are getting in on the act. The data stored in blockchains has potential applications for other industries, including the food sector.
This year, companies such as Walmart, Nestlé and Unilever have been linking up with IBM on its Blockchain Platform to look at ways of using blockchain technology to improve food safety within the supply chain.
Close to home, we’ve been checking out two companies in particular that are already leveraging blockchain technology.
First up is TradeIX, a shared platform for trade finance. Based in London, the company deploys blockchain technology and has created a platform powered to distributed ledger technology (DLT) that aims to disrupt the global trade finance industry.
Andy Berti, CTO of TradeIX, is also one of the company’s co-founders.
Speaking to TalentHub, he explains how the trade finance market is one with high-growth potential and of the key areas of focus right now in terms of blockchain. Figures from the International Chamber of Commerce point to how the current volume for trade finance is estimated at US$8trn.
Back in June, TradeIX launched its blockchain platform called TIX to target banks, financial institutions, technology companies and service providers within the trade finance ecosystem.
“It is an open platform,” explains Andy, adding that TIX provides a set of APIs and communication channels that any developer can use to create their own trade finance business or experience.
He says that TradeIX is using DLT for a number of benefits.
These include how data is “immediately” written away to the ledgers and cannot be then changed.
“This keeps the level of data integrity within the system very high,” explains Andy.
Security is another massive advantage, he says.
“Every interaction with a blockchain or DLT solution inherently has cryptographic security at its core.”
Looking to developers themselves, Andy says that DLT should definitely be on their radar.
“As a company looking to hire, we find it quite difficult to find good developers with blockchain experience. It is still a bit of a niche skillset, but we will start to see it move into the mainstream very soon.
“Blockchain is here to stay and will be used in all sorts of solutions.”
His advice to developers who wish to upskill or move into the area of blockchain is that people don’t need to be Bitcoin developers to understand it.
“Sometimes Blockchain is confused with Bitcoin and cryptocurrencies. They are not the same. Blockchain has a basic set of rules. Cryptocurrencies are an implementation of that technology.”
He says developers should look at technologies such as Corda or Hyperledger. These types of technologies have good documentation and large developer support communities.
Coincidentally, TradeIX is planning to open a Dublin office in 2018 and will be hiring.
Next up is the Irish start-up TicketChain, which has come up with a digital ticketing platform to tackle ticket fraud and reduce ticket touting.
The start-up came to life following a blockchain hackathon at Deloitte last year.
Kevin Murray, one of the three co-founders and COO, explains how he was interning in Deloitte in the summer of 2016 where he met co-founder Jake MccGwire.
“At the blockchain hackathon, Jake pitched the idea for a digital peer-to-peer ticketing platform of which TicketChain came about,” explains Kevin. It was there that they met their third co-founder, Jach Diebold, with TicketChain then going on to win the hackathon.
This year, the start-up also took part in the LaunchBox accelerator programme at TCD. The team has recently finished the NDRC Pre-Accelerator programme and Phase 1 of New Frontiers, the entrepreneur development programme run by Enterprise Ireland.
At the minute, TicketChain is working out of co-working space in the Grand Canal Docks and is also taking part in the Google Adopt a Start-Up programme.
Kevin says TicketChain has decided to move away from blockchain for the moment, however.
“Our first product was built on the Ethereum blockchain, but in the application for the product at the minute, we are not incorporating the blockchain as a primary service.”
From speaking to different clients and from what TicketChain wanted to achieve, he says the company felt the blockchain wasn’t as “universally acceptable”
at the level the start-up needs right now.
“And we didn’t want to go down the route of an ICO and creating tokens.”
Kevin says the latency issue is quite long for a blockchain, so if you are talking about someone going to an event and having their ticket scanned it would take between seven and 14 seconds to relay information back to the blockchain.
“That is only going to get faster, but seven seconds is far too long for a ticket to get cross-verified on the blockchain.”
While TicketChain has “parked” this for now, Kevin says it is something that the company will come back to at a later stage.
“Even if we’re not concentrating on blockchain at the minute, we’re still focusing on the digital deployment of tickets.
“We didn’t think that blockchain was the right solution for right now, but the community is very active here and we’re still quite involved in it.”
He says there is an ‘incredible network” in Dublin around the blockchain, including the Blockchain Association of Ireland and the Deloitte Blockchain Lab.
“If you keep your finger on the pulse of the blockchain scene in Dublin, it is extraordinary how much is going on,” Kevin adds.
So much about recruitment is about conversation. One of my favourite things I heard when I was researching this piece was talking to Lory Kehoe, Director – EMEA Blockchain Lead. I asked him how he got interested in Blockchain initially. His answer? “I was chatting to a friend in a bar in Hong Kong”. To me, that was such a brilliantly simple moment of conversation, for a subject, too many, that seems obscure and complex. A small spark of interest which placed Lory at the heart of an 800+ strong team, worldwide, working at Deloitte on Blockchain related projects.
Lory believes that market education, on the differences between the ICO’s and Blockchain as a wider technology, is key to helping bring the tech mainstream.