Anne Bailey: Where Blockchain is Thriving

And welcome to all of you attendees, as Raj Apley said this session today, our blockchain enterprise days is really a day to be unpacking assumptions. And so blockchain has been touted as the, as the end all solution for everything. But we do need to be moving through these assumptions and pulling them apart, deciding what we can take with us. So of course, this assumption packed inside today. The blockchain enterprise days is assuming that blockchain brings value to enterprises.

Well, yes, we want to move forward with that, but we need to question that a bit more. So therefore I'm bringing this session to you where blockchain is thriving. Of course packed in that title is yet another assumption is blockchain thriving. So I'd like you to come with me on this thought journey, as we decide, if we can move forward with that assumption and therefore how we can move forward with today. So let's get a preview of what we'll discuss today.

As I mentioned is blockchain thriving throughout that will pull that apart and, and find some areas where blockchain I would argue is thriving. And of course ending with yet. Another question does thriving mean mature and how do we move forward with that? So our fundamental question here is blockchain thriving.

Now this is my point of view here, and I would be very happy to discuss this with any of you, as you take a different standpoint, because this is a debatable topic you could of course take the metrics of how many solutions and products are moving past the point of concept stage to commercialization, to being in production. And if you were to take that standpoint, I would argue this could be questionable. Is blockchain thriving well in certain areas? Hmm. But I take some different metrics here that I'd like to take a look at.

So the short answer to the entire presentation, my take is yes, but we're gonna dive a bit deeper into why hype has continued with blockchain. This is the hype and blockchain belong together, but it's interesting to consider why that hype is still here. And I would argue it's that it's architecture is really unique and these strengths are what keep the hype going, make it really compelling for separate use cases like decentralized identity, like supply chain management.

Now, for many of you, this will be a refresher, but for any of you who are new to the blockchain space, this is what makes blockchain really unique and really interesting. It, first of all, has a decentralized architecture. And so this means that there's no one central party which has control over the information and the transactions being written to blockchain. Next step is the immutable ledger. This means that transactions that are being written to the blockchain cannot be changed. And invalid transactions that are currently being written to the blockchain are not accepted.

They are rejected again by the decentralized architecture, which requires agreement of all the independent nodes that are running this. Now going hand in hand with the immutable ledger, you have sequential records. Now this is often found in blockchain architectures sometimes not found in blockchain like architectures, but when you have sequential records or transactions, which are written to the blockchain in chronological order, and you pair that with an immutable ledger, which means you cannot retrospectively change or alter those transactions.

That means you have a transparent and dependable chain of custody able to give validity to those transactions. So this is why the hype continues because this is really unique and brings something which we don't always have from other architectures. And moving into our question of is blockchain. Thriving. I would say that my mind first goes to the thriving and active community that is surrounding blockchain, as well as the, the overwhelming optimism, which is here, which you don't always find. So being in the identity and access management space, this is where my attention is drawn to.

I had the pleasure of hearing Ian Glazer of ID pro. He was speaking at the EIC in September, and he's been working on a longitudinal survey since 2019.

Again, looking at the identity and access management ommunity he looked at several different topics, but what caught my eye is that he asked the question of two individuals to individual. I am experts, and to the firms that they work for, where is your interest going? Where are you putting in extra time to educate yourself? And for individuals, the range was about 15% to 27%, depending on the year, they said that they prioritized learning about blockchain. Of course, this is targeted to the IAM space. So we can expect that the interest in the centralized inter identity is even higher.

So range in between 21 and 27%. So this is, I would say, a, a market, a clear vote of interest from one community. And yet there are many out there. Now there's an interesting gap, which Ian also found, which is that only about 4% of firms prioritized learning about blockchain or getting involved in those projects, 7% in decentralized identity. Now we could interpret this in many different ways.

My interpretation of this is that there's a, a challenge in messaging where the, the architecture itself for those people who are down in the weeds, interested in how this is working and what it can bring are really enthusiastic. However, when it's coming to planning out that business model, getting to the reality check of how to actually roll this out, that's when firms or enterprises may have less interest. So that's one reason why we're here today is to be discussing those challenges and wondering how we can reduce that gap.

Another way to picture how blockchain is thriving is to look again at the blockchain specific communities, which are out there, which there are many, some very interesting ones to be looking at are E C the European blockchain services, infrastructure trust over IP, the in APTA or the international association of trusted blockchain applications. And of course in any region you go to, and for pretty much any use case like supply chain, like decentralized identity, decentralized finance, you're going to find consortiums, which are out there.

So we do need to question, are these initiatives thriving? I would say, yes, there are active membership. There are events being hosted all the time. There's research, always coming out from these groups. There are very promising projects which are coming out, and this is where you need to make your own decision here. These projects are nearing production for many of them, they're not out yet. So you need to take that with a grain of salt. We've had projects, the ones that I've listed here, some active since 2018, some is new as 2020.

And of course there are some newer, some older, but if we've had communities active for this amount of time, and we're still nearing production that leave something to be desired, but that's not all these are communities which bring quite a bit of optimism and are like doing the hard work of laying both standards, open standards to be used. And regionwide infrastructures. In the case of EP C, this is a blockchain infrastructure, which could span all of Europe to support public services and private services if they want to get involved.

So these are not at all small projects, they're tackling something very big. So we need to be patient on that front. Now I would argue as we move away from the concept of blockchain itself, the idea, the hype that it builds and the community that it pulls around it, I would argue if there is one use case, which is really thriving, it's decentralized identity.

Now, again, you have to realize I'm biased. I spent a lot of time researching digital identity and decentralized identity is a big part of that. But from that perspective, I know that there are a good number of vendors plus, or minus of 20, who have brought this to commercialization who have paying customers who are really doing this in the real world. And underneath this use case of decentralized identity, you've got a whole range of different options going from verifiable credentials to a reuse of a digital identity.

Being able to bring that between organizations, between ecosystems, without having to re onboard every time. There's also great pairings with authentication, bringing in genuine presence, tying this with a reusable identity so that it is trustable. We can also package this as KYC moving towards all digital KYC processes. And of course on the privacy front, we have selective attribute sharing where you can choose which attributes you share with which parties or even a step further, simply sharing a proof that that attribute is correct without actually sharing that data.

So from my stance, blockchain is definitely thriving in the decentralized identity space. So that's one to really keep an eye out on now for better or for worse. We have the cryptocurrency space and blockchain is really thriving here. When we consider cryptocurrencies themselves, there's an explosion of them. There's over 6,000 different cryptocurrencies. And that was as of August this year. So that's already a few months out of date. There's probably a few more. And if we compare that to 2013, there were only about 60 at that time.

So they're all over the place now for whatever use you're considering. There's really only about 20 coins, which are relevant. Some are being used for smart contracts, some for transactions, but really most are for speculation. And I would say that's really a, a challenge and a disservice to the opportunities that blockchain has, especially in how they can serve the enterprise, because this is really making it much less desirable for enterprises to enter in this space when it is so speculative exchanges also fit in here.

They're sometimes referred to as VAPs and like cryptocurrencies, there's a larger number of exchanges worldwide, but only a few very highly used exchanges. Now these are working with substantial amounts. There's about a 24 hour trade volume of three, 5 billion. So this is not insignificant, but we would consider that most of this is going through speculation or at least quite a lot of it. And we pair that with a very inadequate know your customer process attached to these exchanges. Then we're dealing with very low compliance and very complicated relationships across borders.

And especially when we start to consider things like ransomware, and we have to also accept that cryptocurrency is really what makes ransomware possible. Blockchain is what often makes cryptocurrencies possible. Blockchain is the supporter of ransomware and these two exists in the same world. So this of course happens because you can have synonymous transactions where you have a known wallet address, but perhaps an unknown owner of that wallet.

And combining this with this very inadequate KYC for over half of the exchanges out there becomes very easy to launder and mix coins between transactions and to hide perpetrators of a malware ransomware attack. So unfortunately, blockchain is also an enabler of cyber crime, and this seems to be thriving in the negative sense we can of course spend this in a positive way. And if we move away from, from cryptocurrencies themselves into the concept of exchanging value, this really holds promise in a lot of different ways.

So if we consider exchanging value being less of an exchange of money, but being able to send or receive value in the form of access to, for example, a rental car or to a hotel room, there's a whole world of opportunities here, which could be facilitated by blockchain, smart contracts weigh in here. So being able to deploy code when a transaction has been fulfilled and when certain requirements have been met and recorded on the blockchain. So I would argue that supply chain management is one very strong use case for smart contracts and cryptocurrencies themselves are not bad.

They bring a lot of positive aspects. For example, peer-to-peer transactions or upholding privacy, allowing space for anonymity, enabling global transfers at a peer-to-peer level, non functionable tokens are also an interesting direction for exchanging value, allowing for licensing and ownership of digital assets. Anything you can imagine, really. So with blockchain, thriving in so many places and having such a bright future, where do we go from here? How do we start to make those decisions?

Well, we can consider what does thriving really mean for us and our enterprise? Well, thriving is great, but it doesn't mean the same thing as maturity. We have use cases which are popular, some which are really suitable and really perfect for blockchain. And we need to be striving towards maturity. Now I've come together with a, with a summary of some of those concepts or, or use cases that I discussed earlier. Things like infrastructure, these collaborative projects, there's a moderate amount of hype.

I would argue that it's particularly for those who are blockchain enthusiasts, perhaps not the community and population at large suitability is difficult to judge on this because infrastructure of course is not a full solution. You need to be building something on top of it, which would be deployed on that infrastructure. So suitability yes, but depends on what comes with it and maturity.

Again, we're still moving towards having those infrastructures. And these projects in full production, decentralized identity would argue that there's much more hype, especially from the public, as they're looking for more ways to control access and distribution of their own private information, suitability very high maturity. In my opinion, everything in the blockchain space still has room to grow when it comes to maturity.

But if I were to choose any use case, this would be the one which is farthest along exchanging value really comes with this very dramatic pro and con of being highly speculative to contr virtual it's unregulated, but holds so much promise with very low maturity. Unfortunately, supply chain is one of those where I would say that there's a huge suitability.

This would be a very good application of blockchain where I'm seeing less and less hype as the years go on a few years ago, everybody was talking about it less so now, and maturity as well, where there are just limited projects that are moving beyond proof of concept. And so with that, I'll bring you back to this. This opening question is blockchain thriving, in my opinion, yes, unquestionably. We can't always equivalate thriving with maturity, but blockchain is definitely thriving. I would say that there's market readiness already in use cases for decentralized identity.

And there's huge promise in other areas like supply chain, where these projects are slowly graduating from proof of concepts to production. So with that, I thank you so much for your time. I look forward to the next speakers who are coming up. I think this is going to be a great day of great conversation and I very much welcome your questions.