Thomas Campione (Blockchain & Crypto-assets Leader, PwC Luxembourg) tells us more about PwC’s involvement with the Infrachain initiative and discusses the current challenges and opportunities of the Blockchain technology.
When and why did you join the Infrachain initiative?
We joined Infrachain in Autumn 2019 in a move to get closer from the local community active on the topic and to contribute to its development as a member of a larger group.
At global level, we have 500+ staff working on blockchain projects and 100+ technical team members focusing on the technology. While our global strategy remains key, it is also extremely important to us to be embedded into local initiatives, so as to best apprehend the global to local dynamic.
In addition, the rise and success of the technology will not be the result of one or very few players’ efforts, so it was very relevant for us to explore with other players to create a network impact.
Blockchain reinvents the concepts of collaboration, governance and trust, which also aligns to our purpose to build trust in society and to solve important problems – Infrachain, seemed a natural fit to us.
What are the challenges you are currently facing when it comes to the development of concrete Blockchain applications?
The term “concrete” is very important here. Blockchain is a complex and quite conceptual topic, it is a brutal shift in terms of governance and operating model. In addition, we must recognise that the topic still suffers from a branding issue not only because of some shortcuts in relation to crypto-currencies – one of its applications – but also because blockchain has been a solution looking for a problem in the recent past, which led to poor use cases, money wasted and disillusion.
The first challenge is understanding the technology capabilities, going beyond the misconceptions. Second is to make sure to have the right people around the table and be able to confront business issues with technology so as to identify “concrete” and relevant use cases. Then comes the mindset challenge, as mentioned before, blockchain brings a completely different way of transacting, collaborating and governing. The disruptive aspect is not negligible. Lastly, managing stakeholders’ expectations is key. Such transformative technology offers tremendous costs efficiencies but is requires investment and starting discussion about RoI now is far too soon, it’s a long term shot.
What about their main advantages and opportunities?
The promise of decentralising the economy is quite compelling even if quite disruptive and even worrying for some. The inherent disintermediation of value chains in many sectors and the related efficiencies in costs, time and transparency are attractive ideas.
Blockchain also puts the individual back at the centre of everything, truly owning our identity and its attributes, our personal data, deciding what to share, who to share with and managing access rights.
There’re also great opportunities in supply chain with potential for full transparency and instant visibility, ensuring real time reactivity. If there was still a need, the current health crisis highlighted how crucial it is to know exactly what and where our stocks are and how to mobilise them quickly for example.
Last but certainly not the least, we see massive improvement in terms of security given the absence of single point of failure in a decentralised model.
According to you, where will Blockchain be the most efficient? How and why?
Blockchain is pervasive and its benefits are numerous (greater transparency and traceability, increased efficiency, enhanced security…to name a few). The biggest challenge is probably to find the area where it can bring the biggest marginal benefits considering the costs involved.
Broadly speaking, one can say that whenever multiple parties are sharing and updating data, that transactions interact with each other’s, with a requirement to verify the legitimacy of these transactions, there’s most probably a case for blockchain. If on top, reducing delay can benefit the business and that intermediaries add complexity, we have a case for blockchain application.
Some concrete examples include asset provenance and tracking, cross-border payments, and credentialization/records management, simply because what the technology proposes in these fields is by far superior and more efficient than anything in place at the moment. Blockchain has also an interesting role to play in solving for the agency issue and costs in corporate governance principal-agent relationship.
What is needed to really kickoff the adoption of Blockchain?
Blockchain adoption has already kicked-off in. There hasn’t been a day since more than 2y without a significant development on the topic, without a major player stepping in or a new use case,…Some would say hype, I would say excitement.
What’s missing however for mass adoption is a global willingness of the different stakeholders of any given sector to be part of a blockchain based value chain. Indeed, there’s a strong networking effect to be considered and implementing blockchain in isolation has very little value for an organisation. Moving all the stakeholders of a given business on chain, that’s where the real deal is.
As prerequisites, the current landscape also needs greater standardisation, or increased interoperability, and much better regulatory clarity. On that last element, it is key that regulations don’t drive the status quo simply because the technology may change the playing field and significantly alter the distribution of power between stakeholders. Regulation shall do what they’re meant to do, regulate, and not to nip change in the bud.
At the end of the day, it all comes down to people, their mindset and willingness to change.
Published on April 21st, 2020 on https://www.itone.lu/actualites/blockchain-brings-completely-different-way-transacting-collaborating-and-governing-0