Changes, barriers and the future landscape


Blockchain, technology at the tip of everyone's language, is explained by Dave Locke, chief technology officer of World Wide Technology The blockchain revolution: changes, barriers and the image of the future landscape

"Personally, I think that regulators, at the moment, are part of the problem, because they have built their model of compliance around the fault".

HSBC, Standard Chartered, Bank of China, Deutsche Bank, Société Générale and UBS, among many others, are trying to block technology to speed up, simplify and reduce risks in the $ 16 trillion of global trade made each year.

Banks hope that the decentralized nature of technology, which draws and verifies information from thousands of different sources, will eliminate vast stacks of paper documents and unlock up to $ 2 billion in extra financing activities within eight years

World Wide Technology Chief Technology Officer Dave Locke worked closely with Dell Technologies to develop an open source blockchain technology for seamless integration into the IT infrastructure of banks.

In this article, discusses:

• The adoption of blockchain technology by companies around the world will see a huge change in the way each sector does business, just like the monumental transition from paper to online business.

• The lack of scalability and the energy-consuming mechanisms of blockchain technology have been the main deterrents to mass adoption.

• How can these problems be overcome and how does the future of blockchain integration arise?

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How will the blockchain change and will have an impact on the different industries that go on?

My personal opinion is that blockchain will create a fundamental change in the way some business processes are performed globally; be it payments, payments or credits in the world of financial services, be it banking or insurance, both in the retail space and in the pharmaceutical space.

There is a huge push to use the blockchain to ensure secure supply chains and also to ensure the provision of goods in terms of origin from where they come from; whether it's a chicken egg or a piece of meat right down to the pharmaceuticals that have been made offshore, avoiding the entire culture of counterfeit products that is affecting the business.

So, as a basic technology, blockchain is positioned as something fundamental in the business landscape – being able to translate what has traditionally been a trust between two parties or through a third party as a mediator.

For example, with agreements, you are often using the third party to be the honest party and verify both ends of the transaction. In the new blockchain world, with a distributed trust model, you are effectively relying on the network to verify the origin and destination parties; but this means that it is no longer necessary for a third physical party to validate one of the transactions or the part involved in that transaction. Become independent to a certain extent.

Dave Locke, chief technology officer of World Wide Technology. "Width =" 540 "height =" 675

Dave Locke, chief technology officer at World Wide Technology.

What are the obstacles to the adoption of blockchain?

There are two actually and they are all inside.

One is in terms of the practicality of technology today. It's still not quite prime time and if you look at all the different consortia that have grown, all the different platforms that have been developed, there's a large open source community that's creating all of their different versions of this.

The biggest challenge, technically, is the actual speed. It currently requires a lot of computing power, rather it is a slow process to do math inside the blockchain algorithms to actually give you an equivalent business level / throughput.

If you think about credit card payments, these transactions are processed anywhere between 5,000 and 10,000 per second. Currently with blockchain technology they are only in transactions with single digits per second. This is a barrier in terms of technology and ability to meet current expectations. But this has been solved and part of the reasoning we are working with VMware is because they have found a way to solve that particular area.

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The second area is that many companies obviously are talking about it, but some are doing a lot of pilot work. They might be interested in particular business processes, looking at how this could be put into the chain and how it would impact their business model. The challenge they have is & # 39; How do I get from a pilot in real production & # 39;. Production means that you have a certified platform that is typically in a regulated business that must have controls around it, must be secure, must be signed by the regulator, must be operational – you must be able to feed, irrigate, manage, monitor, and 39; real environment and it will be a different way of doing business, because you do not entrust yourself to a third party.

Personally I think that regulators, at the moment, are part of the problem, because they have built their model of conformity around the fault.

What are the compliance challenges?

For example, in the regime of senior managers in financial services, they assign a role to a particular individual. So there's a type of role called SMS 24, which if I had to search on Google (and it's usually a sign for CIO or COO or is shared with each other), it actually says you're responsible as an individual for operations IT of your company and architecture; and if you have an interruption or you have a violation of some kind of security, then you as such are completely responsible and accountable. In the worst case of a violation, there may even be prison time associated with such violations.

Thus, compliance is currently based on this type of guilt culture of having named individuals who would be responsible for the technology of their organization. If you transfer these processes to a distributed trust platform that operates on multiple entities in multiple countries, from whom do you blame when it goes wrong? There is a whole piece of legislation and compliance that needs to be updated globally to allow these things to actually operate in a way that meets the future legal requirements.

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How to overcome these problems of scalability and compliance?

We do a lot of work around the certainty of applications for financial services institutions that connect to their existing compliance laws. Here, we are making a payment similar to a service and we will examine all the components making up the payments.

Using the same principle, we want to evolve towards blockchain assurance: therefore, by taking any service and equivalent service, move it to the blockchain, to provide a level of certainty that all controls are in place and can be tested, monitored and managed.

But, to be honest, until the legislation takes hold you do not know what should be certified.

What will the future of a blockchain-first landscape be like?

You will see much more customer-centric information about a particular transaction or product.

Similarly, in the financial space it was seen that settlement companies were going out of business because a bank would be able to settle for a third party without going through settlement organizations because the blockchain says this is the right payment, comes from this person and this is his authenticity that goes through.

There will be an entire change in terms of how business is done.

But I think the biggest impact is once you put the assets in the blockchain, there's an opportunity in the commodity markets to start trading against the certainty of certain assets. It would avoid the situation that occurred with the credit crunch in which they were accumulating bad debts in other bad debts and then putting a bit of excess debt to mask the bad debt that was in the middle. So there is an opportunity to have a much cleaner and profitable way to trade against these tools because they are validated and certified on the blockchain as original transactions.

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