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Given Bitcoin’s price craze in the face of gloomy economy during the Covid-19 pandemic, it can be assumed that the distributed ledger (DLT) / blockchain technology bubble is poised to burst once again. However, new developments warrant special attention to this sector. There are now new use cases leveraging DLT, with some companies starting to understand how to build viable business models. The space also offers exciting career opportunities for people of diverse backgrounds. I learned all this from a recent conversation with IOTA’s Wilfried Pimenta de Miranda, DAG Global’s Sean Kiernan, and TradeIX’s Daniel Cotti. We discussed the launch of an INSEAD case study, “IOTA Foundation: Building a Vital Minimum Ecosystem for Smart Cities“In a recent INTHECASE speaks organized by digital @ INSEAD.
IOTA ecosystem and career opportunities
The idea behind IOTA, launched in 2015, is to create an open source public DLT suitable for the IoT economy. The digital economy of tomorrow will run on automated and distributed cyber / physical systems. New approaches to managing and sharing data between citizens, organizations and IoT resources or machines need to be designed around new digital trust frameworks and a new type of electronic infrastructure. IOTA wants to be to the IoT what TCP / IP has become to the web. Vision is a machine economy where IoT assets, such as autonomous vehicles, participate in the creation and exchange of value through machine-to-machine transactions.
Minimum usage rates and low power consumption are required for overall decentralized network management to enable frictionless data sharing and the emergence of new data-driven business models such as “all as a serviceWhile conventional public blockchain protocols introduce fees associated with the operations of miners’ nodes and lead to controversial power consumption, IOTA eliminates the need for miners and their operational attrition altogether.
Wilfried told us that IOTA fosters a broad collaborative ecosystem that includes developers, research, universities, and businesses from the public and private sectors. For example, STMicroelectronics is incorporating IOTA into its IoT stack, while Dell Technologies (in partnership with the Linux Foundation) is developing a Data Confidence Fabric to ensure transparency and digital trust in cross-silo data sharing. Meanwhile Jaguar Land Rover is leveraging IOTA to develop car wallet technology.
Progress towards peer-to-peer energy trading has also been made through the Horizon 2020 Positive CityxChange consortium from which Wilfried is creating a spin off and incubating a new venture through Alpha Venturi. This is an IoT / DLT innovation and venture studio based in Oslo.
These collaborative initiatives illustrate IOTA’s potential to reshape industries and public electronic infrastructure. While career opportunities at IOTA currently focus on core development research and engineering, its ecosystem of startups and businesses is sure to welcome a growing number of technical and entrepreneurial minds capable of innovating beyond the silos of organizations and business models. conventional business.
DLT as a financial turning point?
DAG Global represents a new generation of digital merchant banks. Since its inception in 2018, it has created the infrastructure to take legal deposits from cryptocurrency companies and, in turn, make loans to small and medium-sized businesses. A full UK banking license application is now underway with PRA and FCA.
In addition to its planned fiat banking activities, DAG Global plans to manage cryptocurrency-backed banking as within traditional banking frameworks. If a company wants to borrow money, it can pledge cryptocurrencies as collateral; if a company wants to earn interest on its cryptoassets, it can deposit it in the bank.
Clearly interesting challenges arise from accepting deposits or issuing loans through financial instruments whose value shows very high volatility. But Sean Kiernan is confident that this new business model will have many customers in the future, as evidenced by the acceptance of such loans on other non-banking platforms. For the time being, DAG Global is looking for traditional bankers with an affinity for emerging technologies and an interest in reviving the merchant banking business model for deep customer engagement.
TradeIX is one of the founders of the Marco Polo Network, a rapidly growing distributed trading and working capital financing system. Based on Corda’s enterprise-grade DLT protocol, the network allows companies to manage trade finance transactions connected to their ERP platform using their own interfaces. It also allows participating companies to store business data on the blockchain, enriched with automated contract execution, identity management, asset verification and monitoring.
The network already has over 35 major banking partners such as ING, DBS Bank and Bank of America. It works with a number of business partners including Accenture and Pole Star, as well as technology vendors like R3 and Microsoft.
While in its most generic form, blockchain allows all members of the network to see each other’s transactions, Marco Polo’s Corda implementation allows users to restrict who can see transaction data, making it ideal for exchanging information about the commercial finance. The Marco Polo network is currently seeking candidates with experience in trading and working capital financing and with SaaS technical solutions and distribution experience. Of course, it is also open to new network partners and companies looking to improve the performance of their working capital.
DLT is starting to pay off
This seminar shows that new business models have developed in the DLT ecosystem. Some players, such as IOTA, provide technological infrastructure that machines can use in the near future to power smart cities. Others, such as DAG Global or TradeIX, separate traditional banking (merchant banking and trade finance, respectively) and bring it into the DLT space.
This technology is slowly ceasing to be a hammer in search of the proverbial nail. It is starting to at least partially deliver on the promise it had several years ago at the start of the DLT / blockchain / crypto adoption cycle. While these projects are overshadowed by speculation around Bitcoin, they could represent both significant innovation opportunities and new business models that aren’t tied to the price of Satoshi Nakamoto’s creation.
Andrew Shipilov is professor of strategy and chaired professor of international management at INSEAD John H. Loudon. He is academic director of the Management of strategic partnerships and alliances as well as the Building partnerships and digital ecosystems programs.
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