The latest buzz on blockchain for business

There has been plenty of buzz and bluster around blockchain technology over the past few years, but if one thing was clear from our time at Cordacon 2020, it’s that blockchain is most definitely here to stay.

Our key takeaways from CordaCon 2020

Leading blockchain conference Cordacon went virtual this year, spanning 3 days of seemingly nonstop content across the APAC, EMEA, and Americas time zones. Cordacon is the flagship event of software company R3 and its blockchain platform Corda, which was built specifically for enterprise use. The conference brings together 5,000+ industry leaders and technologists from across the globe who are exploring and building upon Corda to foster digital transformation and industry innovation. 

As we’ve said before, if there is a silver lining to this year it’s the newfound ease of access to some of the best B2B events and this is one we couldn’t miss. The Earnezt team dove into as many sessions as possible. Our mission: to get past the smoke and mirrors around blockchain and garner real insights into how the business world is thinking about and using the technology. Here are our key Cordacon takeaways around the current blockchain climate, global use cases and real applications being built today, how businesses are evaluating the investment in blockchain technology, why collaboration is critical, and what’s next in enterprise blockchain.

The state of enterprise blockchain

There has been plenty of buzz and bluster around blockchain technology over the past few years, but if one thing was clear from our time at Cordacon 2020, it’s that blockchain is most definitely here to stay. To help demonstrate the evolution of enterprise blockchain, David Chreng-Messembourg of LeadBlock Partners first outlined how the ecosystem is split into three layers: 

• Protocol or blockchain platforms like Corda
• Infrastructure that facilitates the interaction between players
• Applications on which enterprise solutions are built

While the period of roughly 2009-2015 focused on the first two layers of platforms and infrastructure, the current period in blockchain’s evolution focuses on the application layer. The conversation around blockchain is no longer one of “technology for the sake of technology” but of real solutions — the tangible and actionable ways in which the decentralized nature of blockchain can solve for an array of business challenges and inefficiencies. What’s also become increasingly important is the ability to extend the technology by building additional solutions on the same underlying network and technology.

Real-life success stories and use cases

The promise of blockchain technology has already been realized with a host of deployed solutions, as discussed by R3’s CEO David Rutter. The Spunta project, built on Corda Enterprise by SIA and governed by the Italian Banking Association, was designed to tackle interbank reconciliation and already has 100 banks involved, representing 91% of the Italian banking sector. DV Ventures’ Procure-to-Pay invoice financing platform has been shown to reduce overall procurement process times by over 50%, and costs by nearly 70%. Building off the success of SIX Digital Exchange (SDX) in 2019, global exchanges continue to embrace the idea of regulated digital assets with Nasdaq announcing they will be using blockchain to deliver end-to-end trade lifecycle solutions. 

With the current pandemic exposing the weaknesses of a paper-based economy, we are at an important point in the evolution of money as we know it. Central banks across the globe are exploring Central Bank Digital Currency (CBDC) and Riksbank of Sweden has already launched a pilot for e-krona.

Blockchain has the ability to transform industries beyond capital markets.  A wealth of other high potential use cases were detailed by panelists throughout the event, including: 

• Using blockchain to enhance visibility across physical and financial supply chains to combat trade based money laundering (TBML)
• Creating more resilient, sustainable, and efficient supply chains by optimizing KYS (know your supplier), contract management, cash management, and track-and-trace goods management 
• Building immutable systems to ensure accountability and transparency for responsible AI
• Reducing friction, trust barriers and overhead costs in the cannabis industry with smart contracts
• Modernizing processes and creating operational efficiencies across the insurance industry, from reinsurance placement and COI (certificate of insurance) verification to claims settlement
• Creating solutions for the energy sector to reduce carbon footprint

The power of collaboration

One of the major themes of Cordacon was how critical collaboration is in creating high-impact blockchain solutions. Getting the most value from blockchain solutions often requires the engagement of a variety of parties, including FIs, corporates, exchanges, governments, regulators, and software firms. 

In the case of combating trade-based money laundering, governments are setting up public-private platforms to facilitate the digitization of trade with a focus on greater information sharing. With a consortium approach, parties are not only able to solve problems at an industry level but are also able to mutualize the cost of the solutions. 

The importance of public-private partnership was also discussed at length in the CBDC session. The expert panel of leaders from the Federal Reserve Board, IMF, Accenture, and Bank of England spoke to the strengths of a two-tiered approach — the creation of CBDC infrastructure by central banks by which the private sector can plug in to deliver innovative solutions. They suggested a public-only approach wouldn’t be competitive due to functionality being solely provided by banks and could raise questions around privacy. By combining the strengths of the public sector (infrastructure) with the private sector (UX, agility, innovation), you can create superior CBDC solutions. 

The role of blockchain platforms in advancing solutions makes a difference, too. As David Chreng-Messembourg of LeadBlock Partners put it, “collaboration between blockchain protocols like Corda and entrepreneurs in the B2B blockchain space will help not only build better solutions but more relevant ones.” R3 has played its part in fostering collaboration across the ecosystem, having launched a CBDC working group in September to help establish technical and government requirements alongside 35 central banks, institutions like the IMF, major consultancies and software firms. 

How to evaluate potential blockchain solutions

With so many ways to unlock value with Blockchain, how can corporates, software firms and institutions know what solutions to build for? 

Puneet Singhvi of Citi Institutional Client Group outlined four critical aspects that need to be addressed for blockchain adoption: 

• Markets are social in nature — a network is critical and ecosystems need to be created around solutions in order for them to drive value
• A clear cost benefit and understanding of the business case
• Adherence to legal regulatory structures: are the necessary requirements being met by the solution?
• Underlying technology: does it meet core requirements?

Patrick Schmid of The Institutes further explored the business case aspect by sharing the ROI modeling created by RiskStream Collaborative as they identify and build solutions in the insurance industry. Using employment data, they have created an interactive framework through which different parties like carriers, brokers and reinsurers can enter their own data to calculate estimated cost benefits for different use cases. 

In terms of underlying technology, it’s critical that the platform meets certain standards for enterprise use, including security, privacy, scalability and resilience. With Corda designed from the start with enhanced privacy and security for enterprise use, it is widely used by businesses investing in blockchain. Other platforms that started as public blockchains have had to retrofit their platform to meet enterprise requirements. 

What’s next for enterprise blockchain

With many successful projects underway, the future looks bright for enterprise blockchain, as noted by Alexander Ross, Investment Director at Illuminate Financial:

“This is an exciting place to be in — it’s the place to be in. People overestimate the impact of technology in the short run but underestimate the impact of technology in the long run. We’ve been through the blockchain winter and there are a lot of exciting initiatives going on. I think in 4-5 years time we’ll look back and say the impact this technology has had on enterprises is enormous.”

Some of the projections regarding the future of enterprise blockchain included the increase in new solutions being built on underlying infrastructure and existing nodes, optimizing overall implementation effectiveness; the realization of larger scale projects that have taken longer to advance than more focused initiatives; the inevitable push towards tokenization with the broadening and deepening of its usage across economies. 

With blockchain poised to transform how most, if not all, industries operate, it’s safe to say the Earnezt team will be watching this space and how it impacts the world of B2B with great interest. 

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Photo by Pascal Bernardon on Unsplash

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