Startup Stories: Blockchain – moving from exploration to application

The first in the series of tsf.tech sponsored Startup Stories breakfasts, organised by Manchester Digital, took place last Friday morning at the inspirational MSP Tech Incubator building. The theme was Blockchain: moving from exploration to application, with an informed panel of evangelists, practitioners and consultants, and an audience eager to hear more.

The Blockchain industry and its taxonomy are still in development. The first generation of the digital revolution brought us the Internet of information, the second generation powered by Blockchain can bring us the Internet of value. Is it two or five years away from reality, or is it just hype and Emperor’s New Clothes?  Is the noise around Bitcoin holding back the vision for Blockchain?

The mood amongst the croissants and coffee summed up this mixed sentiment – Bitcoin – it’s gold for nerds; Blockchain – It’s a technological tour de force. For Manchester to be a world-leading tech hub, the tech community has to be at the forefront of innovation, and unlocking the potential of new tech such as Blockchain and navigating the hype and controversy of Bitcoin, is essential.

The panel – Dr Mohammad Hajhashem (Commercial Director, Urban Chain), Hannah Drake (COO, Energi Mine), Muhammad Asim (CEO, Arro Money), Andy Gray and James Morgan (BlockRocket) – represented Manchester’s Blockchain pioneers and practitioners. They were insightful and entertaining, sharing their views – and more importantly, their practical experience, of working with the technology across a number of use cases and applications.

Everyone cited the key benefits of Blockchain technology as the distributed infrastructure’s ability to share information that is secure and provide for the unalterable transfer of data, ensuring data integrity. Put simply, it is a refined method of relaying and verifying information.

However, whilst this has application in financial services, energy and everyday e-commerce, the lack of integrity and trust around Bitcoin – due in part to the lack of transparent regulation – was seen as a barrier to mass market consumer confidence and faster, widespread adoption.

Blockchain technology’s inherent strengths of asset creation, asset transfer and data reconciliation were unpacked and shared with the audience, including the pitfalls and future developments around secure tokens and decentralised apps. It became apparent that more education and awareness around the potential of Blockchain is required to build confidence in the integrity of the new technology.

Muhammad explained that in financial services, the Blockchain concept comes to life. When we consider international bank transfers, traditional methods usually take 3-5 days with both parties waiting for each bank to process the transaction and pass it on the next. Equally, the clunky and unfriendly process for opening a new bank account. In comparison, Blockchain would allow both of these transactions to take place instantly in a cost-effect, encrypted, fully traceable and timely manner.

Andy highlighted Smart Contracts, enabling companies and individuals to settle contracts and transactions quickly and efficiently. Removing the need for intermediaries, Blockchain will enable a huge reduction in the cost of transactions. This has knock-on effects for many industries such as property – the UK’s first recorded Blockchain property transaction took place in – where else – Manchester – https://www.buyassociation.co.uk/2018/03/19/uks-first-Blockchain-property-purchase-recorded-in-manchester/

Hannah agreed that the technology is in its infancy, with many unknowns regarding its impact. Many focus on the pure financial aspects, but there’s great potential in bringing Blockchain innovations to the different aspects of people’s lives as Energi Mine is seeking to do. 

James shared his thoughts on the prominent current developments, including non-fungible tokens, securitisation, and identity. Non-fungible tokens allow for unique assets to be generated and sold on the Blockchain, for example art. Securitisation is also a hot topic, coming from the ICO (Initial Coin Offering) craze in 2017, we see a movement of companies offering traditional securities issued and traded on Blockchain based platforms.

The panel were vocal and united around the negative impression and shabby reputation of Bitcoin, and the trading ICOs. The virtual currency systems have eschewed a central authority for issuing currency, transferring ownership, and confirming transactions. The mood in the audience was as you’d expect, we don’t fall for the hype in the North. As you were, Manchester.

Andy described how ‘tokenisation’ could impact the future economy, including the transformative power of microtransactions, which could revolutionise payments in developing countries, as well as being implemented into the internet of things with real-time payments. There was some debate from the audience as to the value of the tokens, aren’t they just another ‘currency’, and in a world of e-payments, what’s the benefit?

The panel’s conclusion was that the noise and froth of Bitcoin was detracting from the potential technology advantages of Blockchain, but we should stick with Blockchain as it has the potential to universally reshape the way business transacts across every industry in the economy.

So, a good hour’s informed debate and discussion, here are the key takeaways:

  • Blockchain is a foundational technology, it has the potential to create a new era for our economic and social systems. This needs more time and energy for education and awareness, because firstly, users need to understand how the innovation works, and secondly, legal and regulatory systems need to get engaged in this fundamental change.
  • Blockchain is the tech, Bitcoin is merely the first mainstream manifestation of its potential. We need to focus of developing use cases and everyday applications for enterprises and consumers to move from the CryptoWinter to the CryptoSummer (via @awaygray)
  • Enterprise is taking Blockchain seriously, and Blockchain is taking enterprise seriously. Discussions referenced Microsoft’s Azure Cloud Blockchain Workbench providing pre-configured integration from front to back-end, all on the cloud, and Kaleido’s partnership with Amazon Web Services, which enables launching Blockchains in ‘minutes’.
  • Non-technology domains are becoming Blockchain savvy. Digital transformation is a multi-disciplinary challenge for any organisation, and Blockchain presents a new lens to transform how they create value. Leaders in domains from legal, supply chain, finance and Government are talking credibly about the opportunities and challenges of Blockchain, and we should expect to see a growing community of practice in this space.

tsf.tech is proud to sponsor and chair Manchester Digital’s Startup Stories. The events are always thought provoking and informative, with generous speakers and engaged audience. I’d like to offer a special thanks to the panelists who shared their time and insight, and Manchester Digital (Rachel and Michael in particular) who, despite rain of truly biblical proportions and rumours of a bloke called Noah spotted on Oxford Road carrying some wooden planks, ensured we had a great event.

The next Startup Stories breakfast is Friday 23 November, when tsf.tech will be leading a discussion on Design Sprints, a methodology developed by Jake Knapp at Google Ventures for introducing new products, sharing our experience on how to take this thinking into your own startup venturing.

 

 

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