Blockchain in the tech de jour, but where to from here?
It’s the most talked about technology in a long time – and also probably one of the most ‘misunderstood’. It’s a lot more than Bitcoin, but maybe not as revolutionary as the steam engine (though that's up for debate).
2018 is an exciting year for Blockchain. It’s a ‘make or break’ year where proofs of concept will very quickly meet the real world. The path isn’t clear, and there are some big challenges still to overcome.
Two weeks ago we ran the APAC Blockchain conference in partnership with ADCA, and these are some the key ideas that I picked up, from the 50+ speakers and 450+ people in the room (and at the bars).
Regulation needs to be an enabler
Most agree that robust regulation is good for both blockchain and cryptocurrencies. By reducing regulatory and political risk and giving more certainty to investors, it creates an opportunity for blockchain and crypto to truly go mainstream.
Greg Medcraft, former chair of ASIC and current a director at the OECD comes across as someone with a keen interest in this technology, an excellent understanding of it and a real enthusiasm for its potential. He encouraged regulators to “develop the right framework to develop this exciting technology” - I think he is spot on.
The challenge is of course the ‘right’ regulation. Just enough, but not too much. Something that reduces risk, without limiting possibilities. It's a touchy topic and I don't expect to see it settled anytime soon.
I should note that obviously this doesn't apply to every application of blockchain technology and there are many that can be privately used and won't require regulatory oversight.
ICOs could transform the way start-ups raise capital
Raising capital is a difficult, costly and labour intensive process for start-up businesses, and more often than not it’s very difficult for anyone other than sophisticated investors to get involved (think VC funds and Angel investors). It can ultimately be a barrier to success.
ICOs – or Initial Coin Offerings – could change this, by offering a new way for these businesses to access finance in their early stages. Without trying to get into the details here (or pretending I can), here is a great place to go for ICO 101 - https://www.cryptocompare.com/coins/guides/how-does-an-ico-work/
This is one area where regulation is hugely important. Well regulated ICOs will increase the confidence of investors and help attract banks, mutual funds and others into this exciting space.
P.S. keep your eyes peeled for our ICO Summit later in the year.
China is charging
The event hosted a delegation of just over 50 from China, including 7 speakers. There is a misconception that with restrictions on ICOs and crypto trading, China is anti-blockchain. It is completely wrong.
We heard from WeBank, Zhongan Insurance, China Wanxiang group and more – all of which are significantly advanced in their blockchain projects and doing some truly ground breaking stuff. It's up to the rest of us to keep up.
Revolution? ...perhaps just an evolution
“Bitcoins are not coins and cryptocurrencies are not currencies” – These are bold words to say in front of a room full of people who are largely pro-blockchain and probably own a bitcoin (myself included). However, when it’s Lord Meghnad Desai, one of the leading economic thinkers of this century, you listen.
Big paraphrase here, but the crux of what I drew from Lord Desai’s presentation was that the macroeconomic impacts of bitcoin and any other cryptocurrencies will be minimal. This is not to say they won’t exist, or won’t be used, simply that they will just become a new way to transfer wealth and it won’t be the significant change of this kind in history. They may provide a better option for transferring wealth, they won’t shatter the markets we know today – just change them.
Blockchain is not a silver bullet fix for all our problems
Obviously ... right? With blockchain currently somewhere near the peak of the hype cycle there are no doubt some overly enthusiastic people right now who are looking to blockchain as a silver bullet fix to all their problems.
Lucas Cullen, who gave an excellent presentation titled “7 reasons not to use a blockchain” really drove this point home – you absolutely need to do a logic test before moving ahead with a pilot project.
The future is bright – especially for students at Melbourne Girls Grammar School
Blockchain can be a tricky concept to explain, and it still perplexes most of us. Surprisingly one of the most elegant explanations I have seen came from 3 incredible students from Melbourne Girls Grammar who we gave one of the keynote speaking slots at the event. They shared their views on the technology and some of the projects they have been working on in the classroom and at recent hackathons.
The future definitely looks bright.
Where to from here?
More interest in blockchain, means more ideas, projects and trials, which in turn leads to faster development. This is going to come with increased interest from governments and regulators across the globe, and how they react will shape the future of many blockchain projects.
The next 12 – 18 months will be extremely formative for the industry – expect big things!
Plug
We will be holding the APAC Blockchain conference again in March 2019 as well as event focused on ICOs and investment in blockchain technology in September. Stay in touch for more info.