Blockchain Platforms Like Hyperledger More Promising Than R3’s Corda: Deloitte

Like-minded people should connect, as this is the only way to drive innovation forward. We recently shared our excitement about Deloitte Germany becoming a sponsor and a partner at BlockShow Europe 2017 organized by Cointelegraph Events which is to come to Munich in just two days.

Cointelegraph Events is on a great mission educating and connecting people in the Blockchain industry to ensure it continues changing the world. With a partner like Deloitte Germany, Cointelegraph Events will certainly do more.

Anticipating the largest international Blockchain-related event to commence, Cointelegraph had a chat with Jens Hermann Paulsen, Senior Consultant at Deloitte Blockchain Institute (DBI).

DBI has been specifically set up as an industry and platform-agnostic, function spanning (consulting, legal/tax, audit) center of competence for Blockchain technology and is embedded in a broader EMEA and worldwide Deloitte network.

Paulsen explains:

“Our holistic approach enables us to not only focus on the technical capabilities of the technology but also to understand the legal enforceability of a case. We constantly work on the triggering of new ideas via point-of-views but also on prototyping and client projects which span from the integration of Blockchain into ERP-Systems to insurance or energy projects.”

Implementation of Blockchain is a bumpy road

Deloitte Blockchain Institute is actively researching Blockchain technology looking for areas that could indeed be improved with Blockchain. Implementation of technology is not an easy process which often meets a huge number of challenges.

For instance, adoption of public Blockchains might be hindered by regulatory hurdles, while severe security issues create obstacles on the way of integration of private Blockchain networks.

We have seen examples when investors and Blockchain partnerships came to an understanding that Blockchain might be not the best solution for financial and banking systems.

Paulsen explains:

“The mentioned issues and challenges all derive from the search for “the next big thing.” I think, regardless the industry, the focus should not be on huge use cases where Blockchain already acts as a game changer but on those where Blockchain can actually be beneficial now. Even if this is only a tiny area.”

Paulsen refers to issuing of energy certificates or bonded loans as examples of areas for Blockchain implementation that might have been overlooked. These tasks are heavily paper-based and it is hard to track for banks who is the actual owner of the bond.

He continues:

“Blockchain could therefore actually add value here. On top, this case is not regulated since it is part of private law. So instead of focusing on the whole stock market as an aim, look at processes that could be run more efficiently.”

Blockchain a perfect bureaucrat?

Blockchain technology is often referred to as the “perfect bureaucrat”, having a huge potential to improve the efficiency of relations between the governments and citizens. A number of projects popped up in Estonia, Sweden, Russia and Switzerland, which embraced the value of Blockchain for upgrading government services.

Paulsen told Cointelegraph:

“Blockchain could be a huge chance for governments and I am sure we will see more and more adoption within the next years. Digitization offers the opening of a direct communication channel between citizens and government, simplifying the communication in terms of speed, distance and opening hours. In addition, Blockchain could add more trust to this connection.”

While believing that Blockchain technology might have found one more perfect niche to revolutionize, Paulsen thinks that the speed of adaption, nevertheless, will be very different which is due to the state the countries are in.

He says:

“There are the Nordics/Baltics which traditionally are first movers in terms of governmental digitalization, which we also see right now with Sweden’s effort to record land titles on a Blockchain. Then countries that have a real need either because there are no working systems such as a land title registry or save votes and finally there is a group of countries that mostly benefits in terms of increased efficiency and not due to a high need.”

At BlockShow Europe 2017, Milan Sallaba, Partner at Deloitte and Technology Sector Head, will share company’s updates on bringing Blockchain technology into operations.

Welcome to the club!

There are numerous “clubs” nowadays which have been put together to research Blockchain technology. R3 suddenly fell out of love with Blockchain. Another open source collaborative effort, Hyperledger, is now working on promoting cross-industry Blockchain technologies. Certain questions arise concerning the motivation and efficiency of such efforts.

Paulsen comments:

“It largely depends on the setup. Creating a “one-size-fits-all” consortium is problematic from my perspective. Further, I think working in a closed shop anticipating to create a better platform than a whole community of interested experts is unrealistic. Therefore I think that models like Hyperledger are more promising than R3/ Corda – while industry consortia like b3i or TBCASprint can be very beneficial when only building on platforms with a mutual interest.”

Eyes set on Asia

A community of Blockchain technology enthusiasts has already proved, and not even once, to be more flexible, open, and ready for a change, sometimes even disrupting their own industry.

Inspired by a decentralized technology, the community showed that innovation really knows no borders, with regions eager to learn from each other, share knowledge and expertise. For instance, Asia seems to be a region to extract lessons from.

While the global fintech is growing rapidly, the industry seems to be booming in Asia and particularly in China. Here we turn to numbers - last year Asia surpassed the US and Europe in terms of investment volume in fintech industry reaching $1,2 bln vs $900 mln in the US and $200 mln in Europe.

Paulsen explains:

“Asia’s financial services sector is fast-growing and especially in China governmental seems to loosen which is why investors perceive (not judging on whether they are right or wrong) to have discovered a new high potential market. The more conservative investments in the US and Europe regarding fintech may be a result of the feeling that despite all the problems in the financial sector banks won’t vanish. The capitalization of US/European Banks vs. Asian might be another point.”

We’ve got talents!

One cannot deny that Blockchain revolution is marching across industries, but how to facilitate it? Industry experts often point out the lack of talents in the sphere. Let me disagree.

Recently, at Cointelegraph we ran a Blockchain Oscar, results of this awesome competition you all will see in Munich. But that’s not the point I am trying to make here. The amount of applications we have got exceeded all our expectations, so what kind of lack of talents are there?

There are talents, dozens of them, they only need to be supported and guided by more experienced colleagues, who would connect them to the industries needing their innovative solutions. This is one of many purposes of various accelerating programs.

Paulsen notes:

“Currently Deloitte Blockchain Institute does not yet run an accelerator for Blockchain startups. Evaluating whether an accelerator should rather be focusing on one technology or be centered on a specific industry is not easy. From my perspective, an industry focus could enhance the chance of connecting startups with global players. Large corporations might more emphasize on that a problem is solved and not with what technology.”

Nevertheless, Paulsen says that Deloitte is strongly emphasizing collaborative work with startups. The Deloitte Digital Disruptors is one example among a few. With “Bridge by Deloitte” Deloitte runs a successful platform with the purpose of connecting Enterprises and Startups.

He concludes:

“Focusing on Blockchain our approach is as diverse as the startups are. We have numerous strategic partnerships with Blockchain startups and create joint products. In Germany, a startup had its premise within one of our Deloitte Offices. Further, we both invested in startups (such as SETL) and also Spun-out a part of our team to create Nucoa and maintain a close relationship to established programs such as nexussquared.”

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