Blockchain Basics: Finding Value in Distributed Ledger Technology
Ask people what they know about blockchain and you get a one-word answer: Bitcoin. But what are the business implications for blockchain that go beyond creating digital currencies?
The panel discussion, “Finding Value in DLT” at The Blockchain Event at ITEXPO in Fort Lauderdale, FL, on Feb. 13 set out to answer that question. Gathered on the panel were three representatives of companies ready to do blockchain business, along with one panelist who’s implementing blockchain technology in a highly regulated arena.
The panel was hosted by Erik Linask, ITEXPO conference director at theblockchaindomain. Panelists prompted to explain where they think the value of blockchain lies outside the digital currency realm.
“Cryptocurrency is the killer app of blockchain today,” says Sunayna Tuteja, managing director of digital assets and blockchain at TD Ameritrade. She acts as an advocate for blockchain projects at her firm.
Resistance from entrenched leaders is everywhere, she says. Tuteja says to take it slow. First, determine whether you really need blockchain by asking:
- What’s the problem we’re solving?
- Why are we solving this problem?
- Is blockchain the answer to this problem?
“The technology is still nascent, it’s exploratory,” she says. “Tangible value for the long term is hard to find.”
Sharon LaDay, IBM’s blockchain ecosystem leader, agrees that the business case for blockchain sometimes is difficult to make. “Are you solving a business problem that impacts people to make more money or upgrade more efficiently?” she asks.
Delay looks first for experts in their field, people who have “deep expertise in the processes.” She also likes to speak with people who want to solve existing control problems.
“Basically, it’s a modern database,” says Scott Benson, chief executive officer at blockchain database management firm Fluree. Benson’s company offers a blockchain development platform for businesses.
“I think blockchain is going through an identity crises,” says Aaron Newman, co-founder at BlocWatch, a blockchain services firm. “We really don’t know what it is.”
Benson agrees. “Some people say it’s a solution looking for a problem,” he says “It’s a polarizing topic.”
“In my family, I’m totally allow to talk politics at the dinner table,” Tuteja says, “but I can’t talk about blockchain or crypto.”
Many of the current applications involve contracts via blockchain. If the contract is run through the chain, partners no longer how to reconcile opposing ledgers. “Dispute resolution is the low-hanging fruit,” Delay says.
“Anytime people have a contract together, we see opportunity,” Newman says. He says another roadblock is the difficulty of working with blockchain. “It takes weeks to set up a blockchain ledger now,” he says. New tools, and wider adoption, should help ease that burden.
Tuteja sees a future for DLR in the financial world, once the legal niceties are ironed out. “I can’t tell you how much paper there is in our industry,” she says. Beyond contract replacements, she says tokenization can make non-liquid assets – such as real estate or art – more liquid.
But that’s for the future. For now, the panelists see themselves as advocates more than salespeople. “If our clients are going to engage in this asset class, it’s incumbent upon us to educate them about it,” Tuteja says.
Edited by Maurice Nagle
