What does it mean for businesses now?

by Arthur · August 12, 2022

The days of viewing blockchain as a digital McGuffin that is supposed to solve ambiguous needs may be waning, but questions remain about what makes sense for businesses to get out of it. Speaking with blockchain experts from 0Chain and Cleo provided a perspective on realistic expectations organizations can have for the blockchain that goes beyond lofty ambitions and hype.

The roots of blockchain may be strongly associated with cryptocurrency, says CTO John Thielens with Cleo, but today it assumes a variety of forms and uses. Cleo is the developer of a cloud-based ecosystem integration platform. Part of what makes blockchain interesting is the idea of building a community around a domain of common interest, he says, where there is no centralized trust authority, but the community has a bond of trust. “How to get it implemented is still a challenge,” says Thielens.

Saswata Basu, CEO of 0Chain, says the crypto industry has gone through several innovations, starting with currencies like bitcoin and evolving into smart contracts. Then came DeFi (decentralized finance), he says, which has gone through some growing pains, as well as NFTs (nonfungible tokens). “NFTs are very useful,” says Basu. “It is a growing market and is established to a certain extent. NFTs, we feel, are going to be key in adopting decentralized storage.

Current decentralized storage has yet to become mainstream, he says, but 0Chain believes it can change that by promising comparable or improved performance over existing services. “The demand is there, but it hasn’t translated into adoption yet,” says Basu. His company provides a decentralized storage network solution.

Crypto market development

A further evolution to the crypto market may be necessary, he says, to go beyond NFTs. “Right now, the crypto economy is really NFTs. There’s nothing to hold on to,” Basu says. “You need another economy to grow it.”

B-to-B processes and the supply chain, says Thielens, have been looking for interconnection with the blockchain, especially to address points of friction in creating communities in these areas, such as the speed of creating integrations and technical relationships. “These relationships need to move in an automated way at the speed of the business,” he says.

An interoperable mechanism such as a blockchain-powered service could be attractive, says Thielens, where the contract to participate is standardized and provides access to a pre-screened, trusted community of trading partners. It may be a simpler approach, he says, than looking for new trading and logistics partners to deal with any disruptions in a delivery system and get them on board.

Thielens mentions the IBM Food Trust project with Walmart, to track where fresh vegetables come from, as an example of blockchain winning out. “A grocer can very quickly onboard a new farmer, yet know they can track down any kind of health threat without having to go through a much more complicated onboarding process to ensure they’re complying with food safety regulations,” he says.

There may be more to blockchain that stems from the creation of trusted relationships and community rather than just the use of technology, says Thielens. “In a private service, the technology is not directly exposed to the participants. We have had manipulation-ready databases and immutable audit trails – we have had technology like this for decades, he says. “You can use older technology; you can use Hyperledger or a blockchain-powered infrastructure. Somehow it doesn’t matter.”

What matters more, Thielens says, is bringing people and organizations together around a standards-based trusted community that enables quick connections with others. Whether this happens across the market is still difficult to say, he says. “Outside of a few pockets, I think it’s still early days.”

Different business needs can put some parties in conflict when it comes to the possibilities blockchain offers for the future. For example, Thielens says the business may be able to switch suppliers or logistics partners quickly, but the service providers are likely to keep those customers in business with them. Blockchain, if there is a standard, interoperable hub, promotes fungibility, he says. “It’s kind of like open banking versus customized services that banks want to offer,” says Thielens. “Banks want their customers to be sticky, and the open banking initiative wants banks to be fungible.”