As was said before, the motto for Blockchain fest Istanbul conference became the phrase “we unpack problems”. “Unpacking” is, of course, related to the sphere of the blockchain. Pınar Emirdağ from State Street (financial services company for big investors) has started her speech sharing her own experience of entering the arena of the blockchain. “When I started to be interested in the blockchain, there were just people interested in bitcoin. For the last years it was changing, the first blockchain was “bad”, then bitcoin, then again and vice versa. But the diversity cases, the property right, they were all the time there. We unpack problems nowadays”. One thing inspiring another, as the sphere is relatively new. So, should we still buy bitcoin, get rich off it and forget about the blockchain?
Dave Remue from B-hive (the fintech platform which is aiming to unite major banks, insurers and market infrastructure players) is seeing the technology of smart contracts that simply wouldn’t exist without the blockchain, which makes a remarkable difference for the individuals and institutions. “There are a lot of use cases that look very promising, but we are still in the learning phase, in terms of what the blockchain could be”. According to Mr.Remue now ultimate aim for the community is to answer the question of how we can produce new business models, for this disruptive technology.
Eamonn Maguire, Global Lead in Blockchain and DLT at KPMG (a professional financial service company and one of the Big Four auditors, along with Deloitte, Ernst & Young, and PwC) has put forward a term which was heard for the first and only time during the event: “operating efficiency (OE)”. Maguire considers OE to be a universal metric that would allow to understand the value of any given project. According to him, most of the blockchain implemented projects available now has an OE rating between 20% to 40%. He says: “…but occasionally some rare examples where we see the benefits from an operational efficiency point of view, are up to 62%”. He added that because blockchain will raise the overall transparency, accountability and responsibility - projects will be directly affected, which is generally seen to have a beneficial social effect.
Soren Fog from Iprotus&Crypto Valley association said that blockchain matters “because of what it can do tomorrow” … “the concrete results are already here, look at the supply chain. The blockchain implementation in this area. And it is not just about the less paperwork. Also look at the amount of money are put into some crazy ico's - it is madness.”
But all these projects, which might not survive later, are actually helping to achieve a good aim. People are making their own researches, gaining the awareness in the topic, starting to be interested and in the end, share the information. In order to firmly gain a foothold in the modern society and get guarantees so much is needed for big institutional investors, the blockchain technology should an by the regulators.
In this perspective Mr. Fog reminds that blockchain at its core is a piece of code, and he asks: “what actually regulation of something like that mean?” He adds: “we need to convince regulators that in the future they need to regulate what programmers program”.
It looks like Malta is thinking of this as it will soon license coders. Ian Gauci from GTC Advocates underlined that Malta will be the first country in the world who has prepared the laws, and a dedicated framework ready. He informed that a fully fledged ICO regulations will be in power by the first week of November when the Digital Innovation Authority will be active by then too. Gauci says: “You regulate because you see the need, we felt the need”.
“Every regulator has its own speed in approaching to blockchain technology”, says Dave Remue. And this approach is light, thanks to them, he continues. “Practice will tell, regulators will learn”.
Not every case where blockchain is nowadays being used is in need of regulators - that a notion with which the speakers on a panel have all agreed with, however, there are also ones who for sure should be regulated.
“For example the healthcare case. Blockchain in this sphere requires regulations”, says Eamonn Maguire. The healthcare started to massively adopt the distributed ledger. Because of the sensitive private data it consists, it is very important this information will not leak into unreliable hands. “But blockchain itself needs to observe,” - he ended.
Mehmet Sabir Kiraz, Director of Blockchain Research Labs at Tubitak, The Scientific and Technological Research Council of Turkey, explained the perspective of Turkish government regarding the regulations to expect in the hosting country: “As a Turkish government we need to understand what opportunities we can get and what threats are coming from the blockchain, the technology is new and it has still a lot of problems. We first need to learn it”
The spokesman for Iprotus&Crypto Valleys association has stressed that to regulate blockchain, authorities need to understand how it works. According to Soren Fog “We are not there yet.”
As for the future of regulations, Frank Guiader from Gide Loyrette Nouel, an international law firm providing legal consultancy to investment funds and governments has said: “We need to open the Pandora’s box, we have to work on new kind of risks and new kind of issues which didn’t exist before.”
Mr. Gauci similarly explains that to think that it will be possible and effective to be able to regulate something which didn’t exist before with the traditional regulations will not work. He thinks that the blockchain technology will require fundamental changing of the mind set of regulators.
Does that mean the way to mass adoption goes through the “unpacking” of regulators and regulations as well? Regulators are clearly on the learning path while there are plenty of cases from different industries where the blockchain technology is already being adopted.
According to Lisa Nestor, Director of Partnerships at Stellar, making the payments faster at a lower cost is a fundamental application. Especially if the traditional assets are digitized interoperable systems will benefit to the people who are underbanked. She says: “I want this technology to be something that makes people's lives better”.
Ms. Nestor thinks that the Industry needs multiple types of intelligence in order to make the projects.
CEO of Piprate, a blockchain-based platform for the insurance industry, Stan Nazarenko explained that blockchain was introduced to the insurance industry two years ago. With the new tech now compensations are executed immediately “trigger based”. Event, which creates the need for compensation by insurance is triggering the payment right away via blockchain.
Answering the question “when the blockchain will become mainstream?” Pinar Emirdag has said that at first we should stop talking during our business meetings about tokenization and blockchain while actually creating agreements in the sphere of blockchain and tokenization. “that will be the indicator of mass adoption” The common hype around the technology created the demand among the companies which actually doesn’t need a blockchain by people who don’t understand the uses of blockchain.
Sandra Ro, CEO at Global Blockchain Business Council (GBBC) has said that the first thing which is distancing people from mass adoption of blockchain is the fear. We need to speak and explain the benefits of the technology to those who are saying “blockchain is bad, bitcoin is bad,” because they are scared.