Blockchain: hefty investments, but little knowledge

Almost half of Dutch companies will invest in blockchain next year, but the majority of organizations do not really know what exactly the technology entails. This is according to the Future of IT survey by software developer Topicus. ‘Companies find the decentralized nature problematic.’

More than half of Dutch IT decision-makers label their own level of knowledge of blockchain as substandard, with 12 per cent indicating they do not even know how blockchain works at all. Nevertheless, 38 per cent do see that the technology offers substantial added value to their organization over existing technologies. "Most people working in IT struggle to think in decentralized structures," explains Daan Dijkhuizen, CEO at Topicus. "They are used to centralizing as much as possible and sticking to a single point of truth." He sees that organizations can only become familiar with blockchain when they start working with it.

Inform and experiment

By that, he does not mean immediately allocating large investments in huge and complex experiments. ‘No, start small and with limited investment first. Take your time and make sure you gather knowledge about blockchain technology. Only that way can you assess what value it can bring to your organisation.’ Before the experimentation phase comes the crucial information phase, according to Dijkhuizen. ‘There are now a number of fairly mature platforms in the Netherlands, such as the Dutch Blockchain Coalition and R3. Subscribe to newsletters, see what initiatives there are and, above all, look for the failed blockchain projects, because from these you will get a wealth of information.’

Meat passport

There are quite a few failed blockchain initiatives to learn from, he argues. But there are also examples of chains that have already managed to extract added value from the technology. Take, for example, the recently introduced meat passport. ‘The entire pork production chain, from farmer and abattoir to distributor and shop, is registered in blockchain by all parties involved. By recording the full path of meat in blockchain in a way that cannot be mutable by other chain partners, quality and food safety can be guaranteed. This is a great initiative from which much can be learned by, for example, the metal sector or other industries with a complex supply chain.’

Another way for a Dutch organization to gain knowledge about blockchain is by connecting some of your best techies to large development environments used to build blockchain projects, such as Etherium. ‘That also has another user group, ETHCC, where people get technical content on blockchain.’

Added value in chains

That blockchain is the future, Dijkhuizen has no doubt. ‘The disappointment surrounding crypto-currencies has now settled down a bit and from beneath that comes the true potential of this technology.’ He gives the example that blockchain can play a shining role in the field of securities and bond holdings. ‘That is currently still kept in so many different administrations, at the stock exchange itself, by banks, by asset managers and by clients themselves. All those administrations have to be reconciled by tens of thousands of people with all the potential for errors. If you can record this decentrally in a blockchain, you will gain so much.’

Smart contracting

Smart contracting is another possible application of blockchain. ‘It is basically a smart layer on top of the blockchain in which you can record certain business rules,’ explains Dijkhuizen. ‘For example, in the healthcare sector, for certain budgets, such as the personal budget, you can record how and on what the money may be spent. Now you have to check afterwards whether you spent the money according to the rules of the healthcare law and insurers. That is error-prone and labour-intensive. Why don't we lay that down in advance? Then you don't get the money spent when it doesn't meet the conditions you give it with.’ 

Working together and getting started

So there is still plenty to learn and experiment on with blockchain, but the technology and its actual use is closer to us than most organisations think. ‘This is why I advise organisations that have an important role in a logistics or financial administrative chain to join partnerships such as R3 or the Dutch Blockchain Consolidation as soon as possible. That helps you gain knowledge and draw on existing expertise,’ says the Topicus CEO. ‘And above all: start experimenting.’

Source: Focus on IT