„If data is the new oil, than DLT systems are the new combustion engines.”
Q1. Why Blockchain is important?
Many believe that the features behind Blockchain, or more generally speaking, Distributed Ledger Technologies, may become as important or even more important than the Internet. Blockchain may help to enforce business logic within transactions across several stakeholders within a supply chain, thereby minimizing transaction costs, providing a transparent economy where transparency is needed.
Q2. What are the pros and cons of Blockchain?
DLT systems are end to end systems that allow for an optimization of information flows and exchange of property rights in a wholistic way. As that requires to design and implement decisions rights, incentives, and accountability for all stakeholders involved, it is a potential and challenge at the same time to model such systems. In addition, several technical elements of DLT systems are still under development, so we cannot speak of a mature technology yet.
Q3. How is Blockchain going to change the nature of work?
In the emerging field of Blockchain economics we are looking into economic institutions, practices, and inter-organizational routines. Some procedures exist because of manual approval is needed, or uncertainty exists. Blockchain may alleviate some of those challenges. With an adapted mechanism design, Blockchain-powered processes may re-engineer the way value is created and disseminated in economic systems. Value creation in decentralized virtual networks may even challenge the need and legitimacy of companies. We often think about the transition from “the nature of the firm” to the “nature of human enterprises”, where we are all individual contractors, cooperating in loosely coupled networks to perform services, while the network is enforced and value transition is guaranteed through DLT systems.
Q4. What are the current projects at the European Blockchain Center ?
At the European Blockchain Center, we do research and education for innovation, standardization and regulation. Along different projects where we develop use cases, benchmark tests, or alternative mechanisms for DLT systems. Our research allows us to create teaching material for our educational programs on graduate and post-graduate level, as well as to influence international standardization around DLT systems and regulatory frameworks in Europe. For example, in a project we just concluded for the European Commission, we developed a benchmark test for comparing different DLT systems and applied it to test and evaluate DLT systems and their applicability to measure and ultimately reduce CO2 emissions of all 296 million vehicles on European roads. The work provided insights into governance issues as well as regulatory requirements which help us in the development of useful Blockchain standards at ISO, or to develop a European Blockchain Services Infrastructure with other European member states, where we are also involved.
Q5. What is Blockchain for science?
The European Blockchain Center is founding member of Bloxberg, an initiative that has been initiated by the Max Planck Gesellschaft in Germany, that has as goal to develop a global DLT-powered network for scientists to work together. Projects will be the safe exchange of certificates, as well as ensuring the safe exchange of valuable research data, co-authorship on complex research papers, open reviewing, open publishing, and many more. We are just at the beginning to explore the potential use of DLT systems for science, but it is clear that in a post-factual world, there is a need for a reliable system in science that guarantees a single version of truth, and that provides the incentive mechanism for scientists to collaborate on a global scale.
Q6. Artificial Intelligence and Blockchain: How do they relate to each other?
We believe that the first wave of digitization is coming to an end, with a digital world characterized by reactive automatic systems. The next digital wave will be proactive and autonomous, where machines make decisions on behalf of their owners, while those decisions are enforced autonomously in inter-organizational systems. To use an analogy: While AI might become something like the brain, DLT systems are the neural networks that execute the decisions. That is why the discussion around industry 4.0 often feels so shallow: we talk too much about the machines and their sensors, which are in my example the muscles. We do not focus enough on the neural network and intelligence part, where AI and Blockchain combined will unfold their full potential. Unfortunately, this is still not fully understood by decision makers in industry and politics.
Q7. Artificial Intelligence for the Financial Services Industry. What challenges organisations to succeed?
The challenges mature industries such as the Financial Services industry are facing do not start with Blockchain. For many companies and industries, digitization is still an option, while for digitally born companies and industries, digitization is a necessity. That needs to change. Digitization is a necessity for all. Thus, industries need to develop a digital mindset that perceives digitization as necessity, processes need to be digital by default. Only then companies can re-engineer their processes or develop completely new ones and fully realize the potential digitization is providing.