"Whatever we build today will probably have to be changed again."
So said Eiki Hatakeyama of the Western Asset Management Company, highlighting a sense of realism that came through in a series of workshops sponsored by distributed ledger consortium R3 during CoinDesk's Consensus 2017 conference.
Discussions revolved around the rapidly changing marketplace – and the difficulty of keeping up, even within industry consortia that bring together a wide array of stakeholders.
For that reason, he explained, his fixed income investment firm was "okay with dragging our feet a bit just a little bit longer to see how this technology changes".
David Sullivan, a VP for insurer MetLife, echoed that sentiment, joking that:
"You're ok with dragging your feet a little bit, we're dragging our feet a lot."
Keep on moving
In spite of the uncertainty surrounding the technology and its applications, some panelists stressed the need to experiment and think big.
Chris Swanson of US Bank pointed out that most current proofs-of-concept that exist today are on such a small scale that they're "almost not real". He urged financial enterprises to focus their efforts on one thing they're comfortable with – and then move on it.
"Getting something real to market will get us so much data," he said.
Panelists advocated for a more gradual process, however. Jennifer O'Rourke, blockchain business lead for the Illinois Department of Commerce and Economic Opportunity's Office of Entrepreneurship, Innovation and Technology, pointed out that to get buy-in from both colleagues and the markets you serve, you need to be able to explain the tech and to calm any concerns.
She went on to say:
"You can't use the Uber approach of just plowing forward."
O'Rourke later pointed out that, in her opinion, any distributed ledger technology application would be implemented gradually, on top of existing processes.
Hatakeyama also expressed the need to move carefully, recommending that businesses start with a low-volume area of their business.
While Corda itself may have advantages for the market its targeting, several panelists strived to highlight the risks of choosing one system over others.
Swanson of US Bank pointed out that one of his biggest concerns was interoperability over the next couple of years. He also highlighted the overlap between several of the consortia out there, especially when it comes to asset representation.
Andrew Golomb, an equity investments director for Bank of America, invoked the difficulties of balancing one's own interests with those of the consortia. He argued that a consortium could fail if members move to protect themselves too much.
"The whole point of a consortium is to enhance competition and bring down costs," he said.
Jenny Cieplak of Crowell & Moring recognized the concern, and that it was a challenge for consortia to come up with an intellectual property structure that gets everyone comfortable with sharing.
Along with the other panelists, though, she believes that enterprises have a better chance of getting things done when working together – and that people are more likely to trust a consortium than an individual financial institution.
"It's about developing a framework for the sharing of ideas, even if not sharing code or technical design."
Image by Noelle Acheson for CoinDesk