Ideas Abound for Business Blockchains, But Who's Going to Pay?
With fatigue for trials setting in, business blockchain builders are talking creatively about how to handle the costs of distributed ledger networks.
After a seemingly unending period of blockchain R&D, major enterprises are eager to edge their technology toward production.
At least that was the sentiment at Blockchain Expo Global on Tuesday, where attendees at the Olympia London venue assembled to hear from experts in supply chain tracking, energy, logistics, freight and more – all of whom have been working to apply distributed ledgers to incumbent business problems.
Citing an unprecedented convergence of technologies, speakers often sought to sound the bell about a coming revolution in efficiency that could be unlocked should enterprises find novel ways of deploying the tech.
Indeed, Vincent Doumeizel, vice president food and sustainability at the non-profit Lloyd's Register Foundation, went so far as to call blockchain a missing piece that would "completely revolutionize" the food industry.
However, he admitted there's been plenty of talk and not much action.
He told attendees:
But while there are creative ways to merge IoT, blockchain and other innovations that might someday revolutionize the food supply chain, Doumeizel said progress is likely to be stymied by high costs, ones he argued might ultimately land with the consumer.
Others appeared less sure about how to handle the economics of business blockchains.
Mark Deansmith, CIO at animal nutrition company AB Agri Ltd, for instance, said his company has a visibility into the diet of 20 percent of the chickens on the planet, but a key missing component is a link between its physical products and a system that can track them.
Mixing near-infrared fluorescent (NIRF) markers and blockchains could do the job, he said, though he questioned how exactly such a system would justify its roll-out.
"We have done a pilot with this technology. In terms of traceability of supply chains, blockchain fits with NIRF, IoT alongside audits. This is not beyond us," he said. "But the question is, who is going to pay for it?"
Elsewhere, this question of cost was broached as one that could perhaps be solved more creatively.
Richard Stockley, head of blockchain for IBM in the UK and Ireland, said that where some participants are going to gain more from being on a shared ledger, some sort of governance can be applied.
"There may be a need to subsidize points in the network where data is worth more to certain parties. It's all about how we collaborate," he said.
Talking on a panel about blockchain in logistics and transport, John Kingston, executive editor at the trade publication FreightWaves, said many consortium efforts come up against the "free rider problem."
In such cases, there are a few players who shoulder the costs building the network, while others simply join it and reap the benefits without incurring anything. Notably, one solution might be for businesses to embrace open blockchains with some form of token, he said, adding:
Still, Lloyd's Register Foundation's Doumeizel argued that consumers might be willing to shoulder some costs, as organic branding has shown people are willing to pay a little more for their food.
"Millennnials in particular want to know where their food was sourced and would be willing to pay for the assurance it was sustainable," he said.
However, other speakers pointed to an ongoing fatigue affecting the enterprise blockchain space.
AB Agri's Deansmith said firms are also hamstrung by what he called the "Betamax worry," a reference to an early type of videotape format that lost out to VHS.
"The tech is moving so fast how can you tell what it will be like in five years time. Should we wait a year before investing?" he asked.
That wasn't to say others don't think a change is on its way. Julian Gray, the technology director for BP's digital innovation organization, cited estimates that there have been some 37,000 blockchain trials to date.
"That's enough, I think. We know it works. To get investment behind this, we need to see production," he said, adding that BP intends to help pave the way.
In a talk that embraced some of the more experimental concepts in blockchain, Gray sought to position BP as a company ready to do what it can to move the industry forward.
He told attendees:
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