By Angela Lawson, Senior Payments Consultant, Federal Reserve Bank of Minneapolis
Should blockchain be on the minds of business leaders? While it may be tempting to give a definitive “yes or no” answer, the practical response is, “It depends.”
In our AFP 2019 panel discussion, Avoid Mistakes: Make Fewer Assumptions About Blockchain, experts in banking, technology and finance will help you both understand the landscape of blockchain adoption, and steer clear of the hazards others have encountered in exploring a much-hyped, but complicated, new technology.
In the 10 years since the publication of the 2008 whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System, the potential applications of its proposed “chain of blocks” system has expanded far beyond payments. Proponents of the multiparty shared ledger, where the participants themselves contribute to the operation, security and resilience of the system without reliance on a single owner, have enumerated hundreds of use cases in various industries from land registry to healthcare. However, in the past year or so, what was once a multitude of potential use cases have contracted as business leaders ask themselves if blockchain delivers improvement over traditional solutions to their business problems.
There are some key issues affecting the progress of blockchain, which we will examine in the session. With their unique perspectives, our panelists will weigh in on how these challenges can potentially be overcome.
One key obstacle that blockchain faces is whether stakeholders can agree on it. “Blockchain can be a very effective way of keeping a group of participants on the same page regarding their transactions, but they aren’t much use if participants aren’t on the same page to start with” said Jesse McWaters, financial innovation lead for The World Economic Forum, and a member of our panel. “Success will require coalitions to be built, standards to be aligned, and liability frameworks to be defined if effective networks are to take root.”
Additionally, panelist Michael Concannon, vice president of technology at American Express, recently noted the challenges of working with outside partners who may or may not be as far along on the technology learning curve.
It’s no secret that blockchain is a very complex technology that can be difficult to implement. Panelist Jim Cunha, senior vice president at the Federal Reserve Bank of Boston, and his team, recognized the importance of hands-on experience. They recently published a whitepaper detailing both the successes and challenges the team encountered while experimenting with the technology.
What’s more, the terms often used to describe blockchain can be misleading. Words like “immutable” or “secure” are often problematic. Cunha was one of a team of contributors from around the Federal Reserve System behind the recent paper that discussed blockchain terminology. The contributors concluded that most of the terms used to describe blockchain technology are misleading. “The terms often suggest that the ‘natural’ design of blockchain delivers capabilities achievable only through specific design choices or with the addition of other systems or technologies,” they wrote.
WHAT YOU’LL LEARN
With this collection of practical experience, and insight from true experts in their fields, you’ll leave this session empowered with knowledge to make your own decisions about how, or if, blockchain should or could play a role in your organizations future.
Don’t miss our session, Avoid Mistakes: Make Fewer Assumptions About Blockchain, which is part of the Payments Track at AFP 2019. Register for the conference here.