Gilbert Verdian, Founder and CEO of Quant Network, explains why recent developments in interoperability are likely to change attitudes to blockchain.
Ever since the development of the first cryptocurrency (Bitcoin) in 2008, blockchain technology has been hailed by many as a potentially transformative force; a technology which could invest industry and commerce with a new dimension of secure and cost-efficient connectedness. The possibilities seemed limitless. An ‘Internet of Trust’ was on its way.
Today, over a decade on, it is still to arrive — at least on a mass scale. While few would deny that the potential of blockchain as a force for good seems greater than ever, it’s equally hard to deny that, for most of the past decade, progress — in terms of practical application — has been slower than expected. It’s true that, after the inevitable early adopters, there have been some, even many, notable uses of the technology, but there’s also little doubt that its adoption has been less explosive than its reputation would seem to merit.
But is all that about to change? Could 2020 be, at last, the breakthrough year for blockchain: the year in which the tipping point is reached and blockchain truly starts to become a standard — perhaps even default — approach to connectivity in many sectors? Here at Quant Network, we believe that this could be the case. Why? Because we have seen, over the past year — and particularly in the last quarter of 2019 — a palpable change in the market attitude towards blockchain. This change, an increased level of recognition of the technology’s power and maturity, has manifested itself in a significant increase in demand for our own (blockchain enabling) technology. We feel confident that this trend will grow to the point where 2020 will be remembered as the year blockchain achieved mass implementation.
And there’s a significant body of evidence that this feeling is justified; evidence, in other words, that we are genuinely seeing the dawn of an era of mass blockchain adoption. Take, for example, the Deloitte 2019 survey Blockchain gets Down to Business1. This research polled a sample of 1,386 senior executives in a dozen countries, concerning the future of blockchain technology, and found that, for 53% of respondents, blockchain was a critical priority for their organisation in 2019 — a 10% increase over the previous year. The report goes on to say that blockchain is ‘gaining traction and acceptance in more industries’ as a result of “…executives increasingly expressing confidence in blockchains importance…”. It concludes that, today, the question for executives is no longer, “will blockchain work?”, but “will blockchain work for us?”.
The findings of the Deloitte report(1) are echoed by the 2019 Gartner CIO Survey(2), which found that 60% of CIOs expect some kind of blockchain deployment in the next three years, with financial services leading the way over the next 12 months, while ComputerWorld(3) notes that industry commentators expect 2020 to be the year that distributed ledger technology (DLT) matures. Further, Finextra(4), the leading independent newswire and information source for the worldwide fintech community, reported, in December 2019, that “increased maturity of blockchain technology will certainly trigger adoption in the coming year(s)”, and the cryptocurrency news site, Bitrates, labels 2020 as the year that we will see ‘blockchain revolutionise the data processes of many industries and governments.”
We could go on: many more informed sources voice similar opinions, based on experience and/or market research. But to continue quoting these sources would be to labour the point — which is that blockchain seems to be at the threshold of widespread acceptance and adoption. So let us assume that this is indeed the case, and turn to a different, but critical, issue: why? What has happened to trigger this relatively sudden change of attitude; this crystallisation of exciting potential into imminent reality? The answer to this question lies in understanding what’s been holding blockchain back — the concerns, in other words, which have prevented organisations at all levels from committing to the technology on a mass scale.
There have, in fact, been several such concerns in recent years, all of them legitimate. One of these is the need for standards and regulation. Historically, blockchains have been developed independently, without the need for, or regard, to standards. This has led to siloed ecosystems that discourage harmonisation of distributed ledger technology. This was one of my concerns in 2015, when I put forward to establish Blockchain ISO Standards to harmonise the efforts to develop distributed ledger technology in collaboration rather than tribal competition, leading to the creation of ISO/TC307. Furthermore, there has been significant recent progress on this front, with input from the ISO and various standards organisations and working groups who are collaborating to progress the technology. Today, there are over 57 countries and international organisations who are actively participating in the development of Blockchain Standards with the first set of standards starting to be published in 2020.
Scalability is another issue which has contributed to slow blockchain implementation. Again, however, the past year or two has seen major advances in this regard, and there is an increasing number of use cases which demonstrate that, today, blockchain solutions can deliver mission-critical scalability required by enterprise and regulated environments.
These issues, and others, have all been legitimate points of concern. But by far the most widely recognised problematic issue is that of interoperability. Or, more accurately, the lack of it. It is this concern which, more than any other, has prevented blockchain from transforming the way the world connects.
And this is understandable. After all, interoperability is the ability of blockchains to share, see and access information — and it’s easy to see why this is not just desirable, but critical, in a world where enterprises depend on ever-greater levels of collaboration and interaction. Without interoperability, organisations are concerned that, in adopting a blockchain solution, they could become isolated; effectively shut off from forming constructive relationships with complementary businesses. Other organisations fear that they could find themselves victim to vendor ‘lock-in’ — being unable to migrate to a different blockchain solution if (as could easily happen, given the nascent nature of blockchain) the technology changes.
This is a non-trivial problem, as it is embedded in the very roots of blockchain development. It is a fundamental lack of communication ability which means that not only are different blockchains (Corda to Ethereum or Hyperledger, etc.) unable to easily communicate with each other, but neither can blockchains of the same type (e.g. Corda to Corda). To illustrate the impact of this limitation, consider, for example, a network of 10 banks, running on a single blockchain. This network will not be able to transact and communicate with a separate network of 1000 banks, even though they are running the same blockchain technology and version. The problem is further compounded by different networks and banks running completely different governance rules, blockchain technology, versions and regulatory controls.
Clearly, a solution which delivers interoperability is an essential precondition for mass adoption of blockchain to be achieved. So important, in fact, is the need for interoperability, that, in its 2019 survey(2), Gartner names (the lack of) it as one of the reasons that blockchain “…remains immature for enterprise deployments”, and Finextra(4) claim that, in 2020, ‘Interoperability will move centre stage.” Very recently (January 2020), the World Economic Forum described blockchain technology as being “balkanised in silos.”(6)
It is precisely this recognition of the importance of, and need for, interoperability that is at the root of our confidence that 2020 will be a breakthrough year for blockchain. Such reasoning may seem counterintuitive, unless you know that, at Quant Network, our core technology is focused on interoperability. So we’re well-placed to predict when a viable, practical, ready-to-go solution might arrive.
When might this be? Well, the answer is that it’s here now. And it’s called Overledger.
So, what is Overledger? First, it’s important to note that it’s not, itself, a blockchain. Rather, it is a protocol that — as its name implies — is an overlay on top of other blockchains. It is, in other words, an operating system (OS). In fact, it is the World’s first and only enterprise-grade blockchain operating system that allows interoperability of any current or future blockchain, legacy networks and enterprise applications and platforms, without adding an overhead of complexity or another blockchain layer. This allows the creation of multi-application chains (MApps) that can leverage the functionalities of different blockchains. For example, developers can pick a particular feature of one blockchain, such as high throughput, and couple it with a feature derived from another blockchain, such as decentralisation. This optimises the agnostics (the ability of one blockchain to interact with another) of the application. Overledger is also designed to be future proof, which it accomplishes by isolating the transaction layers between blockchains. With Overledger, developers can start building game-changing applications with no additional infrastructure, using existing resources, with only three lines of code.
While interoperability has been, and is, widely recognised as a key issue in the mass adoption of blockchain, it is no longer an obstacle. At Quant, we are confident that the removal of this obstacle, ecosystem collaboration and technology evolution signals the beginning of a new age of global connectivity: the Age of Blockchain.
1. Deloitte Touche Tohmatsu Ltd, 2019. Deloitte’s 2019 Global Blockchain Survey. https://www2.deloitte.com/content/dam/Deloitte/se/Documents/risk/DI_2019-global-blockchain-survey.pdf
2. Gartner, Inc., 2019. Top 10 Strategic Technology Trends for 2020. https://www.gartner.com/smarterwithgartner/gartner-top-10-strategic-technology-trends-for-2020/
3. Computerworld, 2019. Top 3 enterprise tech trends to watch in 2020. https://www.computerworld.com/article/3512109/top-3-enterprise-tech-trends-to-watch-in-2020.html
4. Finextra, Dec 2019. What may we expect for blockchain and the crypto markets in 2020? https://www.finextra.com/blogposting/18285/what-may-we-expect-for-blockchain-and-the-crypto-markets-in-2020
5. Bitrates, 2019. These 4 Trends Will Shape The Blockchain Industry In The 2020s. https://www.bitrates.com/news/p/these-4-trends-will-shape-the-blockchain-industry-in-the-2020s
6. World Economic Forum: These are the challenges blockchain faces in 2020. https://www.weforum.org/agenda/2020/01/blockchain-in-2020-epic-changes-and-monumental-challenges/