Enterprise blockchain hit the scene in April advertising the gateway to improved security, effective distribution of information among involved parties, anonymized data pools for research companies and even new ways to fight counterfeit drugs. It seemed like every sector had a headline about a new initiative or alliance that would be constructed to progress the space:
J.P. Morgan announced on April 20th that they were testing a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large firms. The issuance was a $150M one-year floating-rate Yankee certificate of deposit and the blockchain test involved the parties mirroring the execution of the actual transaction through a debt issuance application that would run on Quorum. Quorum is an open-sourced variant of the Ethereum blockchain specifically designed to meet the needs of financial markets participants.
On April 26th, IBM announced their enterprise project dubbed TrustChain, a blockchain that proves the provenance of jewelry by following the supply chain from mine to store.said Jason Kelley, the GM of blockchain services at IBM:
“It’s the first end-to-end industry capability on blockchain that has its core in trust.”
During Digital Day 2018, the EU signed the creation of the European Blockchain Partnership (EBP), a vehicle for cooperation in preparing the launch of EU Blockchain applications across the Digital Single Market. Commissioner for Digital Economy and Society Mariya Gabriel spoke of the potential for Blockchain technology to be integrated into existing industry:
“In the future, all public services will use blockchain technology. Blockchain is a great opportunity for Europe and Member States to rethink their information systems, to promote user trust and the protection of personal data, to help create new business opportunities and to establish new areas of leadership, benefiting citizens, public services and companies.”
Organizations including insurers UnitedHealthcare, Humana, Optum, Quest Diagnostics and MultiPlan announced the creation of the Synaptic Healthcare Alliance (SHA), a blockchain pilot program to help payers tackle mandated provider directories. Said Mike Jacobs, senior engineer at Optum:
“Blockchain is the trigger that brought us together, but the collaboration to solve widespread healthcare problems is our real goal. we envision the possibility of effecting change at scale — helping to make the health system work better for everyone.”
The program would apply blockchain technology to improve the quality of data and reduce the administrative costs associated with insurers getting up-to-date healthcare provider demographic data.
Sounds like Enterprise Blockchain is going to make everyone’s lives easier, more secure, and less expensive — claps for everyone!
It’s understandable that developments take time. No one expected that within the year diamonds would be tracked around the world, the EU would have a comprehensive blockchain strategy, and US healthcare data management would be fixed. But with everyone’s grandiose announcements of the revolution they would be implementing, one could expect to at least see some evidence of progress. The reality has been crickets.
The only recent news from Quorum came in October when they announced that they are looking to efficiently tokenize gold, so it can move on distributed ledgers. Unfortunately any productive news from the team has lived in the shadows of headlines regarding class action lawsuits against JPM for charging excessive fees in cryptocurrency purchases or Jamie Dimon’s commentsregarding Bitcoin.
The EU pushed further publicity by holding the Blockchain Roundtablebringing industries together for Europe to lead in blockchain technologies. For background, the Commission first recognized blockchain-inspired technologies as having huge potential for their administrations in May 2017 in the Digital Single Market mid-term review. Since then progress has moved at a dawdling pace.
The SHA had the addition in October of Ascension, the largest not-for-profit health system in the US, and CVS Health-Aetna, which has an estimated 22 million members. The lack of greater accomplishments is likely due to the fact that the development in offering competent healthcare services has been extremely dependent on its advancements in the information technology, and the ability to store and record information economically and easily as well as share it securely amongst disparate applications & systems. In other words, no one wants to fully commit to development, and would rather wait until the technology is more economically viable. This is a major problem.
What it means today:
So if it makes so much sense to implement enterprise blockchain technology then why hasn’t it been done? Well, because companies don’t want to spend their money.
Matthew Roszak, the founder of Bloq, spoke at Distributed this year about how the Crypto 50 have committed more money to enterprise development than the Furtune 50. The Futune 50’s have a staircase of development that they follow where they reduce cost, then try to grow, then try to innovate.
What we have ultimately seen so far is corporations dipping their toes in the water in an attempt to understand the space, then leveraging that little teaser into a gripping headline about their application of enterprise blockchain technology.
Though Matt finished with the detail that regulation is not yet ready for enterprise ecosystem, governing bodies like the EBP are committing money, it’s just the people’s money. So far $83M have been allocated by the EU to blockchain related projects, and potentially up to $340M could be committed from 2019 to 2021. Bloq and other blockchain technology companies are doing their part to work with regulators to educate them on the technology (less than 2% of elected representatives have technical backgrounds) so the US doesn’t fall behind the wave of advancement.
No one wants to be the first to dive in and lose their shorts but everyone wants to reap the rewards that enterprise blockchain provides. As the wave of global improvement continues, albeit slowly, there will have to be a paradigm shift, not unlike a recall coordinators formula, that will back the corporations into a corner in which they adapt or die.