NY Consensus Day 2: The Practical Uses of Blockchain Technologies

Practical uses of Blockchain Technologies

Over 30 events are going on at the same time at Blockchain week. So significant is this event that the attendance doubled last year’s numbers and the international coverage was so extensive that it even included non-specialized media. These figures show the importance that society is currently giving to blockchain-based technologies.

The first day was hectic and exciting and the second day of the NY Consensus did not disappoint either. Even though many important topics were covered – so many that it was impossible to review them all – most of the conferences focused on one common point: the practical application that is being given to distributed ledger technologies.

2018 is proving that blockchain is much more than a promising technology, with many ongoing applications already generating positive results. Of course, this doesn’t even take into account the prospect of various new business ventures that will inevitably take off once the technology reaches a higher level of maturity.

The most exciting conferences, which focused on this topic, took place throughout the morning. The following is a summary of the most critical points that were discussed during the day.

Blockchain-Enabled Intellectual Property Management:

During this conversation, many questions were addressed regarding the legal framework that regulates intellectual property, and how the development of blockchain technologies can currently help governments and specialized companies to improve information management processes.

The conference was given by Linda Pawczuk (Deloitte), Michael Kruljac (Georgia-Pacific LLC), Tim Davies and Stephen MacKenzie (Koch Industries)

According to the panelists, companies are looking for ways to legitimately use blockchain technologies. Market analysis shows that at least 5.4 Trillion Dollars are traded in intellectual property values, meaning approximately 30% of revenue for the purchase of an asset subject to one of these regulations.

What is the Problem we are Trying to Solve Using Blockchain with IP?

Koch Industries offers a quick contextualization of the problem:

“If you think about tangible assets like a house or a car, imagine a system where you didn’t know who previously owned your house or who previously owned your car. Would you be able to resell the house? Would you be able to get a loan? Would your car be repossessed?. That’s exactly the problem we face today with intellectual property. We don’t truly know who owns it or who uses it and the current system is just not set up for it, it’s just not fit for that particular purpose especially in today’s economy”.

According to the panelists, the current system is so archaic that it is virtually impossible to entirely rely on the results it generates when dealing with intellectual property:

“That’s exactly what happens today, The system does not allow you to do a chain of title search, does not allow you to verify ownership… Because that system is very inefficient, it’s paper-based, it’s decades old, you cannot effectively use innovation in today’s economy”

To facilitate the understanding of the case, it is important to identify in a fundamental way the actors involved in the processes related to patent management, at least in the United States:

  • Inventor
  • Employer
  • Patent office
  • Commercial office

They used the following as an example: An inventor (Mike) creates a drink, and under the contract, the bar owner (Moe)  acquires rights over that recipe. He may choose to license it or use his exclusive right to attract customers. That’s where the IP ownership chain begins.

Each licensee would perform a “reverse chain of title search” to ensure that there were no problems or contradictions: In that sense, they would make the corresponding inquiries, did Moe get the rights from mike? Did Mike actually have an obligation to assign the rights? and an even more savvy licensee will go further again, searching to see if Mike misappropriated the recipe from previous employers.

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These searches are extraordinarily complex and ineffective in the traditional system but can be done quickly and practically free of charge, should distributed ledger technologies (DLTs) be used in said cases.

Real Benefits and Prospects

According to Koch industries, Blockchain can fix the problem not as an “incremental improvement” but as a “wholesale fix.”

Everything would be seamless and non-friction:

“All the licensees would get instant verification of ownership going all the way back to Mike. He could set up a smart contract to self-execute and collect royalties based on it … banks… when they go ahead and put a security interest… so once Moe pays off a loan that contract is instantly put onto the blockchain as it is paid off.”

Deloitte goes much further, explaining the interest from a more pragmatic and lucrative perspective without losing sight of the business vision associated with this type of service:

“An organization like ours would see a reduction in costs associated with transferring, signing and licensing intellectual property … the due diligence cost should be substantially reduced, and it’s also important regard greater visibility and verifiability from the platform, the sort of embedded insurance, requirements in contracts that are designed to compensate for potential shortcomings in titles, the need for those would be reduced, and that will reduce cost in terms of legal times and other issues”

Rewiring Trust: Enabling Enterprise Networks and a Token-Driven Economy

Bridget van Kralingen of IBM mentioned her organization’s support for the development of microfinance through the promotion of exchanges and remittances between countries, especially those in extreme poverty.

She also mentioned that IBM had established critical strategic alliances with two companies that can make an immediate and tangible contribution to the world of cryptos and blockchain in general.

Todd Lemons of Veridium talked about how the use of tokenized assets allows for a direct and positive impact on environmental sustainability initiatives.

Simon Moss of Global Citizen was also invited to talk. The announcement of a partnership with IBM and this NGO had already been made, however, on the second day of the event, a little more was said about the role of blockchain as a tool to stimulate micro-donations and microfinance. According to Mr. Moss, one of the reasons why the number of donations has been declining over the last few years is due to a lack of confidence. If people cannot see the destination of their funds, trust in the recipient decreases, especially if it is cross-border payments.

The blockchain solves this problem because users can track the destination of their donations in real time, thus increasing the transparency of the market.

2018: The Year of Pragmatism

Linda Pawczuk and Rob Massey from Deloitte were in charge of this segment, presenting the results of a study called “Deloitte’s 2018 Global Blockchain Survey Preview”.

They conducted an international survey, which shows the level of compliance or skepticism large investors have regarding disruptive technologies.

The survey polled a sample of 1053 senior executives in 7 countries: Canada, France, Mexico, USA, China, Germany, and England. These were executives working for organizations with $500m in annual revenue and with a relatively broad knowledge of blockchain and cryptocurrencies

They presented a slide with some interesting results:

  • Blockchain-savvy global executives hold more pragmatic views and look to move solutions into production within the next year
  • Blockchain fatigue by some – but positivity by others, has been viewed as a leading indicator
  • The upcoming year will be one of significant commercial blockchain activity.

According to the results, Blockchain is one of the most important Topics of interest for major companies around the world:

Practical uses of Blockchain Technologies

Also, it is expected to see big investments in the development of DLTs in the short term:

Practical uses of Blockchain Technologies

Government and regulations seem to be the biggest obstacle for a global Blockchain adoption according to the impressions of the people participating in the study:

Practical uses of Blockchain Technologies

The majority of the investments are going to the development of “permissioned” blockchains. After that, there is no preference between public and private networks, both have 44% of interest:

Practical uses of Blockchain Technologies

Finally, they concluded with a few words which summarize the general feeling of all those happy to belong to this community of technology enthusiasts who could change the world:

“This is history we’re making, and we’re living this together.”

The full survey will be available in June.

Other Notable Examples of Adoption and Current Uses were:

  • The creation of a blockchain-based initiative to facilitate payments to rural populations in the Philippines

  • Kaleido Announcement: A platform that reduces the effort of large companies to adapt to processes that can be solved with the traditional “clicking” of many basic computation programs.

  • The presentation of ConsenSys as a platform that allows applying different cases of use of blockchain technologies to everyday life, with a level of adoption and simplicity never before seen.

A Stable Market

Some people expected to see a price boom immediately after the start of the conference, however, after the most recent fall – attributed by some to the sales made by the Mt Gox trustee, Bitcoin has remained stable after the bearish event with a strong resistance of over $9,000 dollars.

Featured Image: Depositphotos/© Tzido

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