The Bank: The Commercialization of Blockchain Technology
Deloitte, one of the many multi-bln dollar research firms that have expressed optimism towards Blockchain over the past few years, stated in an annual report released in December that banks and financial institutions must form consortiums in order to pursue the implementation and commercialization of Blockchain technology.
Eric Piscini, a principal with Deloitte, stated in an interview that the company is focused on the development and establishment of consortiums or collaborative projects that could optimize the implementation phase of Blockchain.
There exist numerous conflicts the technology will have to deal with and in order to provide solutions for complex issues, such as regulatory disputes, major firms must come together to produce collaborative projects.
“Industry consortia will be critical to unlocking mass-scale value and keeping Blockchain relevant in 2017. With more than 20 consortia in place already, we are on our way to success.”
Necessity of consortiums
The necessity of consortiums is debatable. This year, the R3 consortium announced its plans to secure a $150 mln funding round to continue its operations throughout 2017. Major banks including JPMorgan and Goldman Sachs announced their leave from the group after the organization failed to provide any commercial implementation of their technology.
Most notably, the R3 Corda, the supposed master project of R3CEV, was heavily criticized by experts including Peter Todd for lack of cryptographic understanding.
Yet, Deloitte’s Piscini still firmly believes that the emergence of consortiums is crucial for the development of the technology and its mainstream adoption.
Piscini also noted that the formation of consortiums enables startups to test their Blockchain technologies and platforms with large-scale corporations, such as financial institutions and banking groups.
Without thorough investigation and evaluation of independent Blockchain-based system’s capabilities, Piscini stated that the value of the technology will become limited.
“Smaller consortia are critical for one simple reason: If you are on your own in Blockchain, the value is extremely limited. They need to include a small subset of key players at first, what we call the ‘minimal viable ecosystem.’ These players need to represent all key functions and be represented by financial institutions, technology companies, regulators and consultancies to make them real.”