Without the distraction of crypto and ICOs, proponents of blockchain technology are building the future, says David Dalton.
For David Dalton, a consulting industry veteran who leads Deloitte’s international blockchain foray from the company’s Dublin lab, the whole debate around blockchain technology has entered a new phase.
“We are in a much more realistic phase around the technology and hopefully a lot of the hype has died away and there is a bit more mature thinking around how this technology applies.”
‘What the Central Bank is doing in Ireland is very important because we have a really good cluster of fintechs here. The recognition of that opportunity by the Central Bank is a really good step’
– DAVID DALTON
I sought Dalton’s point of view to get a kind of a state of the nation on where blockchain is at and how that feeds into the evolution of the technology as well as the fintech narrative of Ireland.
“Reality is setting in on the whole blockchain space. Once the dust settles, you can finally see what’s happening. The problem that blockchain has had is that it was constantly getting overshadowed by the whole cryptocurrency world.”
ICOs (initial coin offerings) have juddered to a halt; the value of bitcoin and other cryptocurrencies has plummeted, leaving only a few early purchasers still minted; and the concept of the blockchain ledger as a way to actually build tangible, transparent and useful systems is back in the hands of the believers.
“It [cryptocurrency] certainly quietened down until Facebook revealed it was creating its own currency,” Dalton said, referring to the news that the social network is planning its own cryptocurrency as part of Project Libra and that CEO Mark Zuckerberg was said to have secretly met with the governor of the Bank of England, Mark Carney, to extol his vision for GlobalCoin in 2020.
“If the large tech giants do something like that, it could be a significant turning point for the whole crypto area.”
Don’t believe the hype
Still, you can’t help but get the sense that Dalton is glad to see the back of the crypto hype for now, and actually see blockchain put to productive use.
“A lot of the hype has died down because there is a lot more realism around blockchain. What we are seeing is a lot of organisations either in collaboration or, depending on a use case for their own purposes, working on blockchain but not making as much noise about it as you might think, and therefore the space seems much more quieter.”
Dalton said that Deloitte is seeing significant blockchain activity in a range of industries, particularly where supply chain is involved.
“We are supporting multiple supply chain projects at the moment and we also see things happening more in the public sector space as well,” he explained.
The work of the Deloitte blockchain lab in Dublin, he explained, is very much centred on working with large clients and consortia to create blockchain solutions.
“We’ve got a core team here of 30 people in Dublin, so a significant part is working on large tech development projects, with most of those occurring outside the country. We have clients in continental Europe, the Middle East, in the US, supporting what we are doing.
“A second aspect of what we are doing is about focusing on investing in assets in this space. We define an asset as something that may form part of a solution. We have four assets at the moment we are building out; they are not full products yet but are the kind of thing that will help facilitate a development or part of a solution.
“An example of one of those is an asset we call ‘track and trace’ and allows you to follow parts, goods or materials through a supply chain. One of the areas we are working on is food provenance and being able to establish the quality of sourcing of a food product right back to its very beginnings. That’s an area we are focusing on quite a lot and investing in significantly.”
Blockchain all over the world
In terms of what is happening around blockchain in Ireland, Dalton said that action is more corporate than start-up. “As well as Deloitte, Citi and Mastercard have corporate innovation labs here and core blockchain teams embedded here. I think it is a much tougher environment trying to do start-ups in the blockchain space.”
Dalton pointed to significant activity by the Irish Government in facilitating the evolution of blockchain, pointing to work by the Department of Agriculture and Bord Bia to use blockchain as a way to trace the provenance of food. “And if blockchain can help to do that, they are absolutely open to doing that. That’s a maturity in its own right. Instead of obsessing about the technology, we are more focused on the solution and what is the right component of technology to help solve it.”
He also pointed to work by the Department of Finance and greater engagement by the Central Bank to evaluate the role blockchain could play in the future of finance in Ireland. “The Central Bank is working with financial services organisations who want to do something different and innovative, and is providing advice from a regulatory perspective.”
Globally, the leading authorities embracing the potential of blockchain from a fintech perspective include the UK’s Financial Conduct Authority, which has provided a sandbox service to test services, as well as financial regulators in Hong Kong and Singapore.
“What the Central Bank is doing in Ireland is very important because we have a really good cluster of fintechs here. The recognition of that opportunity by the Central Bank is a really good step,” Dalton said.