Interview by Matthew Dove
For many businesses, blockchain tech’s like a fish with a bicycle. No-one’s quite sure why they’ve got it or what they intend to do with it. Here, we try to unpick this conundrum with the help of Matthew C. Le Merle, the co-author of “Blockchain Competitive Advantage.”
In Chapter 2, you mention the need to establish “unalterable identities” on the blockchain. To what extent would this lead to a “garbage in, garbage out” problem for digital verification given the archaic nature of state-issued identities –
We need a new approach to giving people identities that takes into account the new technologies that we have to work with. If we combine blockchain, distributed ledgers, enhanced cybersecurity approaches, DNA identification and ongoing attestations I believe we can greatly tidy up the mess we currently are living with. Governments manufacture our identities and are responsible for ensuring their citizens have the benefits of clear and immutable identities. Governments need to move quickly on this issue to solve the current negative externalities that all their citizens are suffering (ie Identity theft and fraud).
If we combine blockchain, distributed ledgers, enhanced cybersecurity approaches, DNA identification and ongoing attestations I believe we can greatly tidy up the mess we currently are living with.
Can tokenisation using blockchain tech really bring about “true transparency with instant execution” as Jamie Finn claims in the book? If so, when?
We can already do instant compliance and reporting by tokenising assets and having them available for pinging at any time. Instant execution is possible when every player in the transaction is technology enabled and the trades are occurring in a fully automated way – although it will be a long time before all players are enabled this way across all asset classes. However, instant execution assumes we want to move to T0. There is an argument that we would do better to stop at T2 settlement since that still allows some time for fraud and error detection to take place.
Do you consider the diffuse development and application of blockchain tech (both geographical and technical) to be positive? Or is blockchain “trying to be all things to all men”?
Without question people are trying to deploy a new technology and innovation (blockchain and distributed ledgers) to every conceivable potential use case and unresolved user need, met and unmet. That makes no sense. But until we know where we can truly advance the state of the art, there is no harm for entrepreneurs and early investors to pursue the perimeter of innovation other than to themselves – they will just fail a lot.
What’s the one piece of advice that you would give to a company considering the use of blockchain technology?
If a start up, make sure you have a clear way to play, understand and can secure the key success factors that turn this into a right to win, secure the best investors as your backers and then execute with precision and at speed. For established companies, make sure you are keeping the best of company and that both your own teams and the external teams you are working with are the best you can find. The world is full of ways to burn up time and resources, and the best innovators tend to band together to avoid as much of that friction and wasted effort as possible.
Similarly, what advice would you give to an investor attempting to navigate the murky waters of blockchain innovation and find a project worth backing?
Make sure you know the best practices of investing in early stage startups and don’t deviate from those best practices this time around – gain access to the inner circle opportunities, coinvest with the best investors and diversify broadly since this is still an area of leading edge technology with high failure rates – it is a hit driven business.
The world is full of ways to burn up time and resources, and the best innovators tend to band together to avoid as much of that friction and wasted effort as possible.
In Chapter 15, you talk about how you expect most large companies to adopt private blockchain solutions. How compatible do you think these “walled gardens” are with Satoshi Nakamoto’s original vision for a completely decentralised system?
Here I think we will see a migration towards open and decentralised just as we did with the internet. Large companies begin by limiting their perceived risk by starting in controlled private environments (think intranets) and then only when the greater network effects and innovation of the open decentralised solutions become proven do they migrate from private to public (they are all in, or going to the cloud and the internet for even mission critical solutions). This is how I think things will play out for blockchain too. In addition, I fully expect most major fiat currencies to have digital crypto versions before too long (cryptodollar, cryptoRMB, cryptoeuro etc.) which will appear to be compelling to large established players for conducting their digital world transactions.
Blockchain Competitive Advantage is available for purchase here.
