The World Economic Forum (WEF) has argued that blockchain
can make a breakthrough in 2020 and achieve social impact – but only once the ‘resignation’
around governance turns into recognition.
The economic body noted a change over the past 12 months as
the move from ‘hype’ to ‘quality’ began. Yet the launch of Facebook Libra in
2019 – which contained more than a few missteps – as well as interventions from
other central banks give grounds for only the most cautious optimism.
Sheila Warren, WEF head of blockchain and distributed ledger
technology, said acknowledgement from the largest names in finance, including
Libra, were ‘truly exciting innovations that just need a bit more
experimentation to stick.’
Governance remained a sticking point, and one which will
continue to be untangled in 2020. “2019 saw laypeople diving deep into the
specifics of operations, business models, and legal structures in an effort to
assess risk,” wrote Warren. “As Facebook learned, the promise or potential for
good governance is not enough.”
One area which Libra foresaw was around bringing wider
communities together. While not everyone who immediately signed up has stuck
around – payment providers Mastercard, Stripe and Visa all
jumped ship in October as the official membership deadline loomed – the WEF
noted the importance of collaboration, particularly in the public sector. The
forum’s Central Banks Digital Currency project has brought together more than
45 central banks, for instance.
“Last year, we saw either totally internal initiatives or
creative attempts at consortium building,” wrote Warren, using Lubra, alongside
Food Trust and Tradelens as examples. “Companies are waking up to the idea that
to go far, they ought to go together.”
The public sector was an area where Warren expected to see the
most impact in 2020, with regards to smart contracts, as well as finance.
Yet there is a caveat. The wider application of blockchain technologies
is something of a catch-22 in that its best applications are invariably the
most complex. This was noted in a WEF report published
in July, which put together a ‘value framework’ with key focus areas around
improving profitability and quality, increasing transparency, and reinventing
products and processes. As enterprises have especially complex mechanisms, Warren
proposes a compromise.
“This year, we expect to see increased experimentation with
hybrid blockchain models,” added Warren. “These are a great way to increase
comfort with the technology.
“We are not close to realising the promise of truly
decentralised systems, but the space continues to evolve in exciting new ways,
and it’s just a matter of time before something huge gains traction.”
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