Businesses are well-equipped digitally and should prepare for the next steps. Blockchain offers interesting potentials, says DI. Entrepreneur Lars Seier Christensen is looking ahead to next generation blockchain.

Direct trade between customer and supplier without the need for any intermediary is sounding increasingly attractive to businesses. Blockchain can offer the technological possibilities that many are looking into – but only few companies have anything concrete in the works.

“We hope that more businesses will look behind the hype and see what blockchain technology can actually be used for in practice. That way businesses can determine whether it’s relevant for them,” says Christian Hannibal, Director of Digital Policy at DI.

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On 16 November, Industriens Hus played host to the Nordic Blockchain Conference, where a series of speakers described possibilities and took stock of the technology in different industries.

Among these was previous co-owner of Saxo Bank, Lars Seier Christensen, who has co-founded the Swiss foundation Concordium Foundation, which is developing a next-generation blockchain network. And he highlighted that although blockchain was born in the financial sector, banks are not among the front-runners when it comes to advancing the potential.

“Banks currently use the technology to streamline processes and other things. But there is no incentive to drive innovation and partnerships with other parties,” he noted. 

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Money and compliance

The financial sector is governed by two factors: complying with rules and regulations and making money. Focus on compliance makes it more difficult to be innovative, because it encourages the sector to keep development within its own walls for fear of trouble with authorities.

“Banks prefer to set up their own departments. They spend billions of dollars on their own IT systems and compliance departments and don’t reap the benefits of knowledge sharing and synergies,” said Lars Seier Christensen.

He emphasised, however, that authorities’ transparency requirements should not be viewed as an enemy. And there is time enough to get started with blockchain development.

“We’re still at a very early stage. There is no need to panic, and it’s necessary to think about the future in a structured manner and demonstrate that you can meet the demands of a modern society,” said Lars Seier Christensen.

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Only 2% have got started

Among the members of the Confederation of Danish Industry, blockchain remains a new and untried technology. Only 2% of DI’s members use blockchain and 3% are planning to. According to DI, 60% of members are not yet aware of the potential. Christian Hannibal looks forward to seeing more concrete examples and pilot projects that businesses can use as inspiration.

“Many of our members are ahead of the game digitally. They follow the newest developments and are in a strong position in terms of international trade. But we cannot just rest on our laurels, we need to learn more about what blockchain can be used for and what the future looks like,” he says.

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Blockchain is spreading

Internationally, blockchain development is happening rapidly, spearheaded by the US and China. The cryptocurrency Bitcoin was the first example of blockchain because it allowed users to securely buy and sell currency without banks, central banks or other intermediaries. The technology has since spread to many fields, from humanitarian aid and shipping to the sale of excess heat and electricity between private persons and businesses.

Blockchain can quite literally be understood as a chain of blocks. Each block has a digital fingerprint that is considered impossible to hack and therefore secure. Parties who wish to trade via blockchain can exchange the fingerprint and thereby trade securely, in principal making intermediaries and third parties unnecessary.