Frank Roessig (Telindus): the history of blockchain
Frank Roessig, Head of Digital Solutions for Finance at Telindus, provides a comprehensive explanation of blockchain evolution, its applications and the outlook of this developing technology. Interview.
What is blockchain?
Blockchain is a technology that was developed to allow data and values to be transferred in a secured and authenticated manner. It consists of three components: an immutable chain of information that cannot be altered over time, which means the history of a chain is permanently recorded; a consensus mechanism that defines how we get from n to n+1; that is, a set of guidelines which determines the contributions made and agreed upon by all the participants in the chain; and a distributed record or “ledger” on which all of that information is stored and shared.
"Blockchain is only in its infancy. Time will tell just exactly how it will revolutionize the world."
Is blockchain new technology?
No, blockchain has already been with us for over a decade now and is founded on technological components that date back to the 90s. In fact, we are already at the third generation of blockchain. The first generation was Bitcoin. The Bitcoin blockchain was very important because it solved the “double-spending” problem – that is, it made sure that you can spend 1 euro only once not twice. The second generation was Ethereum blockchain and its smart contracts. This introduced the notion of conditionality for the transfer of values. Smart contracts allow for complex transactions, such as the transfer of money or assets, letter of credit, etc., in a transparent way without involving an agent or go-between (lawyer, broker, etc.). Third generation blockchain, like Stellar and Hyperledger for example, enable tailorable trust and scalability. Confidentiality and speed are especially important in business and these blockchains permit one to choose who can approve transactions. They allow for a permissioned blockchain environment with only authorized people. Other new blockchain such as EOS and Steem are working on making the blockchain network more interconnected like the World Wide Web. They believe that this increased communication between different blockchain networks will lead to better function and operation of the whole.
What do we use blockchain for today?
Today blockchain is used predominantly for payments. But increasingly, it’s being used for the transfer of complex assets bilaterally or via exchanges. Blockchain also makes it possible for multiple signatories, like a board of directors, to sign an electronic document simultaneously instead of having to transfer the document to each person and record the signatures in sequence. Other examples encompass the operation of shared plus mutually endorsed KYC, shared Power of Signatures, the traceability of nutrition, art or mechanical pieces and document notarization. All these examples are driven by cost reductions, swifter execution and transparent plus collaborative processes. The successful development of blockchain use-cases is based on the agile partnerships between the actors of a value chain.
They advance together step-by-step in building new solutions that entail benefits for all participants.
What future potential do you see for blockchain technology?
The possibilities of blockchain are limitless across many sectors like financial services, governments, logistics, transport, manufacturing, media, telecoms, etc.
Users will have to ensure that solutions founded on this technology are secure, scalable and valuable. Secure, in terms of data integrity as well as operational resilience. Scalability entails the capacity to process huge quantities of transactions, do so instantly and with large data blocks. Valuable, in the sense that blockchain will significantly improve operational efficiency. But those solutions will also open the opportunity to launch innovative business models, based on micropayments, collaborative work and shared traceability. Here, the only limit is our creativity…