September 17, 2015

Blockchain ‘hype and drama’ over in a year once big companies get on-board

The ‘hype and drama’ surrounding blockchain will be over in a year once large companies get on-board.

Nick Williamson, CEO of start-up Pythia, speaking at today’s London Fintech Week 2015 says once people and companies become more familiar with blockchain’s capabilities, the ‘hype and drama’ will disappear.

In a ‘Blockchain Collective’, four speakers held a panel discussion on ‘What is Blockhain?’.

Three members represented Credits – a proof-of-stake protocol developed by Isle of Man-based Pythia – Eric Benz, COO; Tomas Mloduchowski, research and technology consultant; and Williamson.

Adi Ben-Ari, founder of Applied Blockchain was also on the panel.

The Q&A session was lively and well attended. Mloduchowski points out that blockchain has been around long before bitcoin, and that blockchain is needed to ‘wake up’ the financial industry.

The question of trust was raised by some members of the audience. Ben-Ari says that on a private blockchain the group is pre-defined – there will be trust as people will know each other. He adds each transaction is recorded ensuring more security.

The non-banking analogy of file sharing service Napster was used by Mloduchowki. He says he’s ‘not sure’ yet if one single blockchain company has Napster’s former power and influence.

He may be right, as there are so many companies competing in this space. All the panel members naturally have a vested interest in blockchain and were keen to play up its merits.

Security and consensus

Williamson says blockchain could shake up the whole power structure of financial industry, and it certainly is getting more attention from banks and the media.

The blockchain panel discusses the future at London’s TechWeek

But the audience again asked about security, leading Mloduchowki to admit ‘yes someone can impersonate me’ but ‘this is similar to other financial services anyway’. He notes that credit cards are still not completely secure, such as problems with fraud.

The subject moved on to ‘consensus’ – agreement between users. Benz says ‘consensus is needed’ and feels mechanisms are needed to ensure proof-of-work – namely stopping denials of service or spam.

Williamson says he built his own consensus algorithm which allows ‘weight of voting’. This means multiple participants have to come to agreement, people will be removed from the network if they’re using it improperly.

Mloduchowski says that these voting requirements could be ‘relaxed’ if humans control the votes.

For the private blockchain, Ben-Ari says consensus is not an issue in comparison to a public one. There just needs to be an even distribution agreement – such as by random, ‘round robin’, and so on.

Near the end of the discussion, Benz joked they had tried not to use the word ‘disruptor’ but someone (left nameless) fell at the last hurdle.

The presenters were good, but there may be work needed to ensure blockchain and bitcoin are explained in simpler terms – and, perhaps, most importantly, people’s security concerns are dealt with.

Isle of Man the new capital for blockchain?


Blockchain’s new home?

The collective were followed by a presentation by Brian Donegan, representing the Isle of Man government, and Williamson, who resides there after moving from the US.

Donegan is keen to showcase the island as the ‘new world capital for blockchain technology’ – not his words he says, but the words of the public.

The island is keen to sell itself as a home of bitcoin and blockchain firms. They can take ‘advantage’ of zero corporation tax and no capital gains tax. The government wants them to come and set up business. Williamson was there as proof of that. In September 2014 it held a ‘Crypto Valley Summit’.

The Isle of Man, located midway between Ireland and the UK, has the British Queen as the head of state, but is free to make up its own laws and sees itself as quite independent.

By Antony Peyton