Gert Sylvest, GM of Tradeshift Frontiers and co-founder of Tradeshift, joined the stage at TechCrunch Disrupt 2018 to discuss the future of Distributed Ledger Technology (DLT) with Brian Behlendorf of Hyperledger, Jutta Steiner of Parity Technologies, and Mance Harmon from Hadera Hashgraph. If DLT is confusing, here’s a primer on Distributed Ledger Technology and blockchain. And if you couldn’t make it to the event, but you still want to hear all about this new technology, you’re in luck—here’s a recap.
A new trust
Ultimately, all the hype around DLT and blockchain comes down to, as Andrew Sorkin from the Times said, “solving society’s ultimate challenge: trust. Or rather, lack of trust.” The panelists at TechCrunch Disrupt focused on how trust and visibility for the supply chain and micro, small and medium-sized enterprises are critical for success. And one promising technology for this success comes from distributed ledgers.
The panelists discussed Distributed Ledger Technology and it’s maturation. The first step for a more mature adoption of this technology comes from gaining social trust. As Brian Behlendorf said, it comes down to finding a way to have three spheres come together to engage with Distributed Ledger Technology: standards, common implementations, and regulations. For this to happen, businesses need to see how DLT will affect trade, citizens need to see how it will facilitate trust in what they care about, and governments need to see how it can help with complex regulatory practices. Part of Steiner’s work with Parity Technologies is giving businesses “a way through the maze of competing protocols with a service that can enable the creation and adoption of distributed apps for businesses.” And through that, fostering a purpose for businesses to be at the forefront of technology.
Trust, as it relates to micro, small, and medium-sized enterprises is one of our goals for implementing blockchain with Tradeshift Cash. As Gert Sylvest, GM of Tradeshift Frontiers said, blockchain is “the missing piece in trust in transactions.” Because the typical challenge for these small businesses is proving to financiers that they’re trustworthy, and because the typical way to prove it is through records the small enterprises just don’t have, most smaller enterprises have an impossible task to try to secure funding. But with blockchain, we have the potential to invite all the parties to the transaction, and the ability to agree on transactions. Blockchain allows for a record of agreed-upon transactions from every stakeholder—from the enterprise, to the partners, to the financiers—and ultimately helps build those MSMEs financial identity, and helps others build trust in them.
At Q&A session on DLT at #TCDisrupt. @gsylvest says with distributed ledgers, you can “invite all the parties in the supply chain to the transaction” to replace the gatekeepers with communities. See how Tradeshift Cash uses DLT for small businesses here: https://t.co/7LkloKbHCO pic.twitter.com/wXiZ2AUp0K
— Tradeshift (@tradeshift) September 6, 2018
Private or public trust?
One of the questions discussed was the question of privacy with Distributed Ledger Technology. As in, part of the promise and interest in DLT is in its ability to transfer power from siloed interests to a community of stakeholders. So how does that promise of public ownership over trust and visibility jive with private distributed ledger companies?
live at #TCDisrupt from “The Future of DLT.” @gsylvest explains that investing in distributed ledgers is a result of caring about alignment. “It should be possible to break down silos in the supply chain” with blockchain technology. Check out more here: https://t.co/xTgwaj0ySa pic.twitter.com/5ET0EVy8R1
— Tradeshift (@tradeshift) September 7, 2018
This is where understanding the technology helps answer this apparent disconnect. In fact, Mance Harmon of Hedera Hashgraph explained, whether a company is private or public doesn’t change the functionality of DLT. What’s changing is a computer model. Instead of that one gatekeeper that holds the keys to the power, the model shifts to community ownership. So the model still changes from one to many.
Whether the distributed ledger company is public or private doesn’t change that: what it changes is the size of the network. If the ledger is entirely public, that just means it has more votes on the transactions in the ledger. But in both cases, the trust model is different than the traditional siloed model.
And that’s the fundamental difference between the traditional gatekeeper model and distributed ledgers. In the old model, we have to hope that the few intermediaries won’t be bad actors, and they won’t be incentivized for fraud. In the new distributed ledger model, we’re trusting instead that the majority of people won’t be bad actors looking to defraud. And if they are, in this new system, they’re fireable.
Stay in the loop: Be a part the community
Another theme of the discussion: invest strategically in this technology. Distributed Ledger Technology promises new economic models and trust, but it’s still new. Even the experts are novices. Be careful not to “Build a blockchain in the desert,” as Sylvest said. You don’t want to build on distributed ledgers in a vacuum; without a community to agree on processes and governance in DLT and blockchain, you’re going to have wonderful technology with nobody to use it with. So it’s important to be a part of a community invested in building, whether publicly or privately, these new models. And in fact, being a part of a larger community provides for more trust in the system, as we’re trusting that a large network of people, Behlendorf says, “won’t collude to do bad things.”
And right now the work being done is akin to plumbing: laying the plans and pipes to make the system work smoothly and well. Talking about plumbing is boring, as Behlendorf says, but the groundwork will allow for a new streamlined and connected system of trust and visibility.
Ultimately, while this technology is still new, the promise for positive change is real. The advice from the panelists at Disrupt? Be a part of the community; the technology is developing so fast, the only way to stay in the loop is by being a part of it.
“blockchain technology is developing so fast, the only way to stay in the loop is by being part of it.”—@gsylvest from “The Future of DLT” at #TCDisrupt. Check out more of what we do with Frontiers here: https://t.co/xTgwaj0ySa pic.twitter.com/SkdY7iK0Xl
— Tradeshift (@tradeshift) September 7, 2018
See how we’re investing in so much more than Distributed Ledger Technology with Tradeshift Frontiers.