If there is one thing that ake away from the recent R3 non-blockchain announcement, it is how large consortia can be quite a hassle. According to a new report, it will be better to create smaller and more focused blockchain consortia in the future. The bigger question is whether or not all of these initiatives will focus on private blockchains as well, as their use case remains quite uncertain.
Smaller Blockchain Consortia Can Have A Use
Now that it is evident the R3 consortium has developed a project which has nothing to do with blockchain technology whatsoever, the concept of distributed ledgers has come under fire once again. With several groups around the world focusing on blockchain technology, the question becomes how this industry will evolve moving forward. Large consortia may not necessarily be the right way forward after all.
In Deloitte’s new annual report, the group feels banks and financial institutions need to form smaller consortia to commercialize distributed ledgers. Blockchain technology will be critical to help the financial sector evolve Whether or not these consortia have a place in the blockchain world, remain an unknown factor for the time being. Since R3 was incapable of commercializing the technology – despite raising tens of millions of dollars – it is evident these large-scale consortia are not the answer to unlocking the power of blockchains.
A smaller group, consisting of less than a handful of banks, could come together and create new consortia. Smaller groups have a better chance to commercialize distributed ledgers, although it also poses a systemic risk. When multiple projects work on commercializing the same technology, chances are very real it will only be made available to those banks who supported it in the first place. That is, assuming these projects revolve around private blockchains, which is the most likely outcome at this time.
Then again, there are several dozen blockchain consortia spread out all over the world already. Specific projects focus on particular regions, such as Canada, Russia, and China. Nearly every collaboration revolves around the banking industry, although other sectors are warming up to this idea as well. Commodities, healthcare, and insurance are some areas where the blockchain can make quite an impact over the next few years.
In the end, bitcoin has been the only project to successfully harness blockchain technology in an open manner. Private distributed ledgers will have their place in the world, although it is doubtful they can promote financial inclusion. An open blockchain such as bitcoin’s provide immutability, which is direly needed in the world of finance or any other industry dealing with sensitive information. Private blockchains, on the other hand, can still be controlled and its history is not safe from tampering.
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