Blockchain is a technology that is largely misunderstood by the small portion of the general public that knows it to be anything other than cryptocurrency (the most public—and at least last year, the most publicly disastrous—application that runs on a blockchain basis). Ronny Tome, founder of the Ducatus blockchain, advocates for the blockchain to be used in a variety of other ways, and for the ways it is already being used to be more widely known.
In Part 1 of this article, he explained that blockchain has a significant role to play in reducing the level of trust required in any number of transactions. We asked him how technology was already – relatively quietly – affecting lives and businesses, and how its use could be expanded to our advantage.
Chains of authority.
RT:
Blockchain is already used for many things that people don’t know. I mean, if you use your cell phone, you don’t know the technology behind it. Let’s take banking – banking can be put entirely on the blockchain. And in Dubai in the United Arab Emirates, they are starting to put the entire public sector, including the land registry, on the blockchain.
Many governments and institutions are already starting to use blockchain for data processing, data storage and other things. People don’t know because nobody talks about it. Then again, the whole point of blockchain is that once it’s coded, you don’t have any work with it anymore. So it’s also obviously a challenge because right now, what the blockchain can do in a fully automated way takes the work of multiple people. Once the blockchain is coded, you don’t need these people anymore.
So, as with AI taking over many job roles in, say, copywriting, technology will take over many of those roles, with blockchain being used for computing. But will the ordinary user of a digital bank know that all this data is stored on a blockchain or not? Probably not. And they don’t need to know – we don’t need to understand the technology behind our technology, as it were. We just need to know the use case and how we actually use it in our daily life.
THQ:
Last year was a bad year for the cryptocurrency side of blockchains – since most people know. Did it damage public confidence in the reliability of the technology? And if it did, what would it take to win back its trust?
The human factor.
RT:
It’s strange the way people think about this. If you think about the events that did the most damage, like the Terra Luna and FTX events, the big chaos factors that gave the media the chance to make cryptocurrency sound like it’s only for scammers, the problems were down to greedy people, not the idea. In cryptocurrency, there is a chance to make a lot of money very quickly. And when people come in, they may initially have the right kind of intentions, but when suddenly hundreds of millions of dollars are pouring your way, many people are tempted to try to find ways to keep more than they should. And by doing that, they are going to run the whole project into the ground and will end up in jail.
THQ:
So what needs to be done?
RT:
I think we need operators, we need business people who follow best practices, who are not blinded by the big money involved. Which means that we need people who have experience in the industry, who put in place the right rules and the same principles as we do in other businesses.
We need some standards in place, both to work to prevent repeats of 2022, and to educate people so they know what to look for and spot a scam or a bad project in the early stages and not after it has been in business for two or three years and billions of dollars have disappeared.
It would also be helpful if people stopped overpromising about the get-rich-quick potential of cryptocurrency. But we also need proper information about what blockchain is, what cryptocurrency is, what it can do and what you need to be careful about.
THQ:
So do we need to regulate the industry? Will it help rebuild public trust?
Regulation vs speed.
RT:
Yes, it definitely needs some form of regulation. I mean, I don’t know, and nobody knows right now, what the regulation needs to look like, but the government is trying. Singapore regulates, Australia, Japan, even the US, but they go one way today and another way next week. Nobody really knows what to do. And the fact is that the decision-making processes in our governments are far too slow.
They make regulations based on what they know in cryptocurrency today. By the time they take out the regulations, 6-12 months later, cryptocurrency is developing so quickly that they will be behind the curve. So we have to find different ways to deal with this. But there should be a set of standards and regulations, where people can move if you go outside them. And if you try to defraud, if you try to cheat, then you will be hit by the full force of the law, as in any other business, but you need that bit of freedom to move because governments are not able to keep up this.
THQ:
We’ve said that there are a couple of problems with blockchain, in that people either don’t know it works behind the scenes, or they confuse it with something else – usually cryptocurrency. So what are the main issues that blockchain must overcome to achieve its potential? Will it be more understood? Does it get more public information about what actually happens there? Or is there something beyond that?
The power of the small.
RT:
I think it’s about it becoming more understood – and being more adopted also by small and medium-sized companies.
THQ:
Interesting. Explain?
RT:
The big companies are already starting to use blockchain. But it doesn’t “normalize” it fast enough. To do that, you have to get the restaurant owner or shopkeeper down the street to use it and understand it.
You can use blockchain with an application as a second layer on it, a token or a smart contract or an NFT or whatever, to collect money, create certain types of membership and loyalty programs, to offer special benefits of discounts or points .
All of these things are already on the market anyway, from frequent flyer miles to supermarket loyalty discounts. But whatever you want to do that way, it can be done and managed on the blockchain.
Bonfire of the Accounts.
THQ:
But if they are already doing it without blockchain, what is the secret sauce that blockchain can add that makes them need it?
RT:
Efficiency. Blockchain eradicates the trust factor and it is very efficient. Blockchain is for everyone. Imagine selling product X in your store, and every sale of product X is recorded on the blockchain. Instead of hiring an accountant and an auditing firm to do an audit once a year, you would actually have all data available at any time by clicking a single button.
How? A smart contract can pull all sales data from the blockchain and it will be there.
THQ:
Hold the phone! Did you just make accountants redundant?
RT:
Now you get it! And when we get to that level of adoption, people will see all the different possibilities of blockchain. Right now you talk to people about blockchain, they think you mean cryptocurrency and they recoil in fear and confusion and the conversation goes nowhere.
It is millions of opportunities with blockchain, but we need people to get involved and want to do this.
THQ:
OK, so if the tipping point, the pivot point is the adoption of the technology by small and medium-sized businesses, apart from the joy that is the bonfire of accounting, how do we get them on board?
An expanding ecosystem.
RT:
Good question. What we have done is to build an entire ecosystem of blockchains. We started one in 2017 that was based on Bitcoin, then we created a second one that was based on Ethereum.
So we started building an entire ecosystem around our blockchains, from a digital banking app in Europe, to an e-commerce site, to a centralized training exchange. Now we build the metaverse (another topic that people don’t understand!). Blockchain plays a big role there too, because all the digital assets inside the metaverse are based on blockchains. We are building an NFT marketplace. We actively approach traditional businesses and we partner with them, give them a lot of sweat equity, give them something before they invest their money, so they can learn more about how blockchain can benefit them before they part with their money – especially in this economy.
This is how we will bring blockchain to the small and medium-sized business world. Roll out that kind of ecosystem across the economy, and you may well accelerate the understanding and adoption we need to get much more out of the world using blockchains.
