"Only several blockchain projects out of hundreds are making progress," – Den Reymer, DTG
There are very few successful cases of blockchain introduction into business – most often statements remain statements only. Such an opinion was given by the speaker of Blockchain Conference Moscow, the Vice-president at LANIT, a group of companies on digital transformation and the CEO at DTG, Den Reymer.
We discussed what prevents blockchain development in Russia and why the introduction of decentralized technologies is not going as easily as it might seem.
Interviewer: Blockchain Conference Moscow (BCM)
Respondent: Den Reymer (D.R.)
BCM: Why do statements about the blockchain integration into business often remain statements?
D.R.: I see two stumbling blocks. The first is that the blockchain technology is quite young. It has a number of limitations, and it requires long-term business testing. Only then we can ensure guaranteed reliability when integrating the technology into real business processes and then scaling.
The second stumbling block is that companies are still testing in which business processes should blockchain be used in general. The path is full of mistakes and experiments, which often ends with useful conclusions: thanks to them, the setting of tasks in the project changes so that blockchain brings real benefits.
According to analysts of the research company Gartner, currently, only few blockchain projects out of 400 go into the industrial regime.
BCM: How can you evaluate the blockchain projects market development in Russia if compared with more advanced countries in this area?
D.R.: It is difficult to single out absolute leaders on the international market. Russia here is clearly not among the laggards and takes, rather, a leading position. However, projects all over the world have one common feature: they still have a pilot nature. There are many statements about the blockchain introduction, but in most cases, they are cases in which the technology either doesn’t bring significant benefits, or the project is not used. Companies are waiting until the business is ready for changes, and integration into real business processes doesn’t happen.
BCM: Which Russian blockchain projects in your opinion deserve special attention? Why?
D.R.: It’s important to determine what we mean by the blockchain project. There are many companies that have conducted ICO and are in the process of fulfilling the promises to investors. And there are projects (we are following them closely), which are related to the use of blockchain for B2B ecosystems, distributed processes among several companies.
Last year, Sberbank, National Settlement Depository, Raiffeisenbank achieved positive results in the field of corporate blockchain. Certain success was also achieved by the FinTech Association with the first version of the Masterchain platform. But even these projects are still in the pilot mode, and more impressive results from them should be expected on the basis of the development results in 2018.
BCM: What difficulties prevent the blockchain projects development in Russia?
D.R.: As in the whole world, one of the main problems is the lack of qualified specialists. But this is a traditional problem in the development of any breakthrough technologies: it will be solved after some time.
The lack of proven business cases, in which the application of decentralized technologies would have a real effect, also hamper the development of blockchain. But even if such a case appeared, often amendments to the legislation are required for its successful introduction in the industrial sector: today not all relationships of participants can be made in electronic form. Therefore, the state must support paperless technologies. In addition, there is still no experience and generalization of the court practice on corporate disputes in the field of smart contracts.
BCM: How do you think, what are the main advantages of blockchain in business?
D.R.: Blockchain allows companies to free up the resources: both human and monetary. This is achieved by respecting the principles of decentralization and trust in the ecosystem, as well as by reducing the time consuming stages of verification and confirmation.
BCM: Where to begin in business blockchainization?
D.R.: It’s worth starting with an audit of business processes. It will allow you to see gaps, delays, expectations, or vice versa, unnecessary checks and operational stages. If their reason is in mistrust to external data or partners, then, most likely, they can be eliminated with the blockchain introduction. Blockchain will take a niche in distrust cases.
BCM: Media mentions that DTG is working on a blockchain platform for tracking the supply chain of goods. Tell us please, what are the main challenges when creating such a platform?
D.R.: At the initial stage, it was necessary to select the technology that would meet the tasks and challenges of the market. Then it was necessary to look at business model and the relationship of partners in the supply chain from a different perspective. It was necessary to take into account the process of a new technology implementation; to see the benefits of the project for each ecosystem participant. An important task was to organize the development process directly on blockchain, taking into account that this stage became only a small part of the overall architecture.
BCM: Tell us please which issues will be covered in your report at Blockchain Conference Moscow?
D.R.: I will tell about one of the priority areas for DTG, where the potential of the blockchain application is obvious – the management of logistics operations. I will explain how the technology will effectively track the logistics of goods from the producer to the consumer, fight counterfeit, and guarantee the quality of the product. In addition, I will tell how DTG tests DLT and blockchain platforms that exist on the market today. I will analyze their specifics and application possibilities for logistics area. In addition, I will share the accumulated experience in creating a logistics platform on blockchain.
On April 17, Den Reymer will speak at Blockchain Conference Moscow, covering the topic of ‘Blockchain for Businesses. 7 steps of supply chain transformation’.
Register and find out how to introduce blockchain in the logistics management field.