On Day 1 of DLA Piper's Global Technology Summit, Mark Radcliffe, a partner in DLA Piper's Silicon Valley office, moderated a panel on blockchain's application to solving real-world problems in financial services, logistics, real estate, and healthcare among other industries.
- Natalia Karayaneva, CEO and founder, Propy, Inc.
- Martin Minnoni, co-founder and CTO, Wibson
- Tom Trowbridge, president, Hedera
Mark's thoughts on the opportunities for the "new internet" can be found here.
Radcliffe: What three industries are most likely to be disrupted by blockchain?
Trowbridge: If you look at any type of financial transactions right now, we can talk about blockchain. For example, if you're an enterprise and you want to send money to Brazil, you first have to deliver credit, you have to open up a correspondent bank relationship from your bank, your bank to a correspondent bank in a different correspondent bank to the end merchant. That can take days and have lots of fees but that doesn't need to exist with the currency or cryptocurrency.
Minnoni: It will be about building transformation applications. For example, a substitution of business models will be helpful in providing identities in politics and technology. It can also be helpful in providing identities to avoid a certain circumstance like corruption in multiple procedures. Another industry is healthcare; now that healthcare information sits in different silos, it is difficult for healthcare information to be processed. Healthcare with HIPPA in particular will benefit from blockchain.
Karayaneva: I'm biased to say real estate. Real estate will be and is currently being changed by blockchain. The reason the real estate industry can adopt so fast is because of the immense profits, and the current state of blockchain real estate market is so expensive that it makes sense to spend $10 to make it safe. Also, regarding Tom's point about payments, we already did several transactions which were cross-border. The buyer and the seller were paying either in Bitcoin or ether but not until certain conditions were mended, which means we're also disrupting the escrow market.
I think blockchain will be able to disrupt the $10 million industry of title insurance. Ninety percent of all the collective money of title companies is spent for the labor and for profits of those companies. Allowing blockchain to aggregate all the data of registries will allow us to have very cheap title insurance.
Radcliffe: Blockchain will definitely affect those industries, as well as retail and manufacturing. Another industry to consider is the aircraft industry. There is actually a big problem with counterfeit parts and that is made more difficult because now parts are 3D-printed. How do they keep track of it? Blockchain offers a potential solution and can solve problems globally.
So, Martin, what are some of the issues businesses face when moving from an original business model to a blockchain business model?
Minnoni: There are many challenges – there is a technology gap and a privacy issue. Additionally, there is no standard chain. The cost of transfer in and outside of the network are varied. We need a standard to connect blockchains together to make a stronger system. We face challenges in governance and regulations as well.
Another one is changing people's perception. We're changing people's behavior in terms of software and we are trying to do something new and transformative. We have not reached a milestone with the early adopters just yet.
Radcliffe: What are the challenges you face in the real estate market?
Karayaneva: People come to us and share they want to learn; we've done several transactions in California, Arizona and Vermont. They are inspired by blockchain because it has the ability to bring some decentralization to the industry.
Audience question: Money is backed by the government. Gold is backed from physics. The blockchain is backed by algorithms. What will it take for people to trust algorithms?
Karayaneva: I guess so far; the trust needs to take place because cryptocurrencies are backed by blockchain. The adoption is coming. It is currently at .07 percent. When it reaches about 1.5 percent, there will be mass adoption. We are seeing mass interest in the real estate sector. We are struggling to keep the data un-hackable, but real life happens.