Focus on Blockchain speaker Dan Dumitrescu – Traditional companies’ business model is at odds with blockckain’s transparency. The alternative? Permissioned blockchain made by tech giants’

Georgeta Gheorghe 22/07/2018 | 06:30

A decentralisation-based business model is a seductive proposition nowadays. However, Dan Dumitrescu argues, it is not a feasible option for traditional businesses, which have deeply embedded in their DNA the need to keep their trade secret, well, secret.

“The major asset of blockchain are transparency and immutability the fact that every move can be traced, making fraud impossible,” says Dumitrescu. It comes as no surprise, therefore, that, in 2015 The Economist dubbed the technology the ‘trust machine’. But this feature is not enough in itself to determine companies to shift their business model towards a decentralised one. “As for building a decentralisation-driven business model, that is as things stand, highly unlikely”, Dumitrescu argues.

“Moreover, using an open-source, permissionless, decentralised business model is at also at odds with the idea of maximisation of profit. That is why, for them using blockchain makes sense when transparency brings a competitive advantage. One very good way to use it is when a company wants to be transparent about the traceability of raw materials and resources or even workforce,” he explains. By doing this, the company capitalises on transparency, which can bring it a competitive advantage, Dumirescu adds.

According to Dumitrescu, such a model is best suited to organisations that are not for profit and have ‘altruism’ in their DNA. “They may be NGOs or other organisations. All these attributes fit very well the model of an NGO, which receives resources it mobilised for a higher purpose. Then, it is a clear advantage and a duty for them to be transparent and to be keen to prove the degree of transparency. And using blockchain is one way to do it,” he says.

Most likely, big businesses will reap the benefits of the technology using their own permissioned blockchains developed in cooperation with tech giants such as IBM or Microsoft, Dumitrescu argues. “The big players are already capitalising on the markets’s appetite and enthusiasm for blockchain by developing their own blockchain solutions. IMB is already at the forefront, Dumitrescu argues,  having already developed a blockchain-based product commissioned by Walmart for food traceability,” he notes. According to IBM, the product benefits growers, distributors and retailers by enhancing visibility and accountability across the food supply.

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