Speaking at the Hyperledger Global Forum 2020 in Phoenix, Arizona, the World Economic Forum’s head of blockchain and data policy, Sheila Warren, discussed blockchain’s potential to solve real-world problems.
Warren, who started her career as a lawyer on Wall Street before joining the WEF, began her keynote by explaining that in 2018, the conversations people were having at WEF’s annual event in Davos, Switzerland, were focused on the differences between Bitcoin (BTC) and blockchain technology:
“In 2018, no one understood what blockchain was. While the technology had some obvious attributes, government leaders still didn’t understand its potential. And although people were talking about supply chains as the first business use cases aside from money, a lot of the conversations centered around the idea that we have systems we can put a blockchain on and then catapult those into space.”
2020: Collapse of the blockchain hype
Fast-forward to 2020 — Warren noted that in just two years, the blockchain space has evolved in many ways, saying: “The best thing to happen in this space was the collapse of the hype. We finally have regulations around initial coin offerings and don’t have a rush to get money as funding.”
However, Warren cautioned that blockchain technology is not a silver-bullet technology, explaining that strong policy is needed now more than ever to realize its benefits:
“We have to start rethinking the foundational building blocks of the tech stack and the way we allow interactions to happen using blockchain.”
Moreover, Warren shared her excitement for blockchain applications focused on improving the environment. She mentioned that in 2018, the WEF published a paper entitled, “Building Block(chain)s for a Better Planet,” which addresses currently active blockchain experiments. She further noted that the paper’s intention is to bring less attention to blockchain technology and more on policy aimed at increasing the understanding of blockchain's potential.
Warren also noted that experiments around tokenization models are emerging this year, stating:
“How do we now acknowledge the contributions by the workforce and accommodate them with micropayments? All of this is empowered by a blockchain — it’s a critical tool to enable this kind of change.”
To shed light on her points, Warren discussed real-world use cases that apply blockchain technology to create impactful changes in society.
Warren first mentioned a project that the WEF is conducting in Columbia with the Inter-American Development Bank and the Colombian Inspector General’s Office. The venture is meant to explore how distributed ledger technology can improve public transparency and integrity in school meal procurement. Warren explained:
“For this project, we are focused on trust and transparency that the blockchain can provide. We are breaking down what makes a blockchain unique and combining that with government policies.”
While Warren explained that blockchain technology is being used to better understand where school meals and goods are going, she added that transparency isn’t the end goal but rather policy is:
“You can create new incentives and put technology to work once policy is brought in the mix. In fact, we view that blockchain may not be necessary for this use case, but it will provide better levels of transparency, and the educational aspect will provide for its broader accountability.”
Warren also briefly mentioned that blockchain technology can be applied to help provide transparency when it comes to tax payments, the Dow Jones Industrial Average and more efficient health care systems.
Why is blockchain still not there yet?
Although Warren discusses the potential benefits of blockchain technology in combination with policy, she ended her keynote by explaining that the technology isn’t there yet to enable change. First, she pointed out that digital identity is still very much needed:
“Once we have real traction on a digital identity later, then we will see blockchain unlocked. Until then, we are limited in what we can do.”
Secondly, Warren explained that blockchain technology lacks a code of conduct. She mentioned that the WEF is currently working on a blockchain code of conduct, which will be released next week on GitHub for comments. In turn, this will provide a baseline for the demand to build applications on blockchain networks.
Finally, Warren noted that blockchain’s return on investment remains questionable. She explained that she co-authored a paper with Accenture last year on the best business cases for blockchain technology that have good ROIs. She noted that this paper has impacted the business community and governments in terms of a better understanding of how blockchain can solve certain problems.
More public awareness of blockchain technology
Warren finished her keynote by predicting that this year, there we will see a “tremendous explosion in public awareness of what's happening with institutions, and how they will use blockchain.”
She explained that blockchain technology should now be viewed as more of a piece in a technology stack that will enable change for citizens on a daily basis. “I remain deeply optimistic about this technology and I think all of you should as well,” she concluded.