The state of blockchain in the UK, with Digital Catapult’s Robert Learney

Robert Learney is Lead Technologist in Blockchain and DLT at Digital Catapult, the British government innovation agency for the digital and software industry

Digital Catapult is one of the most important organisations in the UK when it comes to emerging technologies. Cut loose from marketing, influencer and sales hype, the government agency equips UK businesses with tools and knowledge to become early adopters of transformational technologies. And with their help, forward-thinking UK businesses can receive grants to fund the next generation of game-changing tech projects.

A technology that both inspires and confuses businesses in equal measure is blockchain — which is technically not one technology but a suite of technologies comprising distributed databases, cryptography and automated contracts. 

Despite sometimes outrageous hype over the last few years, the blockchain revolution hasn’t quite arrived. That doesn’t mean blockchain is without substance. Excitement might not quite be at the level it was two or three years ago, but revealingly, Digital Catapult’s blockchain efforts have only accelerated. This fact suggests it would be naive to rule blockchain out just yet.

The right fit

Robert Learney, a blockchain expert who also co-founded the Imperial College Centre for Cryptocurrency Research and Engineering, leads the blockchain programme at Digital Catapult, where he convenes and guides non-FinTech players to experiment with the technology “in the right ways”. 

“The reasoning behind all of our blockchain/DLT work is simple – we love this technology and want to see it transform the world for the better,” says Robert. “But there are big issues standing in the way, not least the absence of visible demonstrations of its utility outside cryptocurrencies.”

Digital Catapult is busy trying to demonstrate compelling blockchain use cases beyond Bitcoin. One of the many large grand-funded blockchain projects Digital Catapult is assisting with is the EU Horizon 2020-funded INJECT, a project looking at the possibility of building automated license agreements for journalists to access new content. 

Another, VITALam – funded by the UK’s Aerospace Technology Institute – is exploring how DLT can help secure data from “additive manufacturing”, 3D printing to you and I. As additive manufacturing becomes more popular, there are growing concerns that printing files could be deliberately corrupted or stolen for gain. Defence, nuclear, and aerospace companies, therefore, want to ensure they can share digital factory data, learning and intelligence securely.

DLT4EU – another Horizon 2020-funded project – is an accelerator in its own right that Digital Catapult is itself accelerating. The agency forms part of a community of beneficiaries, advisors, and investors aiming to showcase the value of DLT for public sector applications across Europe. Its main focuses are driving the “circular economy” through applications like supply chain traceability, and digital citizenship through blockchain-assisted land registration and voting.

Alongside this grant-funded work, Digital Catapult runs a commercial programme called “DLT Field Labs”. The organisation invites large companies from “traditional sectors” that are critical to the UK’s economy, such as nuclear, oil and gas and construction, to “come together with a willingness to explore DLT to solve issues within their sector”.

“We take them through a structured series of investigations to identify where DLT is best applied, and introduce them to best-in-class UK DLT companies,” explains Robert. “The final stage is to have these DLT companies tailor their solutions to meet industry needs, and see these tested in the real world.”

Slow and steady

One of the biggest differences between blockchain and other disruptive technologies like AI – and why progress in the area is a marathon and not a sprint – is that blockchain is not a tool that can simply be bolted on to existing digital infrastructure. Genuine use cases necessarily encompass multiple stakeholders. Therefore, to unlock its real potential organisations must harmonise infrastructure with others. Robert says companies need to “collectively tip their toes in the water”. Single-party blockchain pilots, he adds, are “just sexier databases”.

“The fundamental problem is that DLT asks organisations to think about new ways of sharing data and aligning processes, to share common digital infrastructure,” says Robert. “This is a huge challenge in many traditional industries, particularly those who are under-digitised, or those who have been sold the fantasy that their data is gold and needs to be hoarded.”

This is why Digital Catapult’s blockchain programme is very much a “long-term play”, something which is a hard sell in our ultra-competitive tech economy. “I would say that success stories are still rather sparse and mainly focused in the FinTech sector,” admits Rob. “I hope this will change over the next few years, and that we can play a part in that change.”

Counting the costs

One of the loudest criticisms increasingly thrown in the direction of blockchain is that it is just an overly complex and expensive database.

In the banking sector, for instance, blockchain advocates have long-claimed the technology has the potential to be cheaper and faster than current settlement mechanisms. But in May last year, the president of Germany’s central bank said it had rested a multi-year trial project using blockchain to transfer and settle securities and cash, as it “proved more costly and less speedy than the traditional way”.

Another problem is that blockchain vendors are often guilty of providing a solution to a problem that doesn’t exist.

“Byzantine fault tolerance” is a characteristic that distributed networks like blockchain have to satisfy to maintain reliable records of transactions in a transparent, tamper-proof way. There are different ways blockchain networks attempt to satisfy this requirement. Bitcoin requires a computer-intensive Proof of Work model. A less-intensive (but also less secure approach) is a majority or multi-party consensus. The problem is that even if some use cases don’t require bulky or elaborate consensus mechanisms, companies can fall victim of being convinced that they are necessary:

“You could be right to say that blockchain/DLT is just a glorified database if used incorrectly. Many use cases out there won’t ever require Byzantine Fault Tolerant multi-party consensus. But for the ones that do, it’s absolutely critical. And part of our duty as a community is to correctly identify those use cases, call out bad actors or inappropriate applications, and to scream our successes from the rooftops.”

At Blockchain Technology World, taking place at the ExCeL London 11-12 March, Robert will discuss the state of the blockchain sector in the UK and the issues slowing the adoption of blockchain/DLT beyond the financial sector. His message to attendees is straightforward. “Don’t be afraid to experiment, but make sure you do it in the right way”.

“Begin by sitting across the table with your friends (or enemies) and you’ll soon find that the blockchain industry has some very inventive thoughts about future trusted infrastructure, and techniques for sharing and learning from private encrypted data are just around the corner. Private, in-house experiments may as well just use databases — and don’t be afraid to share your experiences in public.”