Blockchain to the future
Mon 14 Nov 2016
Brian Donegan, head of e-business operations for the Isle of Man Government Department of Economic Development, discusses the future of blockchain and explains why more intellectual capital is required to perfect the blockchain technology stack…
As far as the blockchain is concerned I continue to be its biggest fan, advocate and evangelist! However, when one strips away the hype there is still work to do.
Let’s start with the ID issue relating to sanctions compliance. As far as banks are concerned, they have to know the identities of both sides of a transaction when it’s being broadcast to the blockchain. They have to know “I am who I say I am” and the same for the counterparty to the transaction. That bit of the blockchain jigsaw is still unfinished.
Many technology groups are working on the ID project, some of them on the Isle of Man. We are still waiting for the first tech group across the line with a federated KYC solution or a notarised identity solution for this challenge.
Another interesting aspect of blockchain technology pertains to the economic opportunity. The old cliché still persists about the comparison with blockchain development being now at the same stage that the internet was at in 1994. I disagree. There is no denying the blockchain technology is groundbreaking; the immutable nature of its transactions that cannot be repudiated, by itself, is very exciting.
As far as remaining development work is concerned it really is a case of ‘Back to the Future’. In the movie of the same name, its principal character, Marty McFly, travels in time from 1985 and I think that’s probably where we are in time development terms because, to extend the internet comparison, we have yet to develop the blockchain equivalent of the internet’s TCP/IP, HTML, and web. We need to work on the wider blockchain product suite, including key components, language and ISPs, for the technology to be a sophisticated technology truly fit for the 21st century.
Addressing the skills shortage
A further challenge for the future of blockchain is overcoming a skills shortage. Where are all the developers going to come from? Who or what is going to satisfy the exponential demand?
Last month the Isle of Man launched the IT & Education Campus which provides university degree programmes for Computer Science and Data Security, and will widen its scope in future years to answer demand for other sophisticated skills.
The Isle of Man comprises world class telecoms interconnectivity, 100% broadband penetration, six tier 3 data centres, and power self-sufficiency
Undergraduates will be allowed during their degree programme to work for two days a week with local private companies in the ICT sector. Interest in this is already very encouraging from prospective students and employers in the digital space. It means that on graduation, students will be work-ready with not only a quality third-level education, but also a valuable skills base built up with local firms during their undergraduate years.
The prospect also exists for graduates who wish to develop their own business to enter into a potential accelerator programme. This will put the Isle of Man in an interesting position for 2017 and beyond. The Island was the first jurisdiction in the world to introduce relevant blockchain industry regulation for ALM/KYC/ATF, reducing criminal threats, protecting the consumer, and addressing the skills shortage.
Growth in digital sectors on the Isle of Man has been predicated on the two T’s: Tax and Technology. The capital gains for companies being sold is rated at zero for tax purposes, and the technology platform comprises world class telecoms interconnectivity, 100% broadband penetration, six tier 3 data centres, and power self-sufficiency with all electricity derived from natural gas supplies (the island even exports its surplus to the UK national grid). When both T’s are taken in context, the Island offers a special proposition to digital business not easily found in the western world.
In addition to this, earlier in 2016 the Isle of Man Government launched the Economic Development Scheme (EDS) – an investment fund of £50 million specifically designed to invest in dynamic start-up businesses with the potential to grow jobs and revenue in the short and medium term. So far the response has been very encouraging with dozens of smart management teams with clever ideas seeking to establish operations in the Island.
Back in 1985, Marty told us ‘thirty years from now we’ll have flying cars and hover boards, and he wasn’t too far off in his predictions. Little did Marty know, these assets could be digitised and electronically traded in the ether… and not even a 1985 paper dollar bill in sight!