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Blockchain: What is it good for?

Sydney, April 9: ACS, the professional association for Australia’s technology sector, today released its new collaboration report authored by Data61 – Blockchain 2030: A Look at the Future of Blockchain in Australia. The report explores eight scenarios for future adoption of blockchain technology in Australia.

The scenarios are designed to challenge current perspectives, define and explore key uncertainties, and provide a common set of shared narratives for industry, government and community stakeholders.

“It’s fair to say that the hype around blockchain is fading and we’re likely heading towards what is sometimes called the ‘trough of disillusionment’. It’s been over a decade since blockchain was first introduced and though the hype has faded, distributed ledger technology is far from dead,” said Dr Alexandra Bratanova, Research Scientist at CSIRO’s Data61 and lead author of the report.

ACS President Yohan Ramasundara added, “Investment in blockchain is still growing significantly and right now there are 14 job positions for every blockchain developer. And while current activity is largely concentrated in financial and insurance services, there are many potential applications across the gamut of Australia’s industries.”

The report outlines Australia’s competitive advantage, already home to world-first blockchain applications in bonds operations, smart programmable money and international standards, as well as industry-specific trials in energy, agriculture and the public sector.

“Using the lens of the Gartner Hype Cycle for new technologies, the next phase of development is what is known as the ‘plateau of productivity’, where technologies simply become a part of the fabric of the technology and business landscape,” Dr Bratanova said.

“Trust is the big X factor,” said Mr Ramasundara. “Citizen reactions to the Cambridge Analytica scandal, the banking enquiry and rising incoming inequality has seen an erosion of trust in centralised institutions. Should this trend continue, it may very well be the platform to ignite blockchain adoption and other decentralised technologies.”

 

 

To read the full report, visit: https://www.acs.org.au/insightsandpublications/reports-publications/blockchain-2030.html

 

The report was launched by ACS at its Barangaroo Technology and Innovation hub at 12:30 on 9 April.

 

Key messages from the report:

·         There remain unknowns around blockchain’s capacity to work at scale while remaining decentralised and protect confidentiality whilst also being transparent.

·         Challenges such as data portability, privacy and private key security, user savviness and safety, and accuracy of data on blockchains are yet to be resolved.

·         A growing body of literature indicates investments in blockchain do not necessarily represent the growing capabilities of the technology, but rather reflect the excessive hype surrounding it.

·         Different types of blockchains represent different trade-offs between trust, scalability, functionality and efficiency.

·         Distributed ledger technologies, which have the ability to automate the three functions of a trusted third- party intermediary (validating, safeguarding and preserving transactions) seem like a natural step in the new stage of trust evolution.

·         Future dominant blockchain solutions will need to overcome the challenges of scalability, speed, flexibility and interoperability.

·         Once a dominant design emerges and is widely accepted, it could serve as an industry standard and reduce adoption costs through cumulative learning.

·         New developments signal that scalability for blockchain technology may be on the horizon:

o    SegWit increased transaction throughput by around 40%.

o    The Australian Red Belly Blockchain can now handle 660,000 transactions per second on 300 machines, compared to 2,000 transactions per second globally on the VISA network.

o    Lightning Network, a second layer operating system on top of the blockchain, also raises the possibility of orders of- magnitude scaling for public blockchains.

o    Forfeiting some decentralization has also allowed for greater scaling.

·         Researchers demonstrate that between 2016 and 2018, on average, mining one dollar worth of cryptoassets (Bitcoin, Ethereum, Litecoin and Monero) took more energy than it did to conventionally mine one dollar worth of copper or gold.

·         Increased funding for blockchain could be a precursor to innovation and adoption. However, some researchers see the hype around Initial Coin Offerings (ICOs) as analogous to a gold rush.

·         Accelerating funding growth will level out in future, with investors seeking real returns from venture capital recipients and ICOs.

·         There has been a 50% increase in the number of investments in blockchain-related start-ups from 2016–17 globally. There are 14 job openings for every blockchain developer, a four-fold increase in the amount of VC funding for the technology since 2012 and 8.1% of current Aussie tech start-ups are in the blockchain business (up from 3.4% in 2016).

·         Using strategic foresight methodologies, Data61 has developed eight possible scenarios for blockchain adoption in Australia.

 

 

 

-ENDS-

 

 

Further information

Troy Steer
Director of Corporate Affairs and Public Policy
M – 0417 173 740
E – [email protected]

 

 

About ACS

ACS is the association for professionals working in Australia’s technology sector. More than 45,000 ACS members work in business, education, government and the community.

We are passionate about the technology profession being recognised as a driver of innovation and business – able to deliver real, tangible outcomes. Our vision is for Australia to be a world leader in technology talent that fosters innovation and creates new forms of value. Visit www.acs.org.au for more information.

About Data61

CSIRO’s Data61 is Australia’s data innovation network that transforms existing industries and creates new ones through the application of science and technology. As an applied R&D partner, Data61’s capabilities range from cybersecurity, confidential computing, IoT, robotics, machine learning and analytics, software and programming to behavioural sciences and more.

As of April 2019, CSIRO’s Data61 is among the top blockchain research organisations in the world, and the author of five of the 30 most-cited blockchain research papers globally.

For more information, visit www.data61.csiro.au.