In 2016, the World Economic Forum began to conduct blockchain research on the ground

Rage Comment : Since 2014, the World Economic Forum has been focusing on future financial services and has considered it as part of disruptive innovation. Blockchain is now becoming an increasingly important factor. Unlike other organizations, which mainly discuss the development of blockchain technology at meetings, they will be more involved in the details of technology development and will conduct a series of case tests. They will release a report on blockchain technology in June 2016 to discuss the significant impact of such distributed ledger opportunities on the mainstream financial industry. It is worth noting that WEF has realized that the scope of blockchain's impact goes far beyond the financial field. "We are beginning to find that, in fact, blockchain's impact is greater."

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You can add R Jesse McWaters (Leader of Financial Innovation at the World Economic Forum) to the growing number of industry voices that are heralding that we have reached a “peak” regarding blockchain technology.

“I wouldn’t dare to expect too much from blockchain technology,” McWaters said in a new interview. The assessment came as he described the ongoing “awakening” of major institutional investors to the technology.

Even the WEF (World Economic Forum) has praised blockchain as a global 'megatrend', and McWaters worries that such language may encourage institutions to ignore the issues that blockchain technology will bring in the long run.

McWaters told CoinDesk:

“Suppose this technology not only has a distributed financial system, but also makes it easier to transition. I don’t think there is anything better than that.”

McWaters said that through his work with the Swiss nonprofit, he concluded that processes need to be restructured, stakeholders need to standardize data policies and regulations, and need to understand if blockchain systems are to be stable.

He continued: "It's exciting to see the awakening, but we must also remain patient while being excited. It will take decades for this technology to go from pilot to large-scale implementation, not months or years."

McWaters also compared blockchain to the internet industry, noting that the time required for transitions is often overlooked in the comparison.

He added: "What is being discussed now will not be fully realized until the 2010s."

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Until now, the WEF has mostly conducted its own trials.

Since 2014, WEF has focused on future financial services as part of disruptive innovation.

The first phase of the project, which culminated in the 'Megatrends' report in June 2015, has now entered its second phase, with organisations understanding the impact of the technology.

The WEF now intends to implement a program that will allow financial institutions to deepen their understanding of blockchain technology, according to a February press release.

The blockchain experiment is intended to explore how the technology can transform the field of digital identification.

As part of its research, the WEF said it would conduct secondary consultations, develop and stress-test use cases to support the implementation of the technology, although McWaters said it was best to think of institutions as “transmitters” of the conversation.

He later added: "We remain neutral in the discussion. We very much want to raise awareness of the protocol, but we don't feel we have the expertise to pick a winner or make a recommendation."

The WEF will host two distributed ledger workshops, the first in Australia in April and the second in New York in May.

Following up on this project, the WEF plans to publish a report summarizing its findings.

Unknowable Technology

To date, McWaters said the WEF’s role is to consider how technology affects business without engaging in what he called the industry’s “tech arms race.”

This means that when it comes to the industry, the WEF does not have an official position on the protocol, whether it is Bitcoin developers, Ethereum, Hyperledger or others.

McWaters said:

"Where we do secondary negotiations and people from the fintech lobby, we bring them together to talk about cases. We are also interested in looking at agreements on essential terms, because that can unlock value, but also in times of dispute."

McWaters said he has been in contact with a number of stakeholders, including BitPay, Chain and Digital Asset Holdings Ltd., as part of his investigation into the technology.

WEF previously named Ripple as one of the “Technology Pioneers” along with 49 other companies including Google, Mozilla and Twitter. As a result, Ripple was invited to attend the WEF’s annual meeting in Davos, Switzerland in January this year.

Evolutionary perspective

Underscoring the WEF’s vigilant approach in the future, McWaters explained that his organization has witnessed the transformation of blockchain over time.

For example, he said that initial mentions of blockchain technology in the report focused too much on its impact in the payments industry.

He recalled:

“Obviously there were a lot of applications in that space, but at that point, as we were wrapping up phase one, we started to see that, in fact, blockchain had a much bigger impact.”

He said the WEF's ideas now stretch the boundaries of previous thinking, but he remains open to the technology.

Still, he says the ecosystem benefits from the WEF organization, which provides a neutral venue for stakeholders like governments, small companies, big banks and others. The WEF is funded by membership fees, partnership fees and annual conference proceeds. Strategic partners include companies like Barclays, Cisco, Facebook and General Motors.

Peter Vanham, senior communications manager at WEF, told CoinDesk

“If you look at world finance, this theme is emerging and the WEF will have a role because it is not just a financial player.”

McWaters said his work with blockchain technology so far has been a “good journey” and he is excited about the potential impact on institutions’ need for quality information on science and technology.

He concluded:

"We note that there are still many unresolved issues."