Finnovasia's blockchain conference attracted a lot of attention

     Yesterday’s Finnovasia blockchain conference attracted so much interest from the financial technology industry that extra chairs were needed to fill the auditorium.

     The conference in Hong Kong was focused on discussing how blockchain is changing the status quo of banking in Asia, where attendees heard insights from many financial professionals such as Peter Stephens, CTO of UBS Asia Pacific; George Harrap, CEO of BitSpark, Hugh Madden, CTO of ANX, and other company participants.

     Of all the attendees, Stephens was likely to draw the most attention from the audience, with everyone paying close attention to his thoughts on how financial services companies can incorporate blockchain technology and how the technology can drive the development of business models.

Stephens told the audience:

     “Banks are also getting into blockchain. They are trying to understand where the future is going. It’s not just a new customer experience, it’s a huge departure from the business model. It’s going to be a complete departure from the traditional business model, creating a new business model. Financial services will not be separated from blockchain technology in the future.”

     In response to a question from moderator Pindar Wong, Stephens further noted that Swiss banks are experimenting with a variety of blockchain technologies, including source code options for Bitcoin and Ethereum, as well as permissioned network models.

     Stephens also said that UBS is interested in how blockchain technology could replace “hundreds” of internal ledgers, and that the bank is not alone in its focus, adding that he believes blockchain could impact any process at a company, whether it’s “locking up money” or “manually intensive.”

Other stakeholders included Gatecoin CEO Aurelien Menant and Bitquant Chief Scientific Officer Joseph Wang. Alex Edana, CEO of WIP Solutions, also expressed his views on the different issues that blockchain technology may cause.

Bitcoin or blockchain

     Asked a question that has been asked frequently lately, conference panelists were encouraged to share their thoughts on whether blockchain technology is likely to “win out” or be widely used by the traditional financial industry.

     As expected, the diverse answers were largely dependent on the panelists’ business models.

     For example, ANX’s Madden has shifted to working with enterprise clients, preferring to offer them “mature products,” something that bitcoin is the only product that fits the bill in today’s blockchain market.

“When we need to add something to the market that won’t break, we’ll use Bitcoin,” he said. “If your timeline to market is two years, Ethereum is the more advanced technology.”

     Alex Edana, CEO of WIP Solutions, whose company is building a blockchain that doesn’t use proof of mining, also objects to bitcoin’s reliance on a distributed network of computers that is often beyond the control of any one person or company.

     “If you try to sell me something on proof of work or 10 minutes of production, I’d say ‘Why should I trust a third party?’ If you don’t know the miners, you’re going to have problems with know-your-customer (KYC), which is mostly an administrative problem,” he said.

     However, Edana was quick to dismiss his criticism, adding:

"As an asset, it would be fantastic. I think it's exciting."

Overloaded blockchain

     An audience member asked an interesting question. He asked the conference members how financial companies should use relevant technologies and whether they need partners to help them explore the required technologies.

     Here, Stephens talks about UBS and its partner, blockchain startup R3, to illustrate that he doesn’t believe banks can master the technology themselves.

     “Technology needs to be shared,” he said. “But you can’t share technology with yourself. That’s why we need collaboration. We’re not just working with R3, we’re also working with other startups, telecom operators and banks on trials.”

     Regarding the many projects going on in the blockchain space, another audience member asked how financial firms can avoid a situation where there are as many blockchains as there are private ledgers.

     In response, Stephens said he believes the financial industry needs to embrace “open standards,” which he believes need to become a feature, even for permissioned blockchains.

     Edana is certain that collaboration will be the easiest and fastest approach in smaller markets, where it is easier for companies to collaborate.

     “Australia will become the number one blockchain market in the next three to five years,” he said. “Right now there are only a few banks and two exchanges in Australia.”

     While the conference panelists may have realized there were too many questions about blockchain in the market, the audience was not tired of it.

     In a subsequent session, Ernst and Ira Dhalawong summed up the enthusiasm for the technology at the event:

“When it comes to blockchain, the room becomes less crowded.”