What 3 things did we learn at London Blockchain Week 2018?
I am looking at three of the main talking points following London Blockchain Week 2018.
1) Initial Coin Offerings (ICO's) are being used as a new way to fundraise
The vast majority of Blockchain based businesses actively presenting on Exhibition Day were running ICOs to raise finance for their latest ventures.
Although the practice is largely unregulated, many Blockchain focussed businesses are turning to ICOs to raise finance rather than traditional routes such as angel investors.
In the legal world, I am starting to receive enquiries about legal support in this space and will be publishing an ICO focussed article later this month.
2) Smart contracts are being developed by many Blockchain businesses
Many of the businesses exhibiting at London Blockchain week had 'smart contracts' on their promotional material. The ability to program an automated, incorruptible contract is potentially a very attractive prospect in simple transactions.
One straightforward example would be the delivery of goods. The smart contract would be programed to automatically make payment once the goods were received by the buyer.
Another example used by the exhibitors was smart contract use in residential conveyancing transactions. However, given the complexity of that type of transaction a legal review will have to fit somewhere in the contract and no one had an answer for me as to how that might work. As a consequence, I suspect a workable system being used in the residential conveyancing space is still a number of years away.
3) Blockchain has its drawbacks
In the media Blockchain is often built up as a revolutionary new system that can achieve almost anything. Indeed, many of the exhibitors at London Blockchain Week were promising that their new ideas utilising Blockchain had the potential to expand worldwide.
As I discovered, there is just one issue with these bold proposals, scalability.
It came as a surprise to me to learn that the original Bitcoin chains are only capable of running 2 or 3 transactions a second globally. The latest iteration, Bitcoin cash, has only increased this to 30 transactions a second and as a result, transaction fees and clearing times for the cryptocurrency are constantly increasing. For comparison, a global payment company like Visa processes over 50,000 transactions a second!
There are firms out there actively developing new Blockchain software that promises to increase chain speed to hundreds of thousands transactions a second so a solution to these scalability issues may be just around the corner.