Yesterday three predicted themes for enterprise blockchain came to the forefront: consolidation, contrasting views on governance, and tech wars. These themes have been brewing for some time.
Consolidation
The launch of komgo, the trade finance for commodities platform, was a consolidation. ING’s Easy Trading Connect (ETC) is being rolled into the business. But there is even greater overlap with blockchain platform VAKT, with seven of its nine shareholders investing in komgo.
A statement said that “due to a strong overlap of shareholders between komgo SA and VAKT, incorporated in 2017 to develop a blockchain based post-trade processing platform for commodities, the two companies will explore synergies between both platforms moving forward.”
ING is also involved in Voltron, an R3 Letter of Credit project, and one of komgo’s first solutions will be Letters of Credit. The Voltron project is ongoing.
This is likely the first of many consolidations, and especially in trade and trade finance. It’s been rumored for months that the Batavia trade finance consortium might merge with we.trade.
Every week or so there’s an announcement about a new freight shipping project. Yesterday it was Associated British Ports. Local ports or regions drive many of the projects. For example, there’s Australia and the UAE, just two of many others. Rotterdam was one of the first, and they have joined the IBM/Maersk TradeLens project.
While the TradeLens venture has done well to get 90+ organizations to sign up, there’s some vocal discontent in the marketplace. The shipping sector is notoriously competitive. TradeLens are likely to have at least one serious contender, if not two. In Singapore there’s the Open Trade Blockchain. R3 is working on one. Another is an Accenture led consortium.
Governance
While Maersk may be the largest container company in the world, Kuehne + Nagel (KN) is the largest sea freight forwarder in the world. Given KN selects the ships, that puts them in a critical strategic position. And they’re part of the Accenture consortium.
In written comments to Ledger Insights about the Accenture consortium, Kuehne + Nagel‘s Blockchain specialist, Dr. Ole Ottemoeller said: “One of the guiding principles is that ownership of the platform will not be restricted to the founding parties. The governance model will ensure that additional partners will be able to join with equal rights and obligations.”
“Also, it is important to mention that there is no intention of creating an additional revenue stream from the solution itself, apart from covering the operational and development costs.”
These comments don’t mention TradeLens, but the reference is clear. The same theme echoes across other industries. It’s about strategies and business models.
The strategy of starting with a small number of partners means its possible to move faster, but is less inclusive. TradeLens went that route, and in fact, the Accenture consortium did so as well. However, it matters what happens afterward with governance.
Concerning business models, there are numerous ones, but they mostly boil down to being for-profit or non-profit. Ledger Insights hears some pushback against for-profit across other sectors such as insurance and health.
There’s some irony here. Enterprises have avoided cryptocurrencies like the plague. But in recent months a more ‘enterprisey’ version of tokenization has become a hot topic. Usually for pragmatic reasons because it’s easier to represent an asset on-chain by tokenizing it.
However, at the CordaCon conference, there were also discussions about using tokens for incentives. And tokens could potentially enable laggards to participate economically in the success of the platform.
Technology choice
Both the komgo and Kuehne + Nagel announcements featured the theme of technology choice. Recently the majority of big announcements have been around Hyperleder Fabric or R3’s Corda. komgo’s choice is Ethereum, perhaps reflecting a continuation of ING’s work on the ETC project that’s being rolled into komgo. But it also may be hedging some bets, given several of the banks are R3 shareholders.
Kuehne + Nagel also made some comments on technology. They used Hyperledger Fabric “but without any further commitments to this specific blockchain software.” And they continued: “the technology used at the present time is recommended for productive use in applications with limited complexity only.” Though they were optimistic Fabric would improve. Corda is proving popular for more complex applications such as insurance.
Also yesterday, R3’s CTO Richard Gendal Brown told CoinDesk that enterprises wouldn’t tolerate using multiple platforms. That’s an argument Ledger Insights has also heard from proponents of other technologies.
But right now there’s a problem with the one size fits all approach. Outside of blockchain, any organization has numerous applications. They might range from the trivial to the complex. If an enterprise wants to implement multiple blockchain applications, they also might have a similar complexity range. And in some cases using the same blockchain technology for all types will mean a significant compromise in one or more of the applications. Ledger Insights will have more on that issue shortly.
All three themes of consolidation, governance and tech wars featuring on the same day is a sign of enterprise blockchain coming of age.
