Blockchain will have profound effect on economy, says Data61 study

Blockchain will have profound effect on economy, says Data61 study

CSIRO's Data61 reports the risks and opportunities of distributed ledger technology and smart contracts

You probably already have an opinion on blockchain, which sits somewhere on the scale between “the biggest thing I’ve seen in my life” to “a lot of hype”.

Views on distributed ledger technology, however, are a lot easier to find than examples in enterprise. There have been a number of proof-of-concepts – Australia Post and Blackmores in March joined a blockchain initiative run by Alibaba on food providence in China; in May electricity retailer AGL revealed plans to trial peer-to-peer energy trading by households using distributed ledger technology; and in January, Commonwealth Bank of Australia and Queensland Treasury Corporation created what they claimed to be the first government cryptobond – but widespread adoption appears to be some way off.

Or does it?

“The pace of change we are experiencing as a nation is exponential and we can’t afford to be followers in the adoption of emerging technologies like Blockchain,” chief executive of Data61 Adrian Turner said yesterday.

To help business leaders make sense of the technology and realise any benefits, Data61 – formed out of a fusion of the CSIRO’s digital productivity group and NICTA – today launched a comprehensive review of blockchain and smart contract technology.

Over the past nine months, Data61 engaged with experts across industry and government to determine the regulatory, financial and technical implications of adopting blockchain based-technologies. Made up of two reports, the study puts forward some use cases that can be achieved today, as well as series of scenarios around the technologies’ future.

Speaking at the press launch yesterday at Data61’s headquarters in Redfern, Turner said the work cut through the hype with “scientific rigour” and objectivity.

“I want to caution that despite the enormous potential here, there are still some issues and hurdles to overcome,” he explained. “And it’s our job to look at all sides of this. Not only the opportunities but also be objective about the limitations. It’s not fully mature technology. There are limitations, but we believe the technology is here to stay.”

Use cases put forward in the study are; for supply chain purposes to improve visibility and track provenance; to create a registry of open government data to improve access and facilitate interoperability with registries of commercial data; and in payments to improve efficiencies in international remittance payments.

Technical risks, possible software architectures, systems designs and their limitations are also covered, and popular myths surrounding the technology are laid to rest.

The study highlights that there is, as yet, no clear pathway to widespread adoption, and further research is required to prove blockchain systems are trustworthy, work as intended, and are able to operate alongside legacy systems.

Nevertheless, the study’s authors sense we are on the cusp of something big around blockchain.

Group leader of Data61’s Software Systems group, Mark Staples said: “It feels to me now, blockchain feels like what the internet felt like in the late 90s.”

Ignore and perish

Assistant Minister for Industry, Innovation and Science Craig Laundy told gathered media yesterday that blockchain had suffered an image problem, but had reached an inflection point.

“It’s obviously an emerging technology but the waters have been muddied somewhat with Bitcoin and the dark web. And it is fair to say also there has probably been pushback from industries where this runs the risk of being a major disruptor,” Laundy said.

“However in the commercial world, the reality of it is that at some stage private enterprise works out – hey this could be a major fork in the road, we’ve got two choices: we embrace and invest, or we ignore and perish.”

In a statement, Treasurer Scott Morrison, said blockchain would have a “profound impact” on the economy.

“We should all be answering the question, whether in Government or the private sector about how we can use blockchain developments right across our economy,” he said.

Centre stage

Australia is setting itself up as a world leader in blockchain technology.

Independent body Standards Australia heads an international technical committee in developing ISO standards for blockchain.

“This exciting initiative will put Australia at the centre stage of global innovation and digital disruption,” said Standards Australia CEO, Dr Bronwyn Evans at the time.

In May a 26-member delegation from Austrade, Data61 and New South Wales and Victoria state governments represented Australia at blockchain summit Consensus in New York.

Earlier this year the Australian Securities and Investments Commission (ASIC) released guidance to help Australian corporations that are considering the technology.

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Tags CSIROBitcoinBlockchainData61distributed ledgersmart contracts

More about AustraliaAustralian Securities and Investments CommissionAustralia PostBlackmoresCommonwealth BankCommonwealth Bank of AustraliaCSIROCUAISONewsNICTAQueensland Treasury CorporationStandards AustraliaStaples

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