There are always rumours about big names getting into blockchain. Crypto news sites are constantly overflowing with articles about the likes of Microsoft, Twitter, Facebook, Amazon, etc. jumping behind this new, revolutionary technology. This level of enthusiasm, of course, is not without reason: Enthusiasts within the community know that every brick counts when it comes to building a future that relies on the vibrant promise of transparency and decentralisation.
However, if a company has stood out due to its level of involvement with blockchain technology, that is IBM. For this article, we contacted the computation giant’s Director of Digital Assets, Nitin Gaur, to join us and discuss blockchain scaling, the challenges of endorsing new technologies, regulatory risks, and building better systems. Nitin has been at IBM for 19 years, devising industry standards, use cases and working towards making blockchain for enterprises a reality. Nitin also founded IBM Blockchain Labs and has worked to develop IBM Mobile Payments and Enterprise Mobile Solutions.
Taking IBM into the Web 3.0 world.
One thing that stands out right from the beginning when talking to Nitin is his mixture of technical and theoretical knowledge. And, naturally, the first question to come to mind is why has IBM taken such a particular interest in blockchain technology. He addresses his beliefs by saying:
“One thing that I’ve focused on (generally around big players), is in the fact that this technology has great potential. I think that regulated financial institutions and regulated entities should focus more on understanding it as an opportunity, rather than spend their time fighting it. There is massive potential, and there is a lot of good that can be done with it. Of course, you might miss on some immediate revenue or instant opportunities by going after something in the present… but still, a solid business foundation is to always look for the long-term potential.”
As for IBM, Nitin also adds:
“Many people don’t realise that the IBM Blockchain Platform has already been running for quite a while, and it’s been very successful for trade logistics, trade finance, issues with the supply chain, and safety. As we continue to explore this technology and to move closer to financial solutions, we continue to see more and more exciting solutions coming on the application end of this technology. Solutions that aim to do something deeper than just offer computing efficiencies. We see applications that are trying to change the world, such as the FinTech, RegTech, and challenger communities. Everything we use is based on open-source software, and as a tech company, we are thrilled to jump into new technologies that come so fast and with such great potential”.
Solving traditional problems in a non-traditional environment.
IBM’s Blockchain Platform aims to implement transparent solutions among a wide array of industries.
Since IBM has gone deeper into financial solutions, integrating both small and more prominent names in the industry, it is interesting to see the core belief Nitin has on the importance Digital Assets play on future financial models. As his area of expertise, he was able to elaborate on what shapes his department’s decision-making process, as well:
“I see digital assets as the leading step into a whole new, global economy. We currently have FinTech corridors operating between jurisdictions, and I think that is just a taste of what needs to happen eventually across the globe. (…) Of course, for this, crypto-economic systems are key, because they bind together the whole governance system. You can draw an analogy between the blockchain and the creative global system we know as the Internet by saying commercialisation was what made the Internet be here to stay, and that crypto-economics will play the same role in maintaining blockchain-based systems around, as we decouple complexity from solutions. For example, (Non-technical people) don’t know and don’t care about how their email system works, because these are already-established protocols, and they don’t need to pay for it.”
Similarly, Nitin shared the three pillars that need to be addressed to safeguard digital assets along with their intrinsic value, and therefore foster their adoption, the BLT:
- Business: Creating sound business systems that allow for excellent solutions.
- Legal: Complying with existing regulations.
- Technology: Leveraging solid technologies to make for the best possible solution.
And, on a technical level, the 3 Is help his department stay focused on what matters the most when it comes to developing solutions:
- Infrastructure: Underlying technologies (such as the blockchain) and the ability to keep and safeguard digital assets safely.
- Instruments: “Since we live in a highly governed, regulated world, each digital asset is considered an instrument on itself, and should be considered individually instead of generally. Therefore, every asset should have governance and a legal framework around it.
- Intelligence: From an intelligence/insight perspective, he considers real-time knowledge and analytics an essential part to incorporate into everything that comes from IBM.
Furthermore, Nitin dives into the importance of preventing mishandlings and being able to spot fraudulent actors to make Digital Assets safe and widely available:
“I’d like to stress this because there is an idea that regulators somehow are trying to hurt the space. In reality, regulation is just there to protect you and me, and we need to focus our efforts into educating regulators so that they can make the best possible decisions to empower what’s already out there. Of course, there is some risk for companies of being forced to pull back due to regulations, as it happened to Uber. So, companies need to measure their efforts carefully in order to turn favourable laws into immediate advantages as first movers.”
It’s important to remember that Uber was recently forced to pull their services away from California, where they first started. Nitin addresses this and highlights the importance of educating and encouraging regulators to foster tech:
“In the end, it is sad to see these things happen, particularly because Uber took such a unique approach to stand out and make regulation go in favour of tech that we now know was world-changing”.
The invisible solution: The blockchain as a means, not an end.
If you want to check out the full interview, you can do so on our YouTube channel!
Just as he did with the BLT/3Is, Nitin is excellent at sharing quick heuristics and rules of thumbs to help non-technical users navigate complex ideas. He also simplifies the well-known Layer protocol structure that developers often use to refer to the depth of technology implementation, helping us portray a roadmap for mass-scale adoption:
“Just as when you go to the bank, and you log into an ATM you expect to be able to withdraw your money because you know that’s the way things work, and your money is supposed to be there because you have an account, blockchain should be an invisible technology. You should not have to think about how you’re using it unless you want to, and that’s the real challenge for us, that FinTech is trying so hard to solve right now.
So then, to create adoption, you need to go through different stages. Just as you don’t pay for email anymore, which was a Layer 1 stage, now you don’t, and those are Layer 1 protocols (the most basic solutions), which is the reason blockchain might seem overly complicated right now. But then, just as we start to dive deeper into Layer 2 and 3 protocols and you start dealing with things like scaling, identity, and security, things become a bit more attractive. By that time, you get to Layer 4, which is where things such as DeFi currently are, and you can have an imperfect but finalised product.”