We are now in the middle of a “spring”, which is helping organizations to reimagine the way they deliver value. According to PWC, blockchain will add $1.76 trillion in global economic growth by 2030 .
The majority of the increase in business-to-business (B2B), implementations is expected to be driven by the immutability, security and streamlining benefits offered by blockchain-based relationships and transactions. It’s difficult to quantify the benefits that enterprises can reap from blockchain-based transactions and relationships, particularly when you consider the rise of agile competitors.
However, small and medium-sized businesses (SMBs), are more agile and quicker in adopting new technology, but enterprise adoption is slower. There are many gateways, long sales cycles and strong incentives for internal stakeholders to continue as they are.
Related: The Enterprise Blockchain of Today: Some fail, but others have potential value
Join the consortium
The rise of enterprise blockchain is partly due to a desire of corporate decision-makers for collaboration to create and share similar solutions. It was hoped that more entities would work together to develop and manage proof of concepts or pilot phases. This could increase the value of developments. These efforts were made possible by joining larger collaborative organizations or “old world” consors. We began to see the formation of designated blockchain consortiums for specific industries, such as RiskStream or B3i.
Existing industrial consortia or governance bodies established designated networks for their members, much like the GSMA’s attempt to do so in the mobile space. 92% of the executives who participated in Deloitte’s Global Blockchain Survey 2019 said that they were already a member of a consortium or had plans to join one.
Similar: Public, private and consortium blockchains: What are the differences?
Looking back, however, it appears that enterprise blockchain production deployments have one thing in common. Very few are led by consortia. Some companies have formed ad-hoc consortia to represent the interests of different ecosystems in order for early adoption and initial consensus. Tradelens and Mediledger are two examples. The bottom line is that the solutions were developed by for-profit providers, and then adopted by for profit companies.
Industry silos are justified because of the dwindling.
Public chains are not ideal for enterprises who want to test the technology and develop use cases. This is especially true for those who prefer to keep their operations private. Developers were forced to develop blockchain in siloed fashions before interoperability was a major industry focus. They were owned, governed or permissioned by consortiums.
It’s a decade later, and the consortia remain tied to private-permissioned executions. Evolution is a constant in the enterprise blockchain space. We need to reconsider the role of blockchain consortiums in the equation, given the increased interoperability and incoming Web3 wave.
DAOs will replace consortiums in the enterprise space.
New incoming infrastructures for enterprises and the role of decentralized autonome organizations, leveraged by smart contract and governance protocols might well replace the blockchain consortium as the industry focal point. DAOs have also caught the attention of conventional investors, including Mark Cuban, a billionaire who said they were “the ultimate combination between capitalism and progressivism”.
As DAOs acquire legacy businesses, the future of corporations may be quite different. This is the ultimate mixture of progressivism and capitalism. Entrepreneurs who enable DAOs could make $. Everyone benefits from the success of the community’s governance. The price of trustlessness is high
— Mark Cuban (@mcuban)
May 31, 2021
Andreessen Horowitz Venture Capital, also known as a16z has also managed multimillion-dollar fundraising rounds for both DAOs and companies that support DAO formation. However, DAOs are only useful in certain contexts. Not all enterprises that seek alignment can execute this idea. In 2022, expect some exciting developments in this area.
Related: DAOs form the foundation of Web3, the creator economic and the future work
What are the best consortia to serve? Not the network, but the standards
For most ecosystems, agreeing to a unified data format would be a significant step forward. It’s not impossible. Although they were thought to be rivals, Contour and GSBN collaborated to create a model that would drive digitization in the global shipping industry. This positively facilitated interoperability between the users of both GSBN and Contour’s solutions. Consortiums are a way for businesses and corporations to collaborate and reach a common goal.
Despite their best efforts, industry consortia are unable to compete with the rapid pace at which the tech industry is constantly creating new platforms, solutions, and networks. They will quickly become irrelevant if they continue to define the exact nature of the stack. They will create value for their customers if they establish standards that can make any stack of transformation easier to adopt. Voting and reaching consensus on features and a common roadmap can be done without the involvement of intermediaries in this Web3 era.
This article is not intended to provide investment advice. Every trade and investment involves risk. Readers should do their research before making any decision.
These views, thoughts, and opinions are solely the author’s and do not necessarily reflect the views or opinions of Cointelegraph.
Ruth Levi Lotan serves as a vice-president of sales and marketing for ClearX. With a background in strategic consulting and business intelligence, she is passionate about partnerships. She has worked with top companies with global footprints for more than five years. She has over three years of experience in impact investing and financing, including business development with institutional investors. Ruth was also involved with the creation of Israel’s first Social Impact Bonds, a unique mechanism that allows for cooperation between sectors that aren’t usually align.
