Q&A: Cloud, freedom from legacy IT can spur blockchain in Africa

Blockchain technology has already had an impact on diverse industries and has begun to demonstrate how it can improve operational efficiencies particularly for the small and medium-size enterprises (SMEs) so crucial to the growth of emerging markets, according to Anthony Butler, the leader and chief technology officer for IBM’s Blockchain Services business in Middle East, Africa, and Turkey.

Butler – a prolific innovator with multiple patent filings in cloud, mobile technologies, blockchain, analytics, and security – leads a multinational team of consultants, architects, and developers to help clients and consortiums leverage blockchain technology.

In this edited Q&E, he talks about how emerging technology like blockchain is within the grasp of developing countries, what sorts of skills are needed for blockchain projects, and how the distributed ledger technology will shape enterprise business processes in the future.

IBM has been working on blockchain technology for many years and has been developing blockchain-based global trade solutions for industrial supply chains. Why did your company chose to explore such a complex vertical?

IBM

We have explored and implemented blockchain in many contexts and domains where there are inefficiencies, waste, impeded customer experience or other challenges that the technology can address. Blockchain is a technology suited for network problems and these tend to be, by definition, complex as they involve multiple entities, such as different parts of a supply chain. We see global trade, as do our customers and partners, as being an area where there is tremendous room for improvement and the nature of the domain is such that it involves multiple parties who don’t trust each other necessarily and therefore lends itself well to the application of blockchain technology.  We worked with early adopters like Maersk, Walmart, and others to quickly understand the efficiencies that could be gained in their respective industries, have implemented different networks, and now scaling to address inefficiencies across a variety of verticals and industries.

What other use cases will IBM Blockchain be applied to?

We have use cases across most industries, particularly those where there are challenges or complexities around different value chains. For example, in travel and transportation, we are working on logistics and how blockchain can be used to improve visibility into the movement of different forms of cargo as well as digitise the documentation associated with that movement of cargo.  In government, we are helping governments across the region and world reimagine the business of government through the use of blockchain technology.  In the banking industry, we are working with a number of Central Banks to implement Central Bank Digital Currencies and we are working with Commercial Banks to implement different supply chain finance solutions, such as We.Trade in Europe and others.  We are working on how we can improve the sharing of KYC information between different entities. We are working in oil and gas industry to address inefficiencies related to tracking of hydrocarbons. We are working in media industry to address various kinds of fraud. We are now at the point where we have multiple use cases in pretty much all industries. These are just examples and not exhaustive.

What do you think businesses across Africa need to understand when it comes to blockchain adoption?

For businesses in all emerging markets, it’s important to realise that these emerging technologies, like blockchain, are very much within their grasp for two reasons. Firstly, cloud has democratised access to such technologies that means it doesn’t matter where someone sits geographically they can get access to the latest technology at less marginal cost than if they had to deploy locally; and, secondly, many emerging market countries are unencumbered by the kind of legacy technology and infrastructure that makes adoption of a fundamentally transformational technology like blockchain a challenge. I would therefore encourage all businesses in Africa to look at how they can make these technologies the foundation of their transformation and roadmaps for the future. 

Where do you envisage blockchain technology making the biggest impact in the lives of people in developing countries?

I think there are quite a few areas where blockchain can have a significant impact. One of the challenges that many emerging markets face is in how to support the growth of the SME sector which will enable large numbers of people to improve their living conditions. Blockchain-based trade finance and supply chain solutions can not only remove a lot of the friction and complexity but also enable more innovative ways to provide supply chain finance to help these businesses grow. 

What are some of the challenges you’ve faced from a business and technical perspective trying to develop some of your blockchain solutions?

Developing or implementing blockchain-based solutions requires collaborative effort. The biggest challenge is usually when you need to pull together the business network and encounter members in that network who may be competitors or are not used to sharing. To be successful, a fundamental shift in the way in which most businesses think about business intelligence and how they interact with the broader ecosystems needs to take place. For this reason, we see governance as one of the most significant business challenges. If you have, for example, all the banks in a market in a network, who is then responsible for deciding who joins and who leaves, who decides what changes get made, who owns the data, etc.? So there is a long list of considerations that have to be taken. On the technical side, I think the biggest challenge is that this is a new technology.

What do you look for in terms of skills or qualities for your blockchain teams?

Different types of skills are required to execute a blockchain project. We need consultants who can think about network problems and help clients translate these into blockchain-based solutions. We need architects who, whilst they should have deep knowledge of different blockchain protocols, should understand that 80 percent of work in any blockchain project is traditional application development work, such as designing integration layers, microservices, etc. Then we need developers who can work with the different protocols, and write the smart contracts and integrate these with the rest of the solution. As blockchain is obviously a new technology, it’s unreasonable to expect people with 10+ years of experience in the field but rather we look for people with strong general application development experience and, most importantly, an understanding of distributed systems design and implementation, cryptography, and people who understand the data structures and algorithms that underpin the blockchains.

How do you predict the blockchain space will be different in two years, and how do you see IBM shaping that change?

We recognised the value of blockchain very early. Initially, it was a research project that we incubated before handing over the code to the Linux Foundation to form the basis of what became known as Hyperledger Fabric. We continue to be involved as part of that open source community in a number of Hyperledger projects so we are supporting the evolution of the technology at a protocol level. We are also continuing to focus our Research division on what is coming next with respect to blockchain so this naturally means research into things like quantum, application of AI to blockchain data, security, and crypto-anchors (which allows us to physically link products or objects to the blockchain). 

We are continuing to work with innovative clients to really push their industries forward.  The work we did with Maersk that evolved into Tradelens is a great example or the work we are doing with Golden State Foods in the United States to improve cold chains and ultimately the freshness of foods delivered to restaurants. The work we are doing with Central Banks is reimagining money and how it will exist in the future. So we are really co-creating the future of blockchain with clients.