Australia: Blockchain ‘Interesting’ But Hyped

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Let me waste your time on finance, or in short, WYT, is a blog-driven to show and report all the latest news about finance subjects such as crypto industry, stocks, shares, forex etc. WYT is located in United Kingdom and Serbia and working to improve traders and investors lives.

Article originally published on Let Me Waste Your Time.

What a change! In May, the Australia’s Department of Home Affairs revealed a plan to investigate blockchain’s potential to bring secure and transparent international trade and supply chain management.

Today, the chief digital officer of Digital Transformation Agency (DTA), Peter Alexander said: “Blockchain: Interesting technology but early on in its development, it’s kind of at the top of a hype cycle.”  Alexander said at a parliamentary committee meeting on Tuesday, as reported by ZDNet.

He was further quoted as saying that most of the hype comes from companies seeking to make profits in this area.

“It’s not that we don’t trust any of the vendors – that would be an unfair characterization – we trust the vendors, but note that the motivation is generally sales and making revenue.”

He said standardisation of blockchain might open up more opportunities for its use in providing government services.

“We’re not saying that blockchain doesn’t have potential but today, without standardisation, there is the challenge of blockchain becoming a little fragmented. When we get to the standardised blockchain then the opportunities for it will grow.”

Alexander continued, saying that, “for every use of blockchain you would consider today, there is a better technology.”

According to Alexander said that one of the defining features of blockchain, the potential for anonymity, is among the biggest stumbling blocks.

“Generally speaking when the government is engaging with someone, we want to have a trusted relationship with them. We want to know who they are and give them a personalised service,” he said. “Blockchain is good for low-trust engagement, you don’t know who you’re dealing with but have a series of ledgers that can give some validation and support.”

Peter Alexander, the CDO at DTA said the technology is worth keeping an eye on but is not yet mature enough.

According to Alexander, blockchain is at the “top of the hype cycle”, with demand driven by the industry.

“It would be fair to say that a lot of the big vendors are pushing blockchain very hard and internationally most of the hype around blockchain is coming from vendors and companies, not from governments and users and deliverers of services,” he said.

It is indicated to this opinion  was arrived at after the Australian government’s Digital Transformation Agency (DTA) received  AU$700,000 (about US$500,000) from the government in May to explore blockchain applications within government services.

The Australian government’s DTA has cast doubts over the validity of blockchains for governmental purposes. The agency has been working with a number of government agencies to develop prototypes for the use of blockchain to deliver services, including with the Department of Human Services for welfare payments and cargo settlement.

On the other side Australia’s new prime minister, Scott Morrison, who is a fan of fintech, open banking and the technologies such as blockchain that will drive Australia’s future.

As treasurer, before being installed as prime minister, Morrison urged attendees at the Australian Fintech Awards in early August 2018 to take advantage of the disruption wave sweeping through the global economy.

“I am frankly counting on you not to stuff this up. You need to make this work…In today’s global economy, the ability for economies to become more productive is not being done the old way: the biggest transformer of productivity [will be] innovation,” he told attendees at the awards, as reported by the Australian Financial Review.

Unfortunately Australia is not isolated case.

China is another nation that finds blockchain’s anonymity a problem. Earlier this year Chinese students encoded allegations of sexual harassment against a prominent professor on the Ethereum blockchain to evade the country’s censors, all social media posts on the issue having been blocked. The same technique was used to spread news about low quality and counterfeit vaccines, another scandal the government sought to cover up.

But the Chinese government has drafted a new regulation that would require users to provide their real names and national ID card numbers when registering for a blockchain service, reports The Verge. The policy would also demand that blockchain services remove ‘illegal information’ before it can be spread among users. And under the proposed legislation, service providers would also be required to retain backups of user data for six months and to hand it over to the police on request.

China also banned cryptocurrency trading earlier this year, although apparently this has been less than effective. The Ethereum Hotel recently opened in the country, accepting payment in cryptocurrencies.

One note to remember. Without the possibility of anonymity, a permanent ledger could also be a powerful tool in the authoritarian regime’s surveillance and control systems.

Australia: Blockchain 'Interesting' But Hyped 1

Unlike Australia and China, UK leads the way in blockchain deployments for supply chain.

A survey by consultancy Capgemini of 450 organisations implementing blockchain in their supply chain has found that only three per cent have so far taken initial experiments into production at scale. While adoption and the technology itself are at an early stage, the Capgemini report identifies a number of current use cases, ranging from low complexity/high adoption scenarios such as the prevention of counterfeits and tracking asset maintenance, to more ambitious but complex uses including customer loyalty programs, contract labour procurement and regulatory compliance.

The UK currently leads the way with production and pilot implementations of blockchain projects in the supply chain, while the USA leads in terms of funding blockchain initiatives.

In the UK specifically, the consumer products vertical is the biggest adopter among those surveyed, followed by manufacturing and then retail. However, globally manufacturing is in the leads in adopting this technology.

Capgemini has been working with blockchain technology since 2016 when it began developing solutions for the financial services industry. The report predicts that experimenting with blockchain will peak in 2020, before entering mainstream supply chain usage by 2025.

While throughout the history there was numerous cases of unfounded fears of new technology. For many potential uses the blockchain is not mature enough or lacks the needed functionality, or there is the issue of the anonymity of users. On the other hand this anonymity could inhibit the nefarious motives and actions of less savoury governments against their own citizens.

Featured image: Pexels

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Let me waste your time on finance, or in short, WYT, is a blog-driven to show and report all the latest news about finance subjects such as crypto industry, stocks, shares, forex etc. WYT is located in United Kingdom and Serbia and working to improve traders and investors lives.

Australia: Blockchain ‘…

by LMWYT time to read: 4 min