A developer’s perspective

AARON MCDONALD, co- founder of Auckland- based blockchain company Centrality (which now has more than 200 developers within its portfolio) describes blockchain from a business owner's point of view as a “modernday cooperative”, where governance is controlled by software rather than a board of directors. “Everyone in this cooperative community is involved in making the business successful and benefits from its success.

“The real power of blockchain is the ability to share any kind of data between parties and agree on how that data is updated,” he says, adding that it effectively takes the data monopoly away from big companies and gives smaller businesses the opportunity to compete better using the power of their combined data. “They don't even have to know or trust each other; just agree on a set of rules that everyone must abide by.”

McDonald explains how the TrackBack partnership ( see main story) is a good example of giving a group of small businesses ( The HUI Ma ˉ ori Collective) the ability to provide the same online experience to a consumer that a mega- company like Amazon would provide – delivering the same level of trust without investing huge sums of money.

He says there is a way to provide a customer experience without having to give up their most valuable future asset – their customer database.

“At Centrality we're creating the tools that make it easy for a small business to engage in this new world without having to think about the blockchain technology underneath. We just say ‘ here's a cool new app that treats you better, provides more privacy, and is easy to understand'.”

His advice is not to get hung up on the technology, just consider the business outcomes: a better relationship with customers, better service experience, and control of your economic destiny.

“Those are the kind of outcomes we're endeavouring to deliver. Our goal is to get the technology to a point where businesses don't have to think about how it works.”

McDonald says while 2018 was about working on the blockchain infrastructure layer for Centrality and other developers, 2019 will be about refining the user experience, and New Zealand should start to see some strong adoption statistics originating from core areas of application development.

“On the financial side there's been a lot of infrastructure groundwork put in place to encourage bigger participation from the finance industry – and that will also bear fruit in 2019,” he says.

Get ready for New Zealand's own digital currency too, he says. “It's absurd that we don't have digital money for our digital economy.”

While blockchain is still at the ‘early- adopter' phase, McDonald thinks businesses should try to understand how the system works. “Watch Banking on Bitcoin on Netf lix, or a documentary called The Trust Machine to learn how the technology operates and how the future will look. Then look at the opportunities within your business to transform the way you interact with customers. Can you automate some of your financial processes and contracts? Would automating your terms of trade improve your cashf low, for example?

“How would programmable money impact the way you interact with customers, suppliers, employees and partners? How does that change the way you might plan for your systems and processes to work in the future?”

Having everyone working off the same digital spreadsheet will be good for cashf low, suggests McDonald, because everyone can see where any potential hold- ups are in the payment chain.

“That's the kind of transparency and efficiency blockchain technology provides.

“Blockchain delivers a lot of power back to businesses and individuals in their decision- making,” he says. “We can no longer live in asymmetric information economy, where big players have access to information that the smaller players don't – and consequently smaller players aren't making the right decisions.

“If the world's financial systems were more open we wouldn't have some of the financial crises we've had in the past.”