Nordic 360 Blockchain Conference

Keynote Address
18 Trends in Blockchain/Distributed Ledger Technologies (DLT) for
2018
Nov. 7,
2017
Nancy Amert, Director of CGI’s Trade Innovation Lab
© CGI Group Inc.
Agenda
• Introduction
• Blockchain and Distributed Ledger Technologies
(DLT)
• Trend Watch: 18 Hot Trends for 2018
• Some Tactical and Practical Guidance
• Q&A

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Introduction
• Separating the signal from the noise in
the world of Blockchain can be a
challenge, but steady progress
continues in just about every industry
around the world

• If 2017 was marked by numerous

proofs of concept (POCs) and platform
developments

• 2018 is expected to bring this

technology from pilot phases to
commercialization

• 18 Blockchain trends for 2018

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The Blockchain Potential
• Potential uses for Blockchain technology are everywhere
• Two main areas:
– To disrupt current structures and business models
in our society
• We solved our current “trust problem” by utilizing
intermediators, like banks, energy & utility companies,
government entities, clearing houses, etc.
– To increase the efficiencies in existing structures
• For example, estimated annual cost savings of 12-20B USD
in clearing and settlement costs for large global investment
banks
• Blockchain has the same potential as the web had when
it first was introduced

All sectors and all companies may be

impacted
https://www.economist.com/news/leaders/21677198-technology-behind-bitcoin-could-transform-how-economy-works-trust-machine

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Trend Watch:
Blockchain & Distributed Ledger Technologies
(DLT)
18 Hot Trends for 2018
#1) We are at the Threshold of Change
Devices are becoming
significantly
more intelligent
and connected.

Source: IBM

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#2) The Way Data is Used is Changing
The way society uses data is going through a fundamental shift:
• From structured to unstructured
• From selective to abundant
• From retrospective to here-and-now
• From business-focused to hyper-personal
• From life-enhancing to life-critical
• As computing power becomes increasingly distributed, moving to the cloud
and into everyday IoT devices and infrastructure that surround us, data will
increasingly drive fundamental improvements to businesses, industries, and
our everyday lives
• Three-quarters of the world’s population will soon be connected

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#3) Annual Size of the Global Data Sphere

• Trends in #2 are causing the total amount of all data on the planet,
the global data sphere, to grow exponentially

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#4) Quantum Computing Accelerates

• Quantum computing dramatically accelerates the artificial intelligence (AI)

race, by applying machine calculations that can - theoretically – be up
to 100 million times as fast as today’s machines
• AI is already being applied to healthcare, finance and even cooking, to
explore new solutions in cognitive computing
• AI can sort through and assess information that humans may have missed
or never considered. This type of work is already leading to new
treatments, products, services, and yes, recipes
• Blending AI with Blockchain/DLT is just one area for
added experimentation
• Also, machine learning will yield innovation in pattern
recognition, predictive
analysis and even new ways to compute and solve problems
• More immediately though, breakthroughs in programming will
eventually iterate and innovate existing engineering issues, air traffic control,
curing diseases, reducing insurance risk pools, etc.
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#5) Digitization of the Supply Chain
• Digitalization of the supply chain
and its end-to-end integration
Becoming increasingly
dynamic and transparent

• Access to customer demand

needs to be shared
effectively

• Product and service deliveries

must be tracked to provide
visibility in the supply chain
• Cloud integration can be
expected to offer a cost- Source: Proceedings of the 50th Hawaii International Conference on System
Sciences | 2017
effective business model for
interoperable digital supply
chains

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#6) Blockchain/DLT Proliferation –
Continued Growth of Blockchain/DLT
Consortiums
• Hyperledger • Accounting Consortium
• Ethereum
• B3i
• BlockRx Project
• R3 • Blockchain Study Group
• • CULedger
Post-Trade Distributed Ledger Group (PTDL)
• ChinaLedger Alliance
• Blockchain Alliance • Digital Asset Holdings
• Kynetix
• Dutch Logistics Group
• FCA Sandbox Project
• • Financial Blockchain
Paris & London-based Agentic

• • Shenzhen Consortium
Dubai's Global Blockchain Council (GBC)
• Fundchain
• Domus Tower • Global Blockchain Council
• • Hashed Health
China's ChinaLedger Union
• Hyperledger Healthcare Working Group
• China's Shezhen • ISITC Blockchain Working Group
• Russia's BitRuble
• ISO/TC 307
• Kinakuta
• French - 7-member Project Jasper

• Overstock.com
3-member: BAML, HSBC and IDA of Singapore

• Big Four:Note: Because

Deloitte, the and
E&Y, KPMG industry
PwC is moving very quickly, this is not be an inclusive list.

• There are many other consortiums and many more are expected to be formed in
Japanese Banks
2018.
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And, Watch for Coalitions to Form
In February 2017, a coalition of global corporations spanning across diverse
industries (including financial, technology, and oil and gas sectors) was
created to productize an enterprise-grade Ethereum Blockchain. It is known as
the Enterprise Ethereum Alliance.

https://blog.chronicled.com/eachronicled-launches-quorum-blockchain-integration-at-enterprise-ethereum-alliance-kickoff-e8283eb15c1e

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#7) Blockchain Will Be a Very Hot Tech Investment
Blockchain will be a very hot tech investing trend, maybe the hottest
tech investment trend, of 2018.
• Working towards IPOs, startups will continue to mature their
technologies and companies next year
• 2018 and 2019 will see the rise of a whole new generation of successful
small-cap and mid-cap technology companies
• It pays to understand Blockchain stocks, because they could do very
well

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Acceleration of Blockchain Technology Startups

https://venturescannerinsights.wordpress.com/tag/tech/

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Placing Bets on:
Infrastructure and Trust for Blockchain
Technology
Innovation quadrant for blockchain technology
ESTABLISHED Infrastructure HEAVYWEGHTS Trust

News/Data

Gambling

Financial Services Pay Mining

Exchanges m Wallets

Big data ents

Services
Average Age

PIONEERS

D Blockch
I ain
S Innovations
R
U
P
Average Funding T
O
R
S
These quadrants show a relative segmentation of the categories with respect to one another, data cumulative as of August 2017.

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Investment Shift: Towards Blockchain Innovations

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Global View: Blockchain Technology Startups

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#8) Initial Coin Offerings (ICOs)
The price of new cryptocurrencies like Ethereum has seen a continuous
rise.
• When it comes to Initial Coin Offerings (ICOs), caution should be taken as
there is often a high risk associated with them and a lack of legal frameworks
(think of property rights)

Given the anticipated growth of Blockchain in 2018, it is important to

identify the companies and technologies that have intrinsic value,
because after a period of proliferation, an industry “shake-out” is
expected.
• Intrinsic value refers to products and services that are used in real life, that
solve real life problems, that have good demand among one or several
customer segments, and that show growth in terms of usage

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#9) Watch for “Smart Networks” to Form
100-year timeline suggested by Melanie Swan, noted author of
“Blockchain”
• In the future, “Smart Networks” will allow for more complexity through
the “Internet pipes”

Economics Governance

Applications Transfer of value, Confirmation of Distribution of Creation of

allow transfer identity, Registration of Preference
of (voting)
Smart
Smart
Information Cash Smart Assets Worker / Smart Entities
Contracts
Resources

Simple networks Smart Networks

1990 2017 2025e 2050e 2075e 2090e

https://www.slideshare.net/lablogga/state-of-blockchain-2017-smartnetworks-and-the-blockchain-economy

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#10) Data Privacy and Confidentiality
• One of Blockchain’s main assets is its transparency, though for many firms this raises
questions about privacy protection, data privacy and confidentiality
• To resolve this issue, it is important to draw on the distinctions among:
1. Private / Permissioned
2. Public
• The solution for the first is simple: Control and regulate accessibility by issuing unique
access keys to users of the information and restricting or enabling their roles
accordingly
• In contrast, Public Blockchains could solve this by using one-way homomorphic
encryption. This means that transactions would still be recorded in the ledger, but only
authorized personnel would be able to decrypt the details. Therefore, the public ledger
continues to balance without compromising a company’s privacy
• This is crucial because companies would not have to expose sensitive
information that could thwart their competitive advantage, yet auditors and regulators
would still have easy access to important information

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#11) Security Innovations and Digital Identity
• Security is a parallel thread to Service:
• Changes to services offered will continue to force changes to security
• Some of those changes are invisible to customers (such as data encryption), and
are likely to improve gradually

The visible security features (logon and

passwords) are set to change markedly
in late 2017 and into 2018 with
continued rollout of biometric
identification and improved digital
identity technologies
This may lead to the end of password
usage in the future

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#12) Blockchain Scalability:
Improvements on the Horizon
• Blockchain scalability is a concern for many
• It is necessary to reiterate, however, that scalability is more of an issue for
the public Blockchain, rather than private and permissioned versions
• With enterprise-grade distributed ledgers and private inter-organizational
Blockchains, fewer nodes are involved, thus reducing the computational intensity
needed to validate transactions
• Storage space is also of no concern given that the current bitcoin Blockchain
takes up about 118GB of disk space to download
• The current bitcoin Blockchain grows at about 1 megabyte per hour
• However, if say for example, Visa, were to start using Blockchain to
process its 2000 transactions per second, growth would increase to 1
gigabyte per hour
• This is the equivalent of 8TB per year
• Consider other large organizations moving to Blockchain and an
obvious scalability issue emerges
• Add to this: Where will the data be stored? What will it cost?

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#13) Interoperability & Industry Standards Setting
• Ready-to-use, industry endorsed, technical standards for use in the
market will enhance the proliferation of Blockchain technology

• Standards will assist with interoperability and ensure a baseline

of commonality as new networks flourish

• Associations like the Muskoka Group, BAFT, the ICC and the Enterprise
Ethereum Alliance have initiatives already underway to address
ambiguities

• An ISO Committee has been formed to consider standards for

reference architecture, taxonomy and ontology, use cases, security and
privacy, identity and smart contracts

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#14) Regulators and Regulation
• As Blockchain outgrows its
infancy stage, regulations
attempting to solve
problems such as privacy
and scalability will continue
to emerge
• It is safe to say that with
the prominent number of
early adopters and state
governments (like
Delaware and the UAE)
pioneering the way in
Blockchain integration,
there will definitely be a
future for the technology

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#15) Support for FinTech Firms
Politics and Legislation Supporting FinTech Firms
It is hard to foresee how politics will be swayed and how political and
corporate agendas will influence the scope of Blockchain integration
Already, there is emerging legislation that would give more power to
financial technology (FinTech) firms
• Revised Payment Service Directive (PSD2), expected to be enacted in 2018 by the
EU, removes the banking sector’s monopoly in providing payment services and
managing client account information
• Gives more freedom to the consumer by allowing them to reach out to other third-
party FinTech providers, but creates an obvious threat to banks
• With AISPs (Account Information Service Providers) and PISPs (Payment Initiation
Service Providers), peer-to-peer transactions will become more common in the
future
• Consequently, banks are expected to resultantly lose 9% of revenues from retail
payments by 2020 alone

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#16) Triple-Entry Accounting is Embraced
Blockchain’s applications extend to even
greater uses in internal accounting
management, with the most obvious change
involving a shift from double-entry accounting
to a triple-entry accounting systems. Double-
entry requires a party to log a debit and a
credit in the company’s books; Blockchain has
the seller/service provider log a debit and the
purchaser log a credit

• This creates a movement away from third-party trust to a new algorithmic trust,
whereby a self-auditing third entry is cryptographically secured by the
Blockchain platform. Thus, Blockchain becomes a congruent and perfectly matched
record of transactions
• One well-known start-ups for creating this triple-entry is Balanc3
• Blockchain ensures faithful representation and minimizes any room for biased
professional judgment by accountants because it adds an additional real-time
dimension in which to track entries

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#17) New Job Roles Emerge
Blockchain can have profound effects on long-term job creation
• Despite the fact that many roles will be made obsolete by the technology,
jobs requiring the human element, such as performance improvement, IT risk,
data analysis and other advisory roles, will grow in demand
• In 2018, it will be important for firms to be adaptive and proactive in
responding to these changes in market conditions
• Most incumbent firms have acknowledged the disruptive capabilities of
Blockchain technology and are searching accordingly to turn any potential
threats into opportunities
• In a 2016 report by EY, the company’s Global Technology Sector Leader in
Tax Services, Channing Flynn, gave the example of a “taxologist”,
potentially a future role that works alongside governments to ensure that
public authorities properly account for and collect taxpayer money that is
due

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#18) Rise of Private Networks
• In finance, private networks look to
leverage Blockchain/DLT in order
to make the transferring of financial
instruments and assets much more
efficient

• Short-term: Blockchain will

streamline back-office accounting
through triple-entries and smart
contracts

• Long-term: Asset exchanges,

global remittance networks, and
foreign exchanges could all be
moved to Blockchain/DLT
through peer-to-peer lending

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Tactical and Practical
Guidance
Monitoring Trends/Developments and Key Takeaways
The Hype Cycle
The promise of Blockchain/DLT is no longer
remote.

www.gartner,com/SmarterWithGartner

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Key Takeaways
As witnessed through Blockchain/DLT initiatives by first movers:

• Widespread Usage: The technology can be applied to every industry

to better meet client needs
• An Exciting Time: A greater understanding is rapidly developing for the
potential applications of the technology to overcome the plights and pitfalls
of current transactional and management systems
• Embrace Change: In the years to come, for example, triple-entry
accounting, smart contracts, and automated taxation are just a few of the
ways Blockchain can streamline processes
• Monitor Trends: While the technology has the potential to reshape
entire markets as a whole, there are still notable legal, social and political
barriers impeding Blockchain’s proliferation
Though no one can predict the magnitude of Blockchain’s growth, one thing is for
certain: Processes along the entire supply chain will be dramatically
redefined

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 Q&
A

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Contact Page

Nancy
Amert
Partner
Director of
Consulting
Finance and Banking
Practice Direct +1 (704) 492-
3697
Mobile +1 (704) 412-0674
nancy.amert@cgi.com

CGI.com

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 Our commitment to you
We approach every engagement with
one objective in mind: to help clients
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Bonus Material
Singularity Hub – Quantum Computing article
https://singularityhub.com/2017/11/05/is-quantum-computing-an-existential-threat-to-
blockchain-technology/

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Blockchain vs. Distributed Ledger: Clarified
• Blockchain – Blockchain is a particular architecture of a Distributed Ledger whereby data are
batched into a sequence of blocks linked to each other using cryptographic tools and forming
a perpetual chain of immutable records

• DLT – “Distributed Ledger” is a common reference to a bundle of technologies, usually

understood as a decentralized dataset architecture which allows the keeping and sharing of
records in a synchronized way, while utilizing consensus-based validation protocols and
cryptographic signatures for integrity purposes

http://www.bankofengland.co.uk/research/Documents/workingpapers/2017/swp670.pd
f
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Public and Private Ledgers
• Public Ledgers: open to anyone, “permissionless”; identity is often
considered to be “unknown,” for individuals; examples: Bitcoin, zcash, Open
Access
• Private Ledgers: approved users are “permissioned”; identity is known and
is often used for corporations; approved credentials, controlled access;
examples: R3’s Corda, Hyperledger
Public Ledgers Private Ledgers

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Recent Statistics
• According the World Economic Forum, 10% of global GDP could be stored on Blockchain
by 2025
https://www.coindesk.com/world-economic-forum-governments-blockchain/

• A report titled 'Blockchain Distributed Ledger Market by Type and End User: Global Opportunity
Analysis and Industry Forecast, 2017-2023,' noted that the Global Blockchain Distributed
Ledger Market accounted for $228 million in 2016, and this figure is expected to jump to
$5.43 billion by 2023, which is a compound annual growth rate of 57.6% from 2017 to 2023
https://www.atmmarketplace.com/news/global-blockchain-market-to-grow-from-228m-to-54b-within-6-years-study-predicts/

• Research and Markets released a report in March 2017 predicting that Blockchain
technology will be used by up to 65% of enterprises by 2020
https://www.prnewswire.com/news-releases/blockchain-technology-and-solutions-market-outlook-and-forecasts-2017---2022-
300419751.html

• Likewise, an IBM study that surveyed 200 financial market institutions, revealed that 14%
of respondents would like to implement scalable and commercialized solutions by
2017
https://www-03.ibm.com/press/us/en/pressrelease/50617.wss

• Last January, the DTCC announced that it plans to move $11Trillion worth of derivatives
to Blockchain and both the NASDAQ and the ASX have been working on launching their own
Blockchains
https://www.coindesk.com/11-trillion-bet-dtcc-clear-derivatives-blockchain-tech/

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