DISTRIBUTED LEDGER TECHNOLOGY
Transaction books have been around for thousands of years. While accounting has evolved continuously and has become increasingly efficient through innovations such as double-entry accounting, the general concept of central transaction books has never been fundamentally questioned. In 2009, the “double spending problem” was solved for the first time without a central instance by the Bitcoin protocol, using modern cryptography and game theory mechanisms. Almost ten years later, the disruptive potential of the technology in terms of disintermediation and new opportunities in process optimisation and standardisation is recognized across industries. The following terms are relevant in this context:
Counter concept to traditional, centralised databases. The database is distributed across the network among its participants, who also manage it. Changes to a data set can be made by several to all participants, as long as there is consensus about the data change.
Part of the Distributed Ledger Technology with the special feature that the entire database is available to all participants in the network in the form of chained transactions. This does lead to maximum transparency, but can also be impractical.
Computer programs and protocols with the aim of technically mapping and checking contractual regulations. The most important feature here is the high degree of automation and the proactive and automatic negotiation and execution of contracts. Typical examples of smart contracts are insurance policies with automatic payment to the policyholder in the event of a claim.
Refers to the problem that money or values in a system may not be spent twice in order to maintain monetary stability. In traditional economic systems, this is solved by the use of central banks and commercial banks by granting “trust in advance”.
When dealing with the technology, we do not want to be guided by either hype or scepticism caused by unchecked prejudices. We therefore attach great importance to testing the suitability of the technology on a case-by-case basis and to developing sustainable, meaningful use cases together with our customers, which also allows them to engage with the technology at an early stage. In doing so, we also support this process by selecting and introducing suitable platforms.
In order to evaluate the suitability of the technology for a specific use case, we have developed a decision-making model for our customers based on existing studies and models. On the basis of a few questions, a recommendation for action regarding the use of the technology can normally be given quickly. Therefore, non-consideration of DLT for the ongoing solution selection process can be just as much a result as the specific recommendation of a DLT-based system architecture. The goal of the decision-making model is always (based on the customer’s objectives) to develop sustainable and meaningful solutions without unnecessary effort.
Conventional sprint formats, such as the “traditional” design sprint, are effective for developing product and service designs. However, for complex ecosystems and areas of application geared towards DLT, the concept has to be extended. We have therefore developed a special approach, which takes into account the characteristics of DLT and the requirements of ecosystem solutions.
In six to eight weeks, we identify a relevant problem together with the customer and develop a solution concept that satisfies critical user needs and identifies potential in the company or on the market. Based on the solution concept, we then develop a suitable system architecture and implement it in a technical prototype, which is subsequently tested and validated according to key hypotheses.
Part of the entire process can also be advice on suitable and scalable technologies and platforms as well as the scouting for complementary start-ups and consortia for cooperation. Furthermore, right from the start there is a permanent transfer of knowledge to the customer, which we achieve through various thematic presentations and invited experts, but also through self-developed canvasses and our own DLT board game. This allows DLT newcomers to understand the basics and implications of the technology and to contribute profitably to the work phases.
In follow-up or intermediate workshops, we also deal with other important points such as the development of suitable crypto-economic and game-theory mechanisms, in order to incentivise all stakeholders and encourage the development of governance structures.
In all of this, we are constantly dealing with a wide variety of use cases and evaluating various different platforms and DLT approaches. We actively develop DLT prototypes ourselves together with our partners and network with other exciting technology companies and start-ups in this lively, up-and-coming arena. After all, we are convinced: blockchain is a team sport!