"Not all companies necessarily need blockchain technology"

Blockchain is the subject of much discussion, and not just in specialist circles. More and more companies are looking into the digital technology and working on initial applications. For experts, blockchain technology has a similar revolutionary potential as the Internet. But what exactly is blockchain? What does a company have to pay attention to when implementing a blockchain application and how does financing via Initial Coin Offering (ICO) work? These and other questions were the focus of the Blockchain for Business (B4B) forum held last Thursday, November 22, in St. Gallen. Speakers from science and practice told the more than 100 participants about their experiences with the promising "technology of the future" and gave tips for a possible implementation. The moderator was TV journalist Reto Brennwald, and the event was organized by the Institute for Corporate Management at the University of Applied Sciences St.Gallen IFU-FHS.

Properties can create trust

"Blockchain can be described as a distributed transaction database," said Professor Ernesto Turnes, director of the FHS Center of Excellence for Banking and Finance, in his opening remarks. He identified availability, ownership, immutability, auditability and scalability as the five requirements for a transaction system. Trust can be established via these requirements and how they are achieved, such as through cryptography or hashing, he said. With regard to tokens, i.e. the tokens that are sold in ICOs, Ernesto Turnes sees "enormous potential" above all in investment tokens or asset or security tokens. They represent assets such as shares, bonds or real estate.

Roger Bigger, co-founder of Crowdli AG, a platform for real estate crowd investments, and managing owner of Azemos Group, shared the same opinion. "Security tokens can fundamentally revolutionize the fund world," he said. "They create entirely new concepts of investing: improved participation, greater flexibility and lower costs." But, he added, they are also much more complex to understand. And this is where Roger Bigger sees the big challenge: "Explaining this to a broad audience is difficult."

Attorney Thomas Müller of Walder Wyss Attorneys at Law in Zurich classified the legal qualification of the tokens, which is quite complex and somewhat different depending on the token. He described the secondary market as a major problem: Some of the tokens could only be used to a limited extent and the National Bank currently has "zero interest" in a digital franc.

Optimize processes, save costs

The n'cloud.swiss AG, a provider of cloud computing solutions, relied on blockchain at the beginning of 2018 and carried out an ICO. The next ICO is to follow as early as next year... According to Chief Marketing Officer Pascal Dossenbach, blockchain is suitable for "those companies that want to offer a product or service for which there is also a market". For him, it is important to have "serious planning with realistic goals" and an "ICO whitepaper that comes across like a business plan to convince investors".

For Pascal Egloff, lecturer and project manager at the FHS Competence Center for Banking and Finance, "needs not every company has to have a blockchain, it has been possible without one". But almost every company could use the technology. "The only question is whether it's worth it," he said. Blockchain often serves as a catalyst for thinking about digitalization, he said. Ulrich Schimpel, CTO Europe Team & IBM Research, Zurich, has a similar view: the blockchain solution only brings something where it is better than the existing process. However, if the new technology is then applied, processes can be optimized and costs saved. Today, blockchain is not only used in banking, but also in healthcare, insurance, logistics and sales.

An underestimated technology

Vitus Ammann spent years in Zug's Crypto Valley and is now a Digital Transformation consultant at SBB. In the expert panel, he said, "We are still at the very beginning with blockchain technology, about where we were with the Internet in 1995." He has high hopes for the technology, with comparable effects on the economy and society as with the Internet. Nick Beglinger, CEO of Cleantech21 Foundation, and Roman Schnider, Head of Audit Blockchain Clients at PwC Switzerland, have a similar view. "Blockchain is still greatly underestimated today," said Nick Beglinger, and Vitus Ammann believes that in ten years, securities will already be largely traded via tokens and no longer via the existing systems. Will banks still exist at all then? "I think so," said Roman Schnider, "but their remit is likely to shift." For Stefan Jeker, head of Raiffeisen St.Gallen's innovation lab, one of the big challenges of the future is to think in ecosystems and beyond processes. "Blockchain technology will change our lives, allowing us to focus on what makes our lives worth living."

www.fhsg.ch

More information:
With all the developments surrounding blockchain, it is difficult to keep track of everything. That's why Ernesto Turnes and Pascal Egloff from the Institute of Corporate Management IFU-FHS have written a textbook entitled "Blockchain for Practice. Cryptocurrencies, Smart Contracts, ICOs and Tokens." At the same time, they offer customized presentations as well as company-specific workshops and have organized the Blockchain for Business (B4B) forum.