Bitcoin is the poster boy of emerging cryptocurrencies, a trailblazer in a brave new world of digital transactions. Most recently it hit the news when volatility in prices saw it momentarily surge above a value of RM80,000 for just one ‘coin’. But isn’t it all just make-believe money?
In our previous article, we explored the difference between blockchain and Bitcoin. In this article, Energy Watch reached out to Ruben Tan, Chief Technology Officer at Neuroware, to explore the reality behind digital dollar signs, data, and energy delivery in Malaysia.
EW: You’ve been an active advocate of blockchain technology here in Malaysia. In your opinion, do you think Malaysia has a healthy landscape for its application and growth?
RT: It is too early to tell. The Malaysian tech scene is largely focused on consumer applications, with a very small pool of developers given the chance to move away from building features to dealing with advanced algorithms and complex systems. In this regard, the talent pool available for serious blockchain application development is practically non-existent. Additionally, very few investors and venture capitalists have the appetite to invest into highly technical ventures which blockchains are by nature, and thus there’s far lesser traction in Malaysia compared to its neighbours.
On the demand side however, we’re seeing a lot of enquiries from large enterprises, all of the same nature: how do we leverage blockchain technology in our businesses. There’s a noticeable (and massive) gap between the supply (companies offering blockchain services and solutions) and demand (enterprises looking for blockchain services and solutions), and this is something that is not likely to change in the near future.
EW: Where do you see blockchain technology playing a part in the energy industry?
RT: Blockchain technologies generally shine when you want to build an infrastructure to allow independent entities that cannot trust each other implicitly to collaborate and work together without the need for human intervention. This has been proven to work for peer-to-peer payments; how can we make this work for the energy industry?
Microgrids for example, allow individuals to have the capacity to generate their own power, and provide an infrastructure to perform net metering for these individuals. This can be done using blockchain technology, and in fact, this is already a thing in Boston. With green energy gaining traction over traditional power generation methods, and the pricing of these generation methods becoming more accessible to individual households, the energy industry ought to look at how they can provide and enable microgrid ecosystems instead of letting somebody else do that and end up disrupting the businesses of these energy industry incumbents.
Alternatively, blockchains are also immutable by nature: this is to say, anything stored inside blockchains can never be changed. This can be leveraged by large corporations to perform data integrity checks, and this can be useful when dealing with complex supply chains, which oil & gas (O&G) companies frequently have to rely upon.
Finally, smart contracts can also be used to automate and streamline business processes. For instance, a company offering flight services for an offshore platform can incorporate smart contracts to track their flight times on the blockchain, so that when the O&G company that owns the platform wishes to audit or perform accounting for the flight hours, they can do so directly from the blockchain instead of having to trust in the records kept by the flight operators’ own data centres. Things like this can make life significantly easier for all parties involved.
EW: What can you share from your experience working in this industry? Any key lessons or learnings that leaders should take?
RT: From our engagements with institutions such as Bank Negara Malaysia, Tenaga Nasional Berhad (TNB), MOSTI, Securities Commission, Maybank, RHB, and such, we realised that blockchain technologies are often misrepresented or misunderstood, usually by non-technical blockchain evangelists. What’s worse, most enterprises quickly learn that blockchain technology is often not compatible with their 30-year old infrastructure, and that there are many steps they need to take in the interim before their business or tech infrastructure is ready.
However, that does not mean that businesses should dismiss this technology. In the past decade the average company lifespan on the S&P 500 index had dropped from 60 years in the 1960s to 20 years in the present day. This means innovation and disruption are happening on a much faster cycle, and incumbents are often shifted from their dominant positions easily. The mindset that industry players should adopt is that instead of agonising about the ROI of innovation, they must ask themselves the right question: do we want to wait for somebody else to disrupt our business, or do we want to do the disruption ourselves to maintain our lead in the industry?
Blockchain technologies offer incumbents the opportunity to create entire ecosystems and new markets if done right. The good (and dangerous) thing about this is that anybody can kickstart this new ecosystem, and if the industry leaders refuse to budge or get tied down by bureaucratic red tape, then it is inevitable that when these new ecosystems grow the incumbents will find themselves fighting a future they have no control over.