Tremendous innovation in Blockchain/ DLT
Blockchain evolution—from a primal description of Bitcoin in a 2008 white paper to the emerging enterprise version of DLT of today, with its built-in consistency, security and privacy—has been nothing less than dramatic. Early believers in DLT saw it as way to conduct transactions without banks or financial institutions, but the need for sound, controlled markets has overwhelmed that initial view. It has significant potential to simplify our complex world of opaque siloes of information, including the ability to encode policies, rules, and business logic within the software and mathematical rules of the platform. However, it’s long-term potential hinges on effective governance to guide the growth of DLT, to meet the highest requirements of the regulated industries, and to bring a risk management perspective to migrating critical processes onto the technology as it becomes ready.
The original Bitcoin blockchain innovation was based on a public, permissionless network of untrusted parties. Yet for most industries, particularly financial services, the business rules, performance and scale requirements and most importantly regulatory rules and policies, do not align with the public and permissionless model. This drove an evolution of the original innovation resulting in the creation of “permissioned” DLT networks—private communities with well-defined controls and known members and membership criteria.
Network Governance Model: