Few national economic forums held in recent times have matched the star power that an event seemingly as sedate as the Oman Blockchain Symposium garnered on its opening day on Monday. From members of the Royal Family and heavyweights of the political establishment to leading lights of academia, technology and innovation, the inaugural session held at the Sheraton Oman Hotel featured a stellar array of personalities. Their presence attested to the national weightage being given to the issue of blockchain — a topic that until recently barely registered on the radar screens of most professionals in the Sultanate.
But blockchain is no ordinary commodity, say experts, who swear by its transformational potential particularly in its ability to usher in a digital economy. Blockchain technology originated with the development of the Bitcoin, the digital currency whose value soared to a record high of $7500 per unit just last week. The aggregate value of cryptocurrencies — numbering over 1,000 different types of digital currencies and counting — grew to a staggering $200 billion last week, surpassing the market cap of scores of Wall Street giants.
It is this game-changing ability of blockchain that has caught the imagination of major corporations, banks, financial institutions, and even governments in harnessing its potential for business growth and economic development. According to leading global investment bank Goldman Sachs — among the first international institutions to embrace the technology – blockchain redefines the way how individuals, businesses, institutions, governments, and so on, interact or transact business or activities. “Blockchain has the potential to change the way we buy and sell, interact with government and verify the authenticity of everything from property titles to organic vegetables. It combines the openness of the internet with the security of cryptography to give everyone a faster, safer way to verify key information and establish trust.”
Simply explained, blockchain is a distributed ledger technology that underpins cryptocurrencies like bitcoin and platforms like Ethereum. The technology provides a way to record and transfer data that is transparent, safe, auditable, and resistant to outages. It has the ability to make the organisations that use it transparent, decentralized, efficient, and secure. In essence, blockchain is something of a breakthrough technology with the potential to disrupt many industries in the coming years.
Besides revolutionizing trade, blockchain also has the potential to support the creation of a new value-added economy (blockchains), which could also significantly change operating structures in most sectors of the economy. Crypto-currencies and the economy of the blockchains would then become the basis of a new economic system. More importantly, this would also integrate the new technologies of: Artificial intelligence, Machine learning, Augmented reality, The Internet of Things, and Autonomous learning.
The Omani government’s pivotal role in the organization of the 4-day Oman Blockchain Symposium, currently into its third day, signals a robust commitment to enabling the rollout and adoption of this revolutionary technology in the Sultanate. Nearly a dozen Omani ministries, government departments and institutions worked behind the scenes for the better part of a year to pull off this maiden forum on blockchain. Delivering the keynote address was Daniel Haudenschild, CEO of Swisscom Blockchain Ltd, a subsidiary of telecom major Swisscom. “Blockchain is having an absolutely disruptive effect on every industry you can imagine. The more you study and understand blockchain, the more you see that it has an ability to take companies — that had not changed their basic operating model since the 1960s — 70s — to dis-intermediate and disrupt them,” he said. The new technology, said the expert, can contribute most to the banking and financial services industry, driving efficiency, transparency and cost-reduction on a major scale. Citing an example to underscore the transformational power of blockchain, he said: “The global international payment remittance system — which costs $17 trillion a year – is unnecessary because blockchain can do it much better and faster, as it works trust-free.” Welcoming the Sultanate’s tentative steps towards blockchain adoption, Haudenschild however urged authorities to be suitably braced for challenges and pitfalls along the journey. He noted in this regard the resistance to change that champions of the technology encountered in his native Switzerland.
“If we don’t start to work on the industry behaviours — some of the habits to get us out of our comfort zone — then we will ultimately leave the door open for disruption for other places to dominate in the world,” he warned. Oman, according to the CEO, possesses all of the “right ingredients” that can be leveraged to chart a suitable roadmap for blockchain adoption in the Sultanate. “You have the 9th Five Year Plan kicking off; you have five thrust sectors — including logistics, manufacturing, and mining — where blockchain can play a significant role. And, as in Switzerland, we see here in Oman a willingness and necessity to change; We have an open political atmosphere and an open regulatory environment.”
However, for the roll-out of blockchain to succeed, certain “basics” must fall into place, Haudenschild pointed out. “Bitcoin and blockchain work on nodes; Nodes require the internet as the backbone, and you need to get high-speed internet across. Education and universities are going to be the key as well. You need to make sure that training and educational facilities are in place in order to get your businesses and your people up to speed,” he said.
One area that is ideally suited for blockchain introduction is the Sultanate’s “amazing” ports and logistics sector. “That’s a place we see the potential for adoption far greater than the financial sectors. Container shipping is a very fruitful ground to start. Oman also has the distinction of being one of the neutral countries in the region, and you have three free zones which can be leveraged to bring low tax entrepreneurialism into the country.”
But while the journey to blockchain development can be “exciting”, adopters should also be ready to “move out of their comfort zone, as well as move at speeds which you are probably not used”. “You have to get used to the change that comes with it,” he noted.
In this regard, he mooted the idea of pilot projects to help industry and professionals get the required understanding and experience with regard to blockchain technology. “Pilots lead to knowledge; knowledge leads to adoption — similar to how we embraced blockchain in Switzerland,” he said.
Seeking to hit the ground running in the adoption of blockchain, the Omani government has announced the launch of the nation’s first blockchain development company, as well as the creation of a ‘Blockchain Club’ for enthusiasts.