- smart cities
- Smart Grid
Three Countries Fighting to Drive the Future of Blockchain
Estimations of blockchain technology's growth potential rise and fall with the news cycle. In 2015, the World Economic Forum famously projected that 10% of the world's gross domestic product would be stored in a blockchain by 2023. The crash in digital currency markets in 2017 caused more recent estimates to push this date back to 2027, and the true date, if it happens at all, is likely much further down the road.
Despite all the uncertainties surrounding the blockchain market, one thing is clear: the international community smells an opportunity, and they want a share of whatever business distributed ledger technologies will generate. At a time when many businesses are hesitant to jump on the blockchain bandwagon, several city and national governments are jostling for position as the future home of blockchain innovation. This blog takes a look at three.
The United Arab Emirates: Smart Dubai
Dubai has one of the most widely known and ambitious smart city plans in the world, and blockchain is a major part of the city's vision. Smart Dubai includes more than 100 initiatives to accelerate innovation and smart city solutions. Dubai intends to be the world’s first blockchain-powered city by 2020, transitioning 100% of applicable government services to a blockchain architecture. Dubai estimates that embracing blockchain could save 114 metric tons of CO2 emissions and gain 25.2 million person hours of economic productivity from process improvements.
In partnership with Educhain and Dubai Blockchain Center, the city developed a guide to blockchain project implementation to connect innovators with resources and integrate blockchain innovation into municipal processes early on. More than a dozen blockchain use cases are being tested in the city. ConsenSys, IBM, and Quantstamp have been attracted to the opportunities in Dubai, and more companies will likely come.
Estonia: Government Services and the Power Sector
Estonia became the first nation in the world to fully implement blockchain technology when it rebuilt its digital governance infrastructure following the Russian cyber attacks of 2007. The country has continued to explore and pioneer new applications for blockchain technology in government services, from voting and identification to title management, and this openess has attracted business. At least three energy blockchain vendors are headquartered in Estonia.
In 2018, Estonia partnered with energy blockchain vendor WePower and transmission system operator Elering to tokenize the country's entire grid system. WePower's platform certified every kilowatt-hour of power produced over the course of a year (24 TWh in total) and issued 39 billion tradeable digital certificates proportionally.
India: Policy Incentives in Telangana
India is the most recent country to court blockchain talent. In Telangana, the state government announced a policy package that provides blockchain vendors with a 25% subsidy on lease rentals, 50% subsidies for exhibitions, reimbursements for conference travel and local taxes, plus competitive seed grants. Telangana imagines a blockchain district that will physically centralize blockchain businesses and talent within the city of Hyderabad.
Where Will the Value Come From?
As I’ve written before, cities, states, and countries are sorely mistaken if they think that the majority of the wealth generated by blockchain technology will come from digital currencies like Bitcoin. As the previous examples illustrate, the true value of blockchain is in the applications and services that a well-designed architecture can support. In the short-term, much of this value will come from streamlining existing business processes such as billing, settlement, and regulatory compliance.
These three countries are betting on the success of these initiatives and the emergence of new business models and revenue streams. They may well succeed in drawing talent away from Germany, Switzerland, and the other leaders in blockchain development, beginning the process of reshaping the global blockchain landscape.