Can blockchains play nice with legacy tech?

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Blockchains and other distributed ledgers are being applied to almost all businesses as a concept, but have had a tough time in ecosystems built on siloed data and complex technology.

The successful implementations will not try to replace older systems, but instead complement them, says Brian Behlendorf, the executive director of Hyperledger.

"There's a lot of great ideas out there about how these things should be built," said Behlendorf during the TechCrunch Disrupt San Francisco event. "We need to be building on top of the plumbing."

Hyperledger is a cross-industry collaboration to advance blockchain. Its members include American Express, JPMorgan Chase, IBM, Accenture and companies outside of technology and financial services such as Airbus and Daimler. American Express is contributing data and digital payments expertise to Hyperledger. American Express has also used its membership in Hyperledger to support incentive marketing development.

Collaboration on the terms and structure of blockchain can ease confusion, Behlendorf said, adding Hyperledger's membership includes both large legacy companies and startups.

"If we can work together and collaborate on enough of these building blocks, we can focus more on what's on top than on the plumbing," Behlendorf said.

Blockchain investment is growing rapidly. The technology has shown promise in reducing payment processing expense, but blockchain has also become a brand as much as a technology, muddling its meaning.

"There's so much learning going on right now, you can't build these things without a community," said Jutta Steiner, co-founder and CEO of Parity Technologies, at the Disrupt event.

The London-based Parity builds cryptocurrency wallets. In the past, Steiner has suggested the future of blockchain involves more collaboration, or many blockchains working together to simplify standards and terms. "We need a better infrastructure that is fundamentally different to show how things can work," she said at the Disrupt event.

The lack of clarity for blockchain can cause confusion among merchants and consumers, since both the meaning of blockchain and the number of blockchains simultaneously proliferate. That ambiguity holds up cryptocurrency payment projects and other transaction automation.

"It's missing a brain. Right now it's just for nerds," Kelghe D'Cruz, CEO of AiBB, a Toronto-based startup that's selling what it called AI-assisted crypto, said in an interview in Disrupt San Francisco's exhibition hall for startups.

AiBB uses blockchain to support trades, voice-assisted financial services, Know Your Customer anti-money laundering, and identity authentication. AI also supports AiBB's mobile wallet and Ai Pay, the company's mobile payment feature that supports NFC cryptocurrency payments.

AiBB hopes to make it easier for merchants and consumers to use distributed ledgers such as blockchain, contending the technology is still too complex. "We're probably about two or three years away from blockchain or DLT being really mainstream," D'Cruz said.

Usability is also an issue for Button, a multicurrency digital wallet company based in Cambridge, Mass.

Button wants to ease access to crypto services for users on the Telegram platform. That could include payments, trades, personal digital finance and other users. "It has to be simple and user friendly," Button co-founder Nikita Kozlov said in an interview in the exhibition hall.

For the business payments market, the best path forward is to make blockchain deployments more about economic benefits, steering the conversation away from the technology, Gert Sylvest, co-founder of Tradeshift, said during Disrupt.

"You need a lot of different actors to come together. The blockchain can connect them to a settlement of value. That's an economic question," Sylvest said, adding there should be significant volume of transactions moving through Tradeshift's blockchain within a year.

In addition to its membership in Hyperledger, American Express is also an investor in Tradeshift, which was founded in Copenhagen and based in San Francisco. Tradeshift's a gateway to speed business payments to contractors, freelancers and other sharing economy transactions.

"Companies today are hoarding data in silos and are exchanging very narrow pieces of message, the economic impact on digitizing that and creating liquidity is enormous," Sylvest said.

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Blockchain Internet of things Cryptocurrencies Payment processing
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