Are we heading into the teenage years of blockchain?

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In the second half of 2018, SITA launched the Aviation Blockchain Sandbox. Its mission: to answer some of the big questions around blockchain. Is it ready for production use? Is the industry ready to adopt? Is it worth the extra effort involved and, if so, which use cases make sense? Barry McLaughlin, lead architect, advanced technology office, SITA Lab, discusses some of the lessons learned

I’m just back from speaking at the inaugural ICAO Blockchain Aviation Summit hosted by General Civil Aviation Authority (GCAA) in Abu Dhabi: three days of presentations, discussions and networking on the theme of blockchain in our industry. With over 1,000 attendees and 50 speakers, it gives a good picture of the interest and momentum in blockchain within aviation right now.

It was good to see such a diverse group of participants collaborating in this promising area: from airlines and airports, industry bodies, governments and regulators, reps from ‘Big Four’ members (Ernst & Young and PwC) and various blockchain startups and thought-leaders. After such a major event as this it’s important to take stock of where things are going, the lessons learned and engage in that most dangerous of occupations: predicting the future!

Blockchain isn’t going away any time soon
Given the number of participants and breadth of the industry represented at the ICAO event, there is clearly more than just a passing interest in blockchain within aviation. The general feeling is that this technology is not going away, and questions are changing from ‘Do we use blockchain?’ to ‘How and where do we use it?’

This is something that is reflected in the interest in SITA’s Aviation Blockchain Sandbox – we’ve had more than 60 expressions of interest from all sectors, right across the industry. We’ve also been in touch with others doing their own research or partnering with one of the many startups and consultants in the ecosystem.

Focus on use cases that deliver value
As often happens when new technologies emerge, the early focus tends to be on the technology itself. For blockchain, most of the focus to-date has been on building proof of concepts (PoCs) that investigate different ledger protocols and evaluate security, performance and other standard IT metrics.

This is no surprise because before committing to any new technology, we need to do due diligence to make sure that it is fit for purpose and stable enough to deploy real-world applications. While the blockchain technology is not yet fully mature, it has come on a lot in the past year or so and many of the early concerns have been addressed.

My perception is that we are now undergoing a shift. We are moving from researching the technology itself to figuring out the potential business value of blockchain. The type of questions we are now asking are: What problem does this fix? What new opportunity does it open up? Can we quantify the value of blockchain vs a traditional solution?

We’re moving away from general technology investigation towards exploring particular uses where blockchain delivers the biggest hit. Broadly, these fit into three categories:

Simplify: Reducing time and effort in the way that we currently do things.

Collaborate: establishing the “single source of truth” for shared datasets to facilitate better decision making across the industry.

Prove: providing a trusted and transparent record of identity, qualification or activity.

A lot of research going on right now is diving into specific use cases to determine the value proposition in areas such as flight operations, maintenance repair and overhaul, cargo, etc.

Size and collaboration matter
A key point to mention for all these use cases is that there is a marked network effect in blockchain. Put simply, the more organizations that are collaborating on a single blockchain network, the greater the payoff will be for all participants.

Up to now, we have been largely focused on whether we can tackle a business problem with blockchain. This can be done with a fairly small representative sample of industry players.

However, if we want to prove that it is worth using blockchain, we need to scale up. For example, take SITA’s FlightChain which is all about sharing flight operations data. When there are only five participants contributing data then we have already proven that the technology works, but none of the participants will gain much value. If we expand the network so that there are 100 participants, we haven’t proven anything new from a technical standpoint, but we now have a single source of truth based on 100 contributors, which is something much more valuable.

Into the future…
I believe that when we look back, 2019 will be seen as the year when blockchain moved away from hype and speculation of initial coin offerings (ICOs) toward more practical implementations. This year, the PoCs will become less technology-driven and more business-focused. We will increasingly find that blockchain becomes a part of a broader solution rather than an end in itself.

There’s a lot of talk around combining hybrid solutions – traditional storage alongside distributed ledger or combining blockchain with IoT or AI. Along the way, things will get bumpy: debates over public versus private blockchain, protocol wars (Ethereum versus Fabric), who controls the network(s) etc.

We should not fear this, it’s just a sign that things are getting real… all part of growing up! Maybe we are heading into the teenage years for blockchain, exciting, challenging, but all worth it in the end.

Barry McLaughlin is an engineer with the SITA Lab, SITA’s strategic research and development arm. He has more than 20 years’ experience in software development, spanning a range of environments from startups to multinational organizations.

He has 10 years’ background within the aviation industry and has been with the SITA Lab since 2015. McLaughlin is currently focused on exploring the potential of blockchain/distributed ledger technologies.

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