One of the most interesting applications of the blockchain technology is in the oil and gas industry. It is so interesting, that Digital Asset Live Editor-in-Chief is currently doing his PhD research in tokenization of oil and gas. The interview below with Mihai Ivascu, M3 Holdings CEO, came relevant to this research. M3’s Modex has just announced the launch of its blockchain-based database platform for simplified blockchain deployment, which will be piloted by Dietsmann, a major oil and gas firm.
Q1: The oil and gas industry is only starting to explore the possibilities of blockchain, using this groundbreaking technology to streamline the supply chain, to ensure traceability, to tokenize mineral rights. What will Dietsmann do on Modex BCDB?
What can I say for sure, is that Dietsmann will use blockchain to enable their customers’ data anonymization. This data will be gathered in a blockchain database, encrypted with Dietsmann customers security keys, and general reports of interest for everyone will be performed on that data, only with the customers’ approval of data usage.
A1: Dietsmann customers will know exactly how their data will be included in the general reporting stats and they will provide temporary access only for some data required by a particular report, not all available data. Of course, the shared data will be used under the supervision of Dietsmann and only with their customers’ approval. So, we can easily say that this is the beginning of the new era for customers and their data.
Q2: Could Modex BCDB be used to issue blockchain-based assets, backed by real life assets? If yes, do you have plans to cooperate with particular custodians and traders of digital assets?
A2: Modex Blockchain Database extends the functionalities of a traditional database with blockchain features. You can build anything on this infrastructure, including asset tokenization…this is the magic of our product.
Cooperating with institutions which already do that implies a business model specific to the software which is using BCDB. We provide backend and blockchain infrastructure, but the business logic is created by software owners.
We, at Modex, are looking for possible integrations all the time, and – more than that – every custodian can implement our technology at any given time, with or without our support.
Q3: Peter Kutemann, President of Dietsmann, stated that Modex BCDB allows companies to deploy a private blockchain ‘in a matter of days’. How do you achieve this speedy deployment? Will it allow for customised solutions?
A3: Customization and speedy deployments are the main components of our solution. BCDB is a blockchain-based database platform, which means it can support existing software products and new products as well.
A new product does not require integration, the blockchain and the database components are available on the spot, and vendors can focus on software logic only. Existing software requires a change of connectors from existing/legacy database to BCDB.
This process can be very fast for small or well-defined modular software products and much longer for complex or less modular products.
Usually, this integration is done by the software creator, but based on specific scenarios, it can be done by our team as well, or at least with the support of our team.
Q4: Modex is a blockchain enablement platform. What kind of expertise your clients must have in order to use Modex?
A4: First of all, our clients must understand the benefits of blockchain. Secondly, they must understand our product’s functionalities in order to have a clear picture of the benefits they can gain by using our platform. From the tech point of view, to integrate BCDB is as easy as integrating any third party API.
For customers, the challenge is to understand the benefits for adoption, rather than tech teams to adopt the product.
Of course, our business and customer service departments are doing a great job in explaining to potential clients what blockchain is doing for their business.
Basically, we are talking about cost-cutting, time saving and cutting edge data security.
Q5: Modex started as a tool for developers to build DApps without learning blockchain-specific code. What DApps were built with Modex? Please share some success stories, but also what kind of challenges have your clients experienced with blockchain adoption?
A5: Actually, Modex started as a marketplace for ETH smart contracts and continued with a set of developer tools to support developers to create, test and sell smart contracts. As you already know, available smart contracts are published on the live server in our Marketplace.
The DApps templates were introduced a few months ago, and developers can use them within the IDE to create their own software products using ETH blockchain engine. It’s easy to understand that we do not keep track of what developers do at home with our tools and how many DApps they create. The current Marketplace facilitates ETH smart contract selling.
Q6: One of the most often cited challenges in blockchain adoption is the need for an organizational reform. What’s your advice for companies who want to benefit from the new opportunities that DLTs bring?
A6: From our experience with many customers, but also from what big consulting agencies like Deloitte or PwC identified on their research around the current challenges in streamlining their business processes using blockchain tech, there are some challenges around trust and collaboration.
One important advice: businesses need to work together on the project and share data. As some of the data in the blockchain could reveal business models or close partners, the stakeholders must trust the encryption and security built into the blockchain.
We see that the technology provides us with new possibilities, but it also requires a change in our mindset regarding sharing and collaboration.
The second advice: clients need to asses their legacy systems internally before thinking about implementing blockchain and they have to be certain that this technology is really useful for them. A product developed primarily for enterprise-based solutions, implementing Modex BCDB in inappropriate projects may not satisfy the clients’ expectations.
Therefore, an effective communication and assessment at the beginning of each collaboration will be the key to a successful implementation.
Q7: How do you envision the size and structure of the ‘Blockchain On Demand’ market for short (1-3 years), middle (3-5 years), and long term (5+ years)?
A7: We currently see a strong growth in the attitude towards the usage of blockchain-based applications. Decentralized forms of organization have moved from research to application, even among leading global corporations. This proves that decentralization is valuable not only to the financial and business industries, but across every business sector and process.
Blockchain provides the main solution to help businesses transition from a centralized model to a decentralized one. Trends regarding market desire for adopting blockchain, especially in fields like supply chain, logistics, legal, financial or government, show great interest from enterprises to adopt the technology and from start-ups to build blockchain-based products.
However, on the short term everything will still be about overcoming the insufficient blockchain literacy tipping point.
Only 0.1% of the 20 million software developers in the world know what blockchain code looks like.
Hourly payment for an adept blockchain developer varies from €35 to €180.
Based on our experience, it takes about 18 months to train a blockchain developer, so companies will spend up to €200,000 on each developer. Modex BCDB doesn’t require developers to learn something completely new as it looks similar to a regular database engine whose operating mechanisms are widely known by programmers.
BCDB allows developers to work on formats they already know, acting like an API or a traditional database connection. To further address this challenge, we’ve developed a comprehensive tool, Modex Academy, to help enterprises and developers understand what blockchain is and how it works, so they can broaden their tech horizon even further.
On the middle term, the market will be fully aware about the benefits of blockchain and they will search for suitable and efficient solutions.
Many software providers will try to develop such solutions and gain traction and market share.
In other words, there will be many blockchain on-demand solutions available on the market, but not all will prove their effectiveness over time or they won’t be so easy to implement in existing legacy structures.
Finally, in five years time, blockchain solutions will be broadly scalable and will eventually achieve mainstream adoption.