Post-Alliance Era: How Enterprises Can Embrace Web3 Architecture

Now that the initial hype surrounding blockchain adoption and the ensuing long blockchain “winter” has ended, it’s now blockchain “spring,” a time for businesses to reimagine how they deliver value. According to PwC, blockchain is expected to add $1.76 trillion to the global economy by 2030.

A significant portion of this growth is expected to come from business-to-business (B2B) implementations that will benefit most from the security, immutability, and simplification opportunities offered by blockchain-based transactions and relationships. In a process involving multiple partners, dozens (if not hundreds) of products, and the cumbersome bureaucracy of virtually every business process, it's hard to overstate the gains for the business, especially when you consider the emergence of more nimble competitors .

But while small and medium businesses (SMBs) are faster and more agile in adopting new technologies and products, enterprises are slow to adopt them. Sales cycles are long, there are more portals, and multiple internal stakeholders still have strong incentives to maintain the status quo.

enter the league

The rise of enterprise blockchain stems in part from the growing desire of business decision makers to join forces with others to develop and work on similar solutions. The hope is that more entities working together to develop and manage a proof of concept or pilot phase will make development more valuable. They put this into practice by joining large cooperatives or "old world" alliances. We are starting to see various designated blockchain consortiums being formed in specific industries such as RiskStream and B3i.

Existing industry alliances and governing bodies are also starting to create designated networks for their members, such as the attempt for the mobile domain within the Global System for Mobile Communications Association (GSMA). In 2019, 92% of executives in Deloitte’s Global Blockchain Survey said they had joined or planned to join a blockchain consortium.

But, looking back, production deployments of enterprise blockchains seem to have one thing in common: Few of them have been led by consortiums. Of course, some companies have formed ad-hoc alliances, often representing stakeholders in a particular ecosystem, with the aim of driving early adoption and reaching initial consensus (e.g. Mediledger and Tradelens). But, at the bottom line, solutions are developed and deployed by for-profit providers and adopted by for-profit companies without being approved or green-lit by entire industry consortiums.

The case for industry silos is dwindling

For businesses that want to experiment with this technology, amass use cases and gain influence, especially those that tend to maintain their business internally and privately, are often put off doing so on public blockchains due to its limitations. Before interoperability became an industry focus, developers were understandably forced to develop blockchains in silos. They are licensed, owned or managed by the Federation.

But, now ten years later, the alliance is still tied to a private license. The enterprise blockchain space simply cannot ignore evolution. Greater interoperability and the impending wave of Web3 mean we need to re-evaluate the critical role blockchain consortiums play in this equation.

Will DAOs replace federations in the corporate space?

For enterprises, new infrastructure and decentralized autonomous organizations (DAOs), assisted by smart contracts and governance protocols, can also replace blockchain alliances as the focus of the industry. The DAO has even attracted the attention of more traditional investors, including billionaire Mark Cuban, who called the DAO "the ultimate combination of capitalism and progressivism." “With DAOs taking over traditional businesses, the future of companies could be very different,” he tweeted last June. “If the community is good at governance, everyone benefits.”

Venture capital firm Andreessen Horowitz (a16z for short) is also leading multi-million dollar rounds in independent DAOs and companies backing DAO creations. However, DAOs only make sense in specific situations, and not all enterprise domains seeking collaboration can actually implement the concept. In 2022, keep an eye out for exciting news in this area.

So, where is the league best served? Define standards, not networks

Agreeing on a unified data model, for example, would represent a big step forward for most ecosystems. And, it's certainly not impossible. Interoperability for users of Contour and GSBN solutions was actively promoted when Contour and GSBN (thought to be competitors) collaborated to develop a model to drive the digitization of the global shipping industry. In this example, alliances play their part, empowering companies and businesses to collaborate and achieve common goals.

Even with the best efforts of industry alliances, there is still no real way to compete with the frenzied pace of the tech industry, which is constantly creating solutions, platforms, and networks. If they choose to insist on defining exactly what the stack should look like, they are sure to quickly become irrelevant. If they choose to define standards that can be transformed with any stack, they will bring value to the businesses they serve. In the Web3 era, voting and consensus on features or joint roadmaps will happen without middlemen.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.