The Next 6 Months in DLT: Andrew Forson’s Bold Predictions for the Growing Blockchain Ecosystem
In Brief
Andrew Forson, Head of Ventures and Investments at The Hashgraph Association, discusses blockchain and distributed ledger technology’s current state, real-world applications, adoption challenges, and future potential.
Andrew Forson, the Head of Ventures and Investments at The Hashgraph Association, brings a wealth of experience in finance and distributed ledger technology to the table. In this insightful interview, Forson shares his perspectives on the current state of blockchain and DLT, discussing real-world applications, challenges in adoption, and the future potential of these technologies across various sectors.
Can you discuss any specific examples where blockchain technology has improved the efficiency or effectiveness of a project or initiative you’ve been involved in?
There are many examples, but I’ll focus on stablecoin implementations, particularly USDC on Hedera. Stablecoins like USDC and USDT have effectively become one of the killer apps of distributed ledger technology. Many people use them for genuine value transfer because they’re safe, efficient, fast, and global. Given my finance background, I think we’ll continue to push through the fintech aspect of value transfer. It’s probably one of the most successful implementations of real-world asset tokenization.
Another fine example is the traceability of agri-food products. These traceability technologies and systems are actually applicable across many industries where there’s a consortium of participants or consumers who want to know where their products are coming from. This can only really be done effectively with DLT technologies if you want a degree of trustworthiness, or in industry parlance, trustlessness, in terms of the data that is lodged to the chain, how people can read it, validate it, and incorporate it into their systems.
What are the biggest obstacles for organizations trying to adopt blockchain technology? How can they overcome these challenges?
It’s simple but fundamental. We struggle with this at the Hashgraph Group and Hashgraph Association, and governments are grappling with it in terms of regulation and regulatory frameworks. Enterprises themselves are struggling because they know it’s coming, but they don’t know how to implement it in a way they can control and understand.
I would say the biggest stumbling block is understanding what it is. Distributed ledger technologies and blockchains are decentralized – no single entity owns the data. That’s what we love about it, but it’s something governments struggle with because it means they can’t control it. This has implications for information flow, anti-money laundering, compliance, and taxation.
From a corporate perspective, corporations exist at the pleasure of the governments in which they’re established. If the government says a product is not fully compliant, a large Fortune 500 corporation may not want to deal in an asset that could be considered risky in certain jurisdictions.
Another tricky aspect is the idea of service-level agreements and control. Corporations like to be responsible for all the goods and products they deliver to the market, and customers like to know who to contact if something goes wrong. With decentralized technology, who do you call? Who ensures the network is up and running? This is where service level agreements come in, which say you can contact a specific person and get a response within a certain timeframe.
To address this, we’ve created a series of products called Hashgraph for Enterprise that include service-level agreements. This is one way we’re trying to close the gap of understanding with enterprises who are used to dealing in a centralized world but want to become involved in the decentralized space.
Lastly, it’s a paradigm shift. Any new technology takes time to adopt. We saw this with the internet, and we’re going through the same thing here with blockchain and DLT.
Do you think the Swiss government should cooperate with non-governmental organizations like yours to implement new laws and legislation?
Yes, I think they have to because we’re where the change is happening. It’s similar to AI – if governments don’t work with the people developing the technology, they’ll always be far behind. When a government is far behind, they issue regulations that are not relevant to the industry or just won’t work.
They may end up stymieing the industry in their country alone, but what we’ve learned with DLT, blockchain, and crypto is that just because you block its utilization in one place, it doesn’t mean the industry is going to stop developing. You’re better off working with industry partners to figure out rules and regulations based on what they actually do and using the knowledge of people who are very knowledgeable about the technology.
How do you see DLT technology evolving to address challenges faced by non-profit organizations and initiatives aimed at social good?
The beauty of DLT for non-profit groups is that it gives you access to the same information with a degree of reliability that any large company would have. If you’re an impoverished or less-developed nation or a less wealthy NGO, buying data from a provider raises your costs. If you don’t have the resources to do that, you may not be able to transact or conduct business. DLT can help here.
DLT also provides a central public store of data. This data can be NFTs, stock price data, or crypto token data. Once it’s on the chain, you can read from it, but you have assurances that nobody can update or delete that data. This persistence means everyone has one place where they can draw on the exact same data to make decisions.
I think the most practical advantage, though, is the transfer of resources and wealth through stablecoins. This is particularly beneficial for lesser-developed countries and NGOs working within that space.
What impact do you foresee DLT having on traditional financial institutions and the broader financial services industry?
This is a big change. I’m in an interesting position because I was born in Canada, but my parents are from Ghana, West Africa, and now I’m living in Switzerland. The Swiss have probably one of the most efficient banking systems in the world, but they’ve been quite quick to adopt regulations to allow for crypto banks. I think that’s important because it’s coming, and it’s happening everywhere.
In many third world or lesser-developed countries, because their currencies are so volatile and there’s so much depreciation, many people are using stablecoins to store their money. Instead of depositing their money in local banks or holding it in cash, they’re now holding their money in USDC. When they need to transact or buy something, they transfer USDC in exchange for the goods or services they need.
Banks are going to need to adapt. They’re going to need to provide custodial services for people’s money in a way that people can recover it. They’re going to need to provide key management services, particularly for companies. Banks are going to have to be an integral part of that distributed key management or accounts.
How are current market dynamics influencing the development and adoption of DLT solutions?
I think the impact on DLT will actually be minimal for those projects that are doing real work and not speculative work. Whenever there’s a flurry of news, prices tend to fluctuate, but the general trend and direction tends to be quite consistent for those companies that are creating real value. It’s the same thing with DLT.
We will always have meme coins and some instances of fraud, but that doesn’t mean the underlying distributed ledger technology is not going to continue to develop, and people aren’t going to continue using it.
What we’ve found since Bitcoin first arrived on the scene through to the present is continuously increased adoption. Now, there are countries issuing tokenized bonds, patient file systems based on distributed ledger technology, and NFTs being used as receipts for proof of purchase, ownership, and transaction. Stablecoins and other digitized assets are now being represented on the balance sheets of real companies. So, while market prices are volatile, the general trend is still upward and positive, and I expect that to continue.
Do you think we can solve any global issue with the usage of DLT? Is it possible?
I think a lot of global issues are going to be solved and will be solved with DLT. The democratization of access to capital and wealth management is one area. Right now, if you’re a poor person and you want to invest, it’s very difficult. Eventually, people will be able to transfer credits from their phophones to buy tokenized assets that will enable them to invest in commodities and other securities from anywhere in the world. This will help shift poor people from a debt-based culture to being able to save and invest.
Another significant impact will be in the management of healthcare records. I think, increasingly, you’ll be able to have your healthcare records in such a way that you own them, so no matter where you go in the world, healthcare practitioners will have a full record of your health history that you own.
Identity and voting are also areas where DLT could have a huge impact. Imagine having a wallet that contains all your ID cards and passport information across multiple countries, accessible like a Google or Samsung wallet on your phone but decentralized. This could make tracking and counting votes far easier and more precise while making fraudulent and duplicate votes virtually impossible.
What do you think will happen with DLT in the next six months?
I’m not the best at assessing the short-term state of DLT, as six-month chunks tend to be impacted by market movements of gas fees and underlying tokens. However, from our internal activities, I foresee continued and robust enterprise adoption. We have new projects coming on board that will make use of Hedera and the Hashgraph Group’s Hashgraph for Enterprise Suite. Each new project is quite groundbreaking.
I also expect institutional and individual adoption of crypto and crypto assets to continue, as these products become more available via ETPs and other online services. They’re becoming more regulated, and people are becoming increasingly comfortable with these products. I think every six months, you will likely see a doubling of adoption in terms of general consumers as people become less afraid.
What should organizations or startups know before using Distributed Ledger Technology for the first time?
I’d say don’t be afraid. This is a matter of when not if. The earlier you align yourself with the technology and understand what is possible and where it could impact your organization, whether positively or negatively, the better. If you’re left behind, you may end up being one of those organizations that are completely phased out or rendered extinct because of a lack of reactivity to new technology.
Remember the example of Microsoft in the late 90s and early 2000s. They didn’t bet fully on the power of the Internet and mobile, which allowed Google to gain a significant competitive advantage with Android. The way that DLT technology is changing how we think about data, application design, finance, and the world is revolutionary.
We don’t limit ourselves now to thinking about North America and everywhere else the way it was when I was growing up. Now, we understand that wealth and technology can be deployed anywhere. It’s up to businesses to figure out how to harness this new technology so they’re not left behind.
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About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
