The Nordic Blockchain Association
I spoke with Dan Taki, entrepreneur and CEO of The Nordic Blockchain Association (NBA). We discussed blockchain’s multidimensional nature, among others, how it can help fight corruption and fraudulency in society, increasing sustainability, trustworthiness, and transparency.
The Nordic Blockchain Association is a non-profit organization founded in 2017 and is conceived to consolidate and combine the Blockchain Community’s sphere in the Scandinavian Countries; Dan Taki understands the challenges the fast-moving world of technological advances pose. His work aims to promote the adoption of blockchain technology in both public institutions and private businesses by gathering groups of developers, students, and enthusiasts, who aspire to become an active part of this tech-evolution into the future. NBA cultivates knowledge sharing, testing, and the development of staggering blockchain applications.
Dan Taki started his journey into blockchain as a university Master student within IT and business at Copenhagen Business School (CBS) where he had a strong focus on researching and writing academic papers on blockchain and AI technology. During this time, he also co-founded the CBS Blockchain Society and instructed students in Artificial Intelligence. Currently, he is a partner at SILO, an IoT company that interlinks AI and blockchain technology.
Why blockchain will transform the way we do business
One of the challenges that most entrepreneurs face is how to devise a business model in which companies in any given industry can agree on common standards and work together. The solution is building trust.
Blockchain-based smart contracts are trust builders because it turns blockchain into an intermediary to run business transactions, legal agreements, and automated data exchanges. Proof-of-work blockchain models cultivate trust by creating a distributed consensus algorithm that certifies every transaction. The scalable nature of blockchain draws businesses worldwide, promising a bright future for this innovation.
Gartner estimates that blockchain will create an annual business revenue of more than 3 trillion dollars by 2030, making sense that there is a vast increasing curiosity and demand to understand how it works, what problems it solves, and how it fits within different business models. Yet it is a space that is not stagnant; it is a constantly developing complex technology, and many companies find it difficult to unlock its full value given the intricacy there is about networks, data models, and skills gaps amongst their employees.
The NBA aims to fill these gaps by providing companies with the know-how in blockchain technology and spearhead the digital transformation that it can bring upon organizations by enabling safer, more seamless, and trustful communications.
IT projects, like blockchain or AI projects, are not merely IT projects. They are organizational development projects. Organizations are like living organisms, and consequently, if we treat them as IT projects, we will fail. The whole organization and society need to be prepared and aligned through responsible leadership and governance since technology is made by humans and used by humans. Leaders and decisionmakers must communicate clearly on what, when, and why the system is implemented and how it will change the organization and society that we live in.
This lack of understanding on behalf of regulators is often tied to the stigma associated with the bad reputation that Bitcoin still has for the average person mistaking the blockchain technology behind it with criminal activities such as money laundering. Most such cases occur through traditional banking institutions, whereas blockchain technology can help fight these illicit money flows.
Taki illustrates this contrast between startups and regulators by making an analogy with ships and changing tides, where innovative startup companies are racing speed boats and regulators are more like rigid galleons that do not shift their direction so easily.
To ensure that the technology that we use today is developed and used ethically and morally correct, we need empathetic leadership, governance, and a regulatory system that understands the technology behind. However, regulations are most often the biggest obstacle that slows down technological adoption in society. Not only because technology is changing faster than regulators can keep up with, but also due to a lack of understanding of the technology that authorities regulate. Therefore, it is important that the authorities, being the board of directors of a company, or governance in a state, recruit people who understand the technical and societal impact of implementing new emerging technologies.
One of the NBA´s main attractive features for companies is that it is a non-biased, neutral organization with the freedom to work with any blockchain protocol. It is precisely this flexibility, combined with avid enthusiasts and professionals, which creates ideal opportunities for creative projects that can resolve real-life problems such as money-laundering and corruption.
The problem with illicit financial flows
The estimated amount of money laundered in one year globally is around US 2.85 trillion. The clandestine nature of money laundering makes it very difficult to track organized crime and drug trafficking funds. According to UNODC, it is believed that around 2–5 percent of worldwide GDP is laundered globally every year, which is indeed an alarming number.
Global cities that rank high in the world economy also provide a hotbed for subversive activities targeted by criminals. The City of Amsterdam invited the NBA to participate in the Flying Money Conference (2018), where the central theme was money flows not allowed by law or disapproved by society.
Although issues around money and corruption have always been a present fact throughout civilized human history, it has never had such massive ramifications in the past than it does in the current time. Nowadays, the world is so intertwined that a single bank’s falling can provoke a global financial crisis like the one seen in 2008.
Municipalities gather citizen´s taxes to pay for public infrastructure, schools, hospitals, roads, etc. The uncertainties that sometimes emerge between financial players resisting paying taxes to the cities that host them give criminal networks a gateway for corruption. It can take up an extraordinarily vast amount of time to follow up just one morning of international transactions, which benefits crime and turns money laundering into an easy practice that negatively impacts the public domain that characterizes cities.
Our public domain is the foundation of the city and thus includes all people. The NBA´s contribution to this conference was to facilitate knowledge and attempt to answer how to engage communities in taking responsibility and setting obstacles to illicit money flows in international cities such as Amsterdam.
How does the NBA spread the concept of blockchain
The NBA has four pillars from which it promotes the adoption of blockchain for businesses. These include blockchain projects, conferences, academies, and networks that assist in regulatory work and community-building of blockchain organizations.
The organization has facilitated the biggest blockchain conference in Denmark, where 300 industry leaders and professionals and 40+ speakers across different sectors participated. The conference’s purpose was to explore blockchain technology’s impact on both the public and private spheres.
Their last conference, titled Blockchain. Leveraged took place last year in Copenhagen in collaboration with ARYZE and PwC Denmark. Oriented to the more hands-on implementation of Blockchain technology rather than theoretical use cases. The NBA has also kickstarted a pilot project with the Municipality of Høje Taastrup Kommune, which concluded successfully. The Municipality seeks to solve large amounts of resources spent on validating the invoices it receives from citizens’ residences. The solution offered by the NBA is to apply smart contracts that facilitate the process of invoice validation.
How does this work ?
The parties involved in smart-contracts can access the same version of the agreement on a common blockchain network. A consensus is necessary for any of the parties to alter this agreement. All the activities ever carried out on the network are permanently recorded in a data block that cannot be altered. Another characteristic regarding smart contracts is their ability to immediately transfer money internally in the system if the terms of the contract are accomplished, making it a strong proposition to solve the issue.
The years to come will be exciting for the NBA, given their recent partnership with KPMG to explore blockchain technology’s potentials and find common ground that benefits their organizations.
Blockchain, AI, and the world to come
Dan Taki is thrilled about the potential of blockchain in the future, and he expects the technology to reach new heights while disrupting several industries over the coming years. We see blockchain cases in different industries such as healthcare,government-issued documents, the banking and financial sector, etc.
Blockchain technology will do to value what the internet has done for information. The raison d’être of blockchain technology creates trust and consensus between the parties in the network, which means that it is applicable in the industry where consensus is an issue due to its decentralized, transparent, and tamper-proof capabilities. Blockchain use is not exclusive to the financial sector, but it can also be used to issue sensitive personal data, such as health information, passports, voting results, driver’s license, graduate transcripts, etc.
Some countries are already implementing this technology. For example, the Estonian government has developed an e-health system that covers every one of its citizens who had ever visited a doctor, saving time for both patients and doctors. In another example, the Dubai land department became the world´s first government entity to conduct all of its transactions through blockchain technology to establish an environment that enables KYC data sharing in the UAE and, thus, the immediate digital onboarding of companies by financial institutions. According to a Santander Fintech study, blockchain could reduce financial costs to a staggering number of 20 billion dollars by removing the need for intermediaries and ensuring transparency of financial transactions.
The potential use cases of blockchain in the future are endless, and many are yet to be conceived. Still, one of the areas which Dan Taki is particularly interested in is Artificial Intelligence concerning security.
We must learn from the past so we can be better prepared for the future. Every time an emerging technology is developed, there is a risk of it getting exploited by criminals. Just like a car can be used to drive your kids to school, it can also be exploited for harmful actions. One of the highly concerning problems that we will be facing is deep fake. Having regulations that ban these illegal actions does not solve the problem. But developing technology that can detect illegal actions will and AI has the capability to detect fraudulency, which, combined with blockchain technology’s ability to store data encrypted, make it a powerful match.
Taki hopes for a future where technology can be used in a sympathetic way to fight the world’s biggest problems like corruption, fraudulency, and poverty. He envisions a future where new innovative solutions are developed to resolve real-life issues. The NBA will likely play an important and honest role as a trustworthy, non-biased organization that interconnects all the institutions (private, public, and academia) around adopting blockchain technology and social responsibility.