Can blockchain technology fix the soul sucking tedium and cost of back-and-forth bureaucracy? The Swiss team behind a blockchain-based platform, called Proxeus, believes it can — and that that will be just the tip of what decentralization brings down the pipe, once components such as crypto identities become an accepted (and legal) standard.
Blockchain’s big picture vision is embedded crypto identities opening up all sorts of additional opportunities — from a new wave of share trading and lending, to frictionless identity verification.
But right now the technology remains nascent, with some fundamental challenges — such as energy efficiency and scalability — yet to be overcome and thus standing in the way of blockchain’s much touted transformative potential.
That’s why the team behind Proxeus has taken what co-founder Antoine Verdon dubs a “very pragmatic, very Swiss” approach to blockchain — aiming to bridge the gap between the old (but real) world of linear workflow processes and the brave but still alternative reality where everything that can be decentralized has been.
So they’re focused on enabling blockchain to be used to optimize single processes and workflows — as a first step towards greater transformations.
“Blockchain is going to change the whole way we organize ourselves, the whole way we build software, the whole way that even democracy works — and the whole way societies are organized,” says Verdon, laying out his blockchain faith before tempering it with a little local pragmatism. “The impact will be quite deep and eventually really powerful but in the first step it’s just another digital technology bringing efficiency to businesses.”
The team’s aim for their platform is to become ‘the WordPress of blockchain’. The technology is open source, and the platform will be made freely available for anyone to use (people building Proxeus apps can monetize them via charging fees based on usage).
Back in February Proxeus raised $25M, via an ICO for their XES token, to community fund this vision.
“At its core Proxeus is a workflow builder and document generator,” says Verdon. “We have a framework which allows anyone to come and use building blocks to create workflows and at the end blockchain apps. But — just like WordPress is a website creation tool — we don’t intend to go down one level in terms of offering products ourselves and going directly into the market.
“We see ourselves and the Proxeus model as a toolbox and a tool provider.”
“We’re working on APIs on both sides,” he adds. “Both connecting Proxeus to different blockchains — we’re now connecting to Ethereum and Hyperledger — and on the input side, connecting Proxeus with a series of ERPs.”
He says another of of the goals is a connection for SAP systems.
The team has been developing the platform for 2.5 years, at this stage. They’re now beta-testing and running their first trials. And Verdon is hopeful the first live applications will be running on the platform by the end of the year, once they come out with a public product.
One interesting use-case for their blockchain technology — which they just last week publicly demoed in a prototype form under test conditions, as an entry in the digitalswitzerland challenge — is a company registration system using a digitized blockchain process to radically shrink how long the necessary administration takes.
The traditional route for registering a company in Switzerland takes an average of 10 days, according to Verdon. He says the process can take as long as six weeks. But the team’s proof-of-concept demo delivered a company registration in less than two hours — though it should be noted they had been working up to that for a year, and collaborating with IBM and Swisscom on the project.
What reducing the time it takes to register a company meant in practice was Proxeus creating a digitized workflow for the entire multi-step process — using blockchain to decentralize the steps (and thus help break down linear bottlenecks), combined with smart contracts to enclose and enforce rules around how to create a company (such as the need for a certain number of shareholders and shares), thereby enabling all involved parties to be on the same page.
“We started with a very traditional digitization project — we digitize the way documents are created and the user can create them, give his input in a much more efficient way,” explains Verdon. “But we add the blockchain piece on top of that to make the digitization process even more efficient than it otherwise would be. The main problem slowing down the registration process is there is a complex sequence of partners… The problem is before one party has finished their work the next one cannot start — that’s the thing that we solved with blockchain.”
Proxeus built a web interface for the prototype so that all the parties involved in making company registrations happen could log in; contribute their pieces of work; and “give their okay to the process” — all without needing to know how blockchain works.
“The entrepreneur registers their own company [but] the company registration is pending until the other parties come and say yes the money has been paid, yes the conditions are fulfilled… Seeing things like this as a a list of check boxes that need to be checked, instead of a sequence, it’s a much more efficient way to work.”
Another bit of Swiss pragmatism: Proxeus’ system enables even blockchain refuseniks to participate because it still allows for paper documents to be sent. (In that case other parties in the chain can digitize the document and check the necessary confirmation box to keep things moving along.) Though too many blockchain refuseniks/paper-pushers would clearly reintroduce some friction to the process.
For the proof-of-concept Proxeus also pared back the workflow to a most basic case. But it’s an interesting example, nonetheless. And one that Verdon believes illustrates the potential of what can be achieved once lots of organizations start to experiment with — and see potential in — decentralizing their processes.
“We have a quite pragmatic way for any company to start connecting the business workflows — maybe in the legal space but we also working with a large Swiss university to digitize their master degrees and use blockchain to verify them,” he tells TechCrunch.
“We are in discussion with a car manufacturer, with a commodity trader. We receive almost every day requests from many large companies interested to use Proxeus as a sort of sand box that will allow them to test how blockchain could transform their business value and the way they work.”
What is being replaced here? Some purely administrative job roles. “All those job roles that mainly consist of receiving information in one form — for example paper — and inputting it into another format, for example, digitally, they will gradually disappear,” predicts Verdon. Though that’s clearly not going to happen overnight. (But once blockchain infrastructure gets widely adopted change could happen suddenly.)
“We know there are really crazy blockchain ideas out there… but it will take several steps before we go into those new business models and ideas. I think what’s lacking — and I hope we’ll be bringing — is this bridge between the traditional world and the workflows up to this blockchain,” he adds.
While Proxeus has worked with partners on the company register example, to showcase how this bridging strategy can work — taking one process and digitizing it in a way that “doesn’t change anything”, and thereby allowing all players to jump into using blockchain — its hope is that it can develop this into an ecosystem of users who pick up the baton and start figuring out how blockchain can work for them.
“We see ourselves as enablers of businesses who want to use Proxeus technology,” says Verdon. “If everything goes well at some point there will be people and for-profit businesses coming and taking the Proxeus technology and charging clients for implementing that in a way that is compatible with company needs. Just like Accenture, for example, is implementing SAP solutions with other companies. We think that our role will be also developing a network of partners that understand Proxeus and can take it and apply it with industry clients.
“We keep the door open for doing part of this ourselves — but we see ourselves more as an enabler than as the ones that will be actually doing the business at the end.”
“It’s a decentralized model where we have our own cryptocurrency now with the ICO with the excess and the excess will be used to co-ordinate the different parts provided by the parties of the decentralized ecosystem, so that one party will be able to download Proxeus as a DApp [decentralized app] and make it run on their own server. If they want to create a workflow then they can do it. If they want to — for example, if another country now wants to create a company register and sees our system as a good model then you could buy the workflow created by the other company or country, in that case,” he continues.
“Then if you want to store your documents created on a server which is not yours then other production could be taken by the party in the ecosystem and all those relationships between the IP creators, the storage partners, the DApp holders, using services of others, will be connected through Proxeus in a visible way… and there are ways to allow them also to pay with Euros or Swiss franks, or whatever they want. But the underlying mechanisms will be reviewed by access and there it’s going to be up to the parties to decide whether they want to provide their services for a fee, and if for a fee then they will have to pay it with excess.”
In the case of the Swiss company registry project, Verdon says the hope now is it will be taken forward into an actual deployment. The team is in discussions with the Swiss state which he describes as the “natural” lead partner for that particular use-case.
A first productive version could come as early as this year, he adds. Though he also notes it would be just a beginning — whoever gets involved would need to build on the MVP, adding “more and more complex cases”.
Because of course “there are many exceptions” involved in company registrations. And that’s where the soul-suckiness of bureaucracy starts to creep back in.
But Proxeus’ wider blockchain faith is that by decentralizing business processes it can at very least allow information to flow more freely — unlocking efficiency gains.
“Using blockchain is a very efficient way to make people collaborate better,” argues Verdon. “I think through [the platform] we have a quite pragmatic way for any company to start connecting the business workflows.”
Proxeus’ platform also enables users to get their hands dirty playing around with decentralized app building too — which he touts as “much cheaper and faster” than traditional app development, as well.
“If we had built the company register application with a traditional process it would have been a very complex IT project,” he continues. “There are several parties… you would need to create one platform where they all come, and they all receive different permissions — it would be super complex.
“In our case everyone has their own small workflow, their own small decentralized app that we can build individually — and that are connected through a blockchain layer bringing all of them together, so I think it’s a much more efficient way to program applications.”
Beyond those near-term, and fairly tangible benefits, Verdon says businesses taking the blockchain leap of faith now — and playing around with what the tech can do for them, via the building blocks Proxeus is offering — are also positioning themselves to be ready for the more transformative “crazy” models coming down the pipe — i.e. as a consequence of mass adoption of blockchain-based decentralization (if/when it comes).
“Just like you have a verified account at Facebook or Twitter for personalities I think at some point you will have, on LinkedIn, the possibility to connect your crypto identities so you can have this small check next to your degrees — that you have verified degrees publicly,” he suggests, giving an example of how blockchain could create a major trust-based shift within existing digital ecosystems.
He won’t be drawn into making any specific predictions for how long it will take for blockchain to scale up to be able to deliver major scale process change. But he is convinced the core tech has the potential to drive some truly seismic shifts — including at a societal level.
“It’s still extremely new,” he argues, pointing to the blockchain ecosystem generally. “I think it’s going to take a few years still until, on the one hand, the protocols develop to a level where they can use less energy, be more efficient, and on the other hand where simply businesses have understood what blockchain will bring, how a decentralized business can be run, how blockchain can allow them to develop new services, new business on top of what they have.
“Just like with the Internet revolution… it took quite some time for businesses to really grasp the impact of that. And for clear models to develop how the different industries could use those technologies — so I think it’s going to be the same here. I expect you’re going to see first movers publishing some small-scale live applications this year but for really large services provided using blockchain we probably need to wait another couple of years.
“The longer term vision, the longer term impact may or may not happen at that scale — it has the potential to transform the whole way society works — but it still has to be proven.”
Verdon’s bio on Proxeus’ team page says he’s been involved in the crypto/blockchain space since 2012, including as an investor. He tells us he was an early investor in the YC- and Google Ventures-backed Buttercoin exchange, for instance — too early as it turned out, as the startup went bankrupt three years ago. So even though the core idea was solid — as the subsequent success of other Bitcoin exchanges, such as Coinbase, underlines — timing is key to any investment.
He claims better success investing in crypto currencies. So is he hodling his Bitcoins — despite recent downturns? “Yes, you must,” he replies, though he also cautions he “tries to diversify everything in crypto”.
“If you work in crypto you also have to believe that it’s going further,” he continues. “And sometimes you have a small heart attack but at the end the trend is very positive — if you compare the prices between January 2016, January 2017, January 2018 there is a very clear and a very high upward trend.”
It’s that same unshakeable conviction that Proxeus’ platform is founded on — and the faith that many more believers will come.