Deloitte’s Blockchain Group Leader Suggests Bad Bitcoin News Hurts New Potential Crypto Clients
A recent Coin Desk piece (https://www.coindesk.com/deloitte-blockchain-chief-bad-crypto-headlines-are-making-clients-nervous) shared the viewpoints of Linda Pawczuk, who currently serves as the head of Deloitte’s Blockchain Group on all matters blockchain technology and cryptocurrencies. In addition, she shared the reasons why Deloitte focuses more or some aspects over others.
As per her quotes, which has been shared with Coin Desk, focusing on the bad side of cryptocurrencies is hurting the chances of potential clients who have an interest in the market. In particular, she said:
“The boards are asking us about it because it’s in the news for bad actors, and boards are nervous that blockchain is affiliated with bitcoin and altcoins and ICOs.”
She further notes that when she is invited to meetings, she is in a position where she has to constantly reassure her clients, especially considering the fact that most of them associate the illegal doings of others to the security behind blockchain technology. She told Coin Desk that she often says the following:
“Can we stop talking about my bad brother? Can we start talking about my brother who is the Olympic Champion,” where the latter is a metaphor for distributed ledger technology (DLT).
In addition to her explanations on how bad news is bringing discomfort to potential clients, she also shared her viewpoints on areas such as good fit of consortiums, the notion of free Proof-of-Concepts, stablecoins and others. The following is a quick breakdown on what she had to share:
Good Fit Consortium: Trust Plays A Vital Role
Pawczuk argues that in order to get people to onboard the DLT train, it is ideal to retort to a consortium that has existed long enough and has built a strong reputation for themselves. This, according to the Head, brings confidence in those who are planning to migrate to DLT because they trust it.
She shares the example of the Institutes and compares it to Hyperledger, where the former is more likely to attract firms. Here’s as per her quotes:
“The Institutes has for many decades serviced the property and casualty insurance industry […] it’s a very trusted entity. You don’t have to create trust […] Hyperledger has a horse in the race, it’s a platform. R3 is trying to bring different parties together and get them to agree on something for the sole purpose of blockchain. There are consortium plays where the trusted party already exists as opposed to manufacturing a trusted party.”
The notion of free Proof-of-Concepts does not sit well with Pawczuk because, “it’s the technology being applied to the solution.” Moreover, she argues the lack of “business context” around free Proof-of-Concepts as being the problem because it implies that, “you really aren’t servicing the client holistically.”
Another aspect that she deems problematic, is the number of students who have since built Proof-of-Concepts because to her, they haven’t experienced how to handle “high volume transaction systems, […] Blockchain does not replace all core systems.”
Staying Away From Stablecoins
When asked about Deloitte’s stance on stablecoins, Pawczuk declared that the firm will be staying away from them for the time being. It seems like the lack of clarity in terms of regulation is what’s stopping the firm from considering them entirely.
“Auditors are going to follow the regulators. Period. And the regulators are moving at a respectable pace, because we now have to figure out something we have never dealt with before: the auditability of decentralized systems.”
Permissionless, Public Or A Mix Of Both?
While it is clear that Deloitte would prefer to stay away from stablecoins, Coin Desk reported that the firm conducts a number of system and organization controls (SOC) audits for crypto custodians.
When it comes to whether Deloitte approves private or public blockchains, the firm supposedly operates on permissionless. However, Pawczuk argues that it’s not about one being superior than the other but ensuring that a blockchain that combines the two exists.
Here’s a detailed example she gives in arguing for a “hybrid structure,” over one blockchain or the other:
“Let’s look at the insurance model,” she said by way of example. “Let’s say you and I are in a vehicle accident, and you have one carrier, I have another carrier, and carriers can settle, but what about that other guy there that’s called a body shop? He’s not necessarily in the permissioned blockchain, because there are thousands of body shops, but could he be on the public network? So now you have a hybrid structure.”