Infrachain first arrived to address a conundrum facing Luxembourg’s business scene. Companies interested in using blockchain technology were drawn to flexible private blockchains rather than the trustless environment of public ones. But private blockchains undermine the beauty of distributed ledger technology (DLT): its transparent, decentralized nature.
Infrachain offers a new combination. It provides trust & accountability through community-driven blockchain governance, reconciling Luxembourg business needs with private blockchains. Although application providers and node operators are independent from each other, they are still subject to certain agreements adopted by the Infrachain community. Providing community-driven governance for operational blockchains represents just one of the association’s pillars.
Its second role goes even further: building a blockchain ecosystem in Luxembourg. Infrachain federates blockchain stakeholders – companies & entities, ranging from tech startups to IT service providers to law firms.
“You wouldn’t use a Ferrari to drive down a country road… it’s important to know the appropriate applications.”
The plan to launch a Blockchain Hub of Excellence embodies that commitment to fueling a robust ecosystem. A joint effort between Infrachain, LëtzBlock, the LHoFT, LIST & the University of Luxembourg’s SnT, the initiative will drive blockchain research & innovation in specific industries; build a blockchain competence community through training & education; & pioneer blockchain governance standards.
To further support dialogue & community, Infrachain has organized three blockchain summits: two in Luxembourg & one in Italy. The next, to be held in Luxembourg will cover operational use cases.
Blockchains are radically collaborative by default, demanding users to surrender a new level of control & privacy. By bringing together Luxembourg’s blockchain stakeholders & strengthening the ecosystem’s key ingredients, Infrachain is helping blockchain journey safely through the so-called “valley of death” to become the basis of an increasingly digitalised world.
Why is a robust ecosystem so important?
It has a lot to do with sharing information. In 2017, there was so much hype around blockchain, it impacted the perception of blockchain. Many blockchain projects were started & abandoned because they tried to apply blockchain as a one-sizefits-all solution. That’s why we want to share information on what blockchain is, but also on what blockchain is not. Classic database solutions sometimes work better than blockchain based systems. You wouldn’t use a Ferrari to drive down a country road or a an off-road vehicle on a Formula1 track. So, it’s important to know the appropriate applications.
What are the ingredients of a successful blockchain ecosystem?
A blockchain ecosystem relies on a handful of ingredients: legal & technical framework, standards & interoperability, & a diverse, representative mix of players. There’s still plenty of work to be done in all areas, particularly in the first two, which are still full of uncertainty (How will the law recognize data authorized in a blockchain? How will different blockchains communicate with one another?)
What else is critical to every blockchain ecosystem?
Ecosystems need a common understanding & state of mind. Distributed ledger technology is about decentralization, about abandoning some power & control. It’s not just about the technology, it’s a new state of mind.
Which area still requires the most improvement?
Legislation & regulation. The Luxembourg parliament adopted that pioneering securities law last year, but there is room for much more. We need to provide legal certainty, particularly in the financial sector, home to 40 percent of Europe’s use cases. The clearer the guidance, the better it is for the sector. We help with this wherever we can, for example, by drafting a white paper on GDPR or meeting with legislators.
Where does Luxembourg rank in terms of blockchain ecosystem?
Luxembourg is doing very well since the registration & transfer of securities using distributed ledger technology is recognized by law. This is the first clear legal basis in the EU, if not the world. Also, before the summer break, a new draft legislation was presented that, if adopted, will allow the issuance of dematerialised securities using DLT.