Can the Midlands Tech Future be on the Blockchain?

Can the Midlands Tech Future be on the Blockchain?

There have been a number of break through technological shifts over the past 20 years, the rise of the Internet, the ease of access to cloud computing and the implementation of artificial intelligence to name a few. They have all spawned successful companies across the Midlands, could Blockchain and its related technologies be the next big frontier for our next generation of startups?

In June 2021 the Financial Conduct Authority (FCA) reported 78% of UK adults¹ said they have heard of cryptocurrency, the biggest and most predominant being Bitcoin. An estimated 2.3million¹ people in the UK have purchased a crypto asset in the year to June 2021 with a median holding of £300.

The same study showed that attitudes towards crypto currencies continue to change with consumers less likely to cite cryptocurrency as a gamble when considering their reasons for purchase.

Institutional investors show increasingly open interest in crypto markets and in the Bitcoin futures market, the number of institutional investors grew by 27% during the second quarter of 2021².

With changing consumer and institutional attitudes what is it about Blockchain based projects that have changed over this period? The answer is that many of the most successful projects have been the ones which solve real world issues. Projects around smart contracts, network security and NFT’s have matured to the point where we can start to see real life results from their implementations.

Could we therefore compare the current state of the Blockchain ecosystem to the early 2000’s of the Internet? Companies like Google and Amazon were already established but no where near the market forces they are today, giants like Facebook (formed in 2004) were merely startups. Could Bitcoin and Etherium be akin to Google and Amazon and Cardano to Facebook?

If we really are in the early era of another break through technology then how can we foster and support the next generation of startups within the Midlands region? Can our graduates and entrepreneurs identify areas on either a local or wider level that could be solved by the implementation of a Blockchain technology? What, if anything, do our institutions need to do to support them?

All big questions where we perhaps need to look to the past for answers. When we’ve been through previous technological changes what did the region do right or wrong in encouraging innovation in new technologies?

The University of Birmingham have published several research papers into Blockchain technologies including a study into Digital Ticketing on the Blockchain⁴, it concluded that with the security and decentralisation of their Blockchain implemented that it provided a number of benefits to both passengers and organisations.

As of September 2021 the Midlands has 9 Bitcoin ATMs, with 4 being in Birmingham city centre, giving people the opportunity to buy or sell coins through ATM style machines. Some only support Bitcoin with others supporting a wider range of coins including Bitcoin Cash, Etherium, Litecoin, Dogecoin, Dash and Ripple.

This compares to 55 ATMs in London and 10 in Manchester. Is this an area of infrastructure that could help adoption? One country which is investing heavily in crypto currency adoption is El Salvador, in September 2021 it became the first country in the world to adopt a cryptocurrency – in this case, Bitcoin – as legal tender.

It’s a move which has gained extensive media attention in what is widely seen as an experiment around the practicalities of using crypto currencies in our day to day lives. It’s unknown whether this will trigger a wave of countries adopting the technology but it does offer an opportunity to iron out some of the difficulties. So far the results look positive with a lowering of transaction and banking fees for citizens but time will tell as to whether the benefits are longer term.

In the UK the FCA have taken extensive interest in crypto currencies warning of potential scams and banning the most risky leverage based trades though have in large allowed the market to evolve and grow without too much oversight. Further regulation is likely and this in itself could present opportunities for businesses.

With adopting any new technology, especially ones with an air of controversy, there is an element of risk. Is the implementation of Blockchain technology too big an opportunity to pass on and do the entrepreneurs of the region have the appetite for this level of risk?

Sources:

1. https://www.fca.org.uk/publications/research/research-note-cryptoasset-consumer-research-2021
2. https://www.cryptovibes.com/blog/2020/07/13/institutional-investors-still-have-a-big-appetite-for-cryptocurrencies/
3. https://coinatmradar.com/country/225/bitcoin-atm-united-kingdom/
4. https://research.birmingham.ac.uk/portal/files/93865704/Preece_Easton_Blockchain_technology_as_a_mechanism_for_digital_railway_ticketing_2019_IEEE_International_Conference_on_Big_Data_2020.pdf

Pete White runs an award-winning digital agency based in Shrewsbury. The Web Orchard has 15 years of website & e-commerce experience and has worked for national and international companies and organisations.