Ahead of his talk at Blockchain Expo on March 17, The Block speaks with Fergal Downey regarding the inner workings of his engineering team, his thoughts on the challenges facing enterprise organisations, and the potential future directions of the blockchain industry.
Fergal Downey is vice president (VP) of engineering at Rakuten Blockchain Lab in Belfast, the blockchain-based products and solutions team for Japanese eCommerce giant, Rakuten. Prior to joining in 2016, he led an engineering team at Bitnet Technologies, a cryptocurrency payment management platform, as well as having worked in California and Belfast as senior director for the Visa-acquired credit card payments firm, CyberSource.
With two decades of experience in fintech, alongside his early involvement in emerging blockchain solutions, Downey’s session at Blockchain Expo will bring substantial insight exploring the practicalities of blockchain adoption occurring throughout the financial industry and beyond. He will discuss driving experimentation and scaling adoption of blockchain technologies at Rakuten.
“I’ll be giving a set of recommendations as to how we have approached and encouraged blockchain adoption at a large corporate firm such as Rakuten,” Downey tells The Block. “The talk will include topics such as letting the rest of your organisation know what you are trying to achieve, to developing partnerships, experimenting, and aligning with your company’s product strategy.”
One of the engineering team’s biggest projects in recent years has been the development and maintenance of Rakuten Wallet, a Japanese-only cryptocurrency exchange app released in August 2019.
Last month, the company announced that cryptocurrency holdings in the app can be used to pay into users’ Rakuten Cash (E-Money) accounts.
“Those funds can then be used at hundreds of different retailers, like 7-Eleven and McDonald’s,” Downey says. “News outlets were reporting that you can now use your crypto assets to buy a Big Mac, which we were excited about as it demonstrates the mainstream adoption the wallet is seeing in Japan.” The Rakuten lab also recently completed a proof of concept with Irish IoT startup Wia to showcase a potential way to track companies’ Covid-19 compliance. Downey explains that his team “used a combination of occupancy information coming from IoT sensors in buildings to write tamper-proof events into a private blockchain, which then provides an audit trail for Covid-19 regulations.”
This will also be referenced in Downey’s upcoming session. “It means you can look and see if a particular office, restaurant, or other business has stayed within their occupancy limits according to local government guidelines, and that is then recorded and accessible via the blockchain,” he adds.
Speaking on the daily work inside Rakuten Blockchain Labs and the challenges the company encounters, Downey notes the differences of being on a blockchain-specific engineering team compared to if they were operating more traditional forms of data storage.
“A major difference is that we have to deal with the finality of blockchain’s means of storing data,” he explains. “Once a transaction has been confirmed as an existing block on the ledger, there is no going back, and we have to design our platform around that.
“Other issues emerge due to the constant changes in cryptocurrency systems,” adds Downey. “For example, twice a year, we have to deal with a Bitcoin Cash fork. The last time it forked we did not even know until after it had happened which of the forks was going to be the main fork, so we had to plan for both eventualities.”
Adjusting to large-scale changes to cryptocurrency systems is a constant part of the Rakuten Labs working schedule. As Rakuten Wallet supports Ethereum trading, the upcoming Ethereum 2.0 upgrades pose some difficulties for the team.
“Some of the future Ethereum upgrades will break our systems, some will not. It is similar to if you are integrated to a third-party API and they change their API,” says Downey. “There is always likely to be a breaking change.”
Moving on to discuss more general trends in the blockchain sphere, Downey outlines his opinion on some of the key challenges firms and the industry need to overcome in 2021.
He notes that historically, skills have been a serious issue due to the amount of knowledge needed to build blockchain-based solutions. However, with organisations providing blockchains-as-a-service (BaaS) this is becoming less of a concern.
As this issue becomes less significant, others are growing in import. “In order to realise the true benefit of blockchain, you have to be participating in a blockchain network,” says Downey. “It is similar to if Facebook only had two people with accounts, it would be of limited use as a social network. [Blockchains] are more valuable when you have a consortium of organisations participating.”
In terms of the industry in general, Downey believes that “a lot of organisations are still viewing blockchains as optional. They see blockchain projects as side-projects that do not need prioritising.”
He charts this down to blockchains still being an emerging technology in its early stages. Looking towards the next decade of blockchain development and integration, Downey expects greater mainstream adoption, a diverse selection of different blockchains for different functions, and increased tokenisation of assets.
“I do not think there will be a blockchain to rule them all. Just like with databases today, it is going to be a technical choice depending on specific requirements. However, with this in mind, I also think that interoperability is going to be key for the industry to succeed.”
While bumps in the road will remain for the future of blockchain adoption, Downey and his team at Rakuten Blockchain Labs are working hard as part of the solution to help flatten those bumps and make the journey a smooth one.
Editor’s note: Tune in to Downey’s talk at the Blockchain Expo on 17 March for a deeper exploration of how blockchain-based solutions’ teams are achieving this adoption.
Interested in hearing more in person? Find out more at the Blockchain Expo World Series, Global, Europe and North America.