Enterprise adoption of blockchain technology has, so far, proven to be relatively patchy. Despite the best efforts of software firms such as ConsenSys to entice companies into using public platforms like Ethereum, most have tended towards closed or permissioned networks like IBM’s (NYSE: IBM). While these offer some benefits, they miss the full security potential of a truly decentralized network. According to a 2019 study from the University of Cambridge Judge Business School, this partially explains why companies aren’t seeing the expected benefits.
However, the team behind Concordium believes it has pinpointed one of the most significant barriers to enterprise blockchain adoption – compliance. The lack of ability to identify counterparties to a transaction, along with legacy challenges such as slow throughput, could prevent organizations from using public blockchains. Concordium offers a way around this challenge and expects broad corporate takeup when it launches on mainnet this year. Concordium CEO Lone Fonss Schroder recently took the time to share some of her insights.
IM: Can you please share with the readers who you are, your previous experience, and your current involvements?
I’m fortunate that my career has so far spanned a range of positions globally, starting with roles in corporate law and moving into top management positions in the financial side of aviation and Oil and Gas.
I became CEO of a Cargo Airline, Star Air, at the age of 28 and learned all about customer service and on-time performance. That early experience helped me understand how to take a holistic view, along with a solid technical understanding and, perhaps most importantly, how to get an organization to work under pressure. I spent many years at A.P Moller Maersk in several top management positions, during which I also founded Maersk Procurement. The latter is one of my proudest achievements because it’s a real cross-company project.
I’ve also held roles as a Director of Handelsbanken and as an advisor to Credit Suisse (NYSE:CS), which gave me a grounding in finance and inspired me to co-found the Fintech product Cashworks.
Currently, I´m on the board of some interesting global companies like IKEA, Volvo Cars, Aker Solutions, Akastor, and the CSL group. I joined Concordium first as an advisor, and two years ago stepped into the role as CEO. I came into the role partly because I’d previously worked with Lars Seier Christensen, the founder of Concordium. Lars and I worked together at Saxo Bank, which he founded 30 years ago, and I had previously served as Chairperson. Saxo was among the first companies to offer an online service.
IM: What attracted you to the blockchain, and in particular, to joining the Concordium project?
Blockchain is a software that offers intriguing potential. For me, it provides the chance to develop a different area of competence and a new perspective on things. Permissionless blockchains are a disruptive technology, and Concordium is a sort of “disruptor of disruptors” with the implementation of our science-based consensus, finalization, and identification Protocols.
Our protocols are developed together with scientists from our Cobra Institute at Aarhus University, Denmark, and from the Swiss Federal Institute of Technology (ETH) Zurich. These include our fast finalization protocol, “Afgjort”, a finalization layer enabling superior security and safety. It also acts as an enabler for our upcoming sharding layer, which will make Concordium an interoperable platform.
IM: What are currently the most significant developments taking place in the digital identity space?
Well the fact you ask this question just proves that something is happening around the paradigms related to identity in the digital age.
The main and most significant developments around identity governance and administration (IGA) is that most of the major worldwide corporations together with public authorities have understood that identity management must follow the “spirit of the time” for better efficiency and to solve current issues.
These issues are all linked to the centralization aspect of the IGA which creates a surrealist situation where users are not the owners of their identity.
Plus, the business world welcomes in a very positive way most of the advancements in the identity field that are enabling SMBs and bigger corporations to better address the tech gap.
IM: What does “self-sovereign” mean in terms of digital identity? How will it overcome the many concerns that privacy advocates have put forward regarding the use of digital identities?
Robust identity programs could help guard against many issues we see in the world that arise from individuals not being able to access a government-issued ID. These include humanitarian problems such as child marriage, slavery, and human trafficking. What’s more, having an identity is a human right, and identity programs help governments and agencies to secure that right.
The UN has recognized that when citizens of a country have a legal identity, there are also often better human rights and development agendas – and so ‘legal identity for all including birth registration’ has been established as one of the UN Sustainable Development Goals for 2030.
However, more than a billion people don’t have access to their identity documents. There are many definitions of self-sovereign, but the core principle is that you become the owner of your own Identity. For example, digital ID could contribute to providing access to financial services for the 1.7 billion-plus individuals who are currently financially excluded and create value and societal benefit.
Of course, we have to remain clear-eyed about the chance of misuse and other risks and the need to mitigate them. However, the point about self-sovereignty is the one that alleviates privacy concerns because individuals retain the rights over who can access their identity and how it is used.
IM: Which industries do you believe will be the first to adopt SSID solutions? And in what kinds of use cases?
There are use cases everywhere we look – perspectives are many when you have a standardized global identity in a digital wallet on your smartphone, like the kind we are proposing at Concordium. Theoretically, you can use SSID for everything, as you do with your existing physical ID, including cross border. This is important in connection with the internet. With the emergence of AI, we can imagine a future where things happen for us based on our data and identity and what computers know about us. Whereas today we rely on digital assistants to tell us the weather or place an online order, in future we could have them managing aspects of our lives automatically, such as travel bookings and leisure activities, but always under our own control.
IM: Does adoption depend on governments being the first to embrace digital SSID solutions, or are there other scenarios that could play out?
It could be interesting if governments could move that fast. I know of various public initiatives already underway, but I believe that enterprise will move faster, and standards will become established based on this public/private symbiosis.
IM: How can enterprises be persuaded to trust in new technologies around SSIDs such as zero-knowledge proofs? Isn’t there a risk that they’ll reject an ID solution where they aren’t verifying identity with their own eyes (so to speak)?
Blockchain technology is not explicitly required for a Self-Sovereign Identity solution, but it is an excellent foundation to build upon. It offers the potential to solve some of the trust issues due to various technical advantages that the blockchain provides. Using zero-knowledge proofs as we do in our Global Identity app, you can ease GDPR issues.
IM: What’s coming up on Concordium’s pipeline?
We have our MPV (Testnet 4) launch next week, where we will present our smart contract layer. It’s currently ready for testing use cases, and our identity app is also ready for test deployment in different use cases. We also have exciting programs for the developer community and an introduction to the toolbox. I also hope that larger companies take the opportunity to join the community. Concordium testnet 4 provides an optimal chance to explore the possibilities of blockchain. We are also further decentralizing by selling our tokens, ticker GTU, which will be delivered once it’s listed closer to the time of mainet launch. GTU also functions as our finance source, so it’s an exciting time to be part of the Concordium team.
IM: What do you think is the biggest challenge facing enterprises wanting to adopt blockchain technology?
It will take quite a while for the business world to understand the possibilities of blockchain, and we – the providers of the software, the entire community, still need to understand more and develop. I remember back in the early 90s when we still discussed if the internet made sense. Only a fraction of the first use cases are still there today; nobody understood the long-range perspectives. So I believe we have to be patient with development and implementations because it takes time.
However, the technology will be used when it’s ready and when users are ready to use it. I also think that large enterprises should develop a feeling of fear that they will miss out. They should dare to join communities like Concordium’s, lean in, learn, and be part of such a type of new technology. As a new platform, we’re welcoming new participants who want to learn with us. And it´s not only for the CTOs to understand; it’s for the strategic business developers, for the CFO, and not least for the CEO. Many businesses don’t make it to their fiftieth or even fifth anniversary. This is why leaders have to be bold in embracing new innovations.
IM: Your leadership journey is admirable. Do you mind sharing some important tips with entrepreneurs and business-oriented readers of ours?
Curiosity is my driver, and I have a big interest in diving into the details. Most things are interesting when you understand more about the issues, explore the background, finding pathways towards solutions. I’ve also found that patterns recur even where you least expect them to. So you should never be afraid to jump into something you might not understand on the surface.
Concordium will launch on mainnet after a fourth and final testnet run in the coming months. Find out more and follow progress at Concordium.com. Thanks to Lone Fonss Schroder for sharing her thoughts and insights.