CSIRO’s Data61 data innovation group is collaborating with law firm Herbert Smith Freehills and technology giant IBM to build the Australian National Blockchain (ABN), a large-scale cross-industry platform for smart contracts.
The ABN is intended to serve as a national infrastructure, allowing companies to join the network to share digitised contracts. Work is currently underway on a pilot, with the platform expected to be able to host live transactions by mid to late 2019.
The decentralised nature of blockchain technology means, once the platform is available, there will be one version of a contract accessible to each involved party. Permission-based access is intended to allow data to be exchanged securely, and signatories can confirm the authenticity and status of the contracts.
Organisations will be able to digitally and transparently manage the lifecycle of a contract through the blockchain network, through the negotiation and signing stages, but also throughout the term of the agreement.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Speaking to StartupSmart, Dr Mark Staples, senior research scientist at Data61, said the plan is to create a way of helping organisations work together more efficiently.
“Ultimately it’s a new type of technology infrastructure that is going to provide a basis for a whole lot of innovation opportunities,” he says.
“It’s not primarily about automating the law, it’s about using contracts better as a tool,” he adds, saying it could create “new kinds of ways of working together, automated through the smart legal contracts”.
While the focus is currently on legal contracts, “blockchain smart contracts aren’t always smart and aren’t always contracts”, Staples says.
Data61, IBM and Herbert Smith Freehills will incrementally adding more of the ‘smart’ aspects, he adds.
“We have built from the ground up in a legal context. That’s why it’s important that we have the involvement of law firms.”
Outside of this, Staples says the platform could provide new opportunities for blockchain startups.
There are already “vast amounts of money being raised internationally through ICOs [initial coin offerings] and through VCs for platforms and apps in the blockchain space”, he says.
“We expect some of those businesses to be emerging out of the creation of this new kind of infrastructure.”
By using the platform, startups will be able to “enable and exploit new types of business value for customers in existing and new markets”, he adds.
And that’s the whole point of disruptive technology, says Staples.
“Disruptive technology doesn’t help you do things your doing today in a better way, it provides new business models and new ways of doing business,” he says.
This announcement comes after the Australian government announced a $1 billion partnership with IBM to accelerate the uptake of blockchain and artificial intelligence technology. The government also gave a nod to the technology in this year’s federal budget, allocating $700,000 into investigating the use cases of blockchain technology.
However, Daniel Alexiuc, founder of Brisbane-based Bitcoin startup Living Room of Satoshi tells StartupSmart the ongoing focus on blockchain is “naive”.
Blockchain is merely a database, he says.
“There’s nothing in the slightest that’s interesting about it at all”.
Smart contracts are only secured by the proof-of-work algorithm that supports Bitcoin and other cryptocurrencies, he says.
“Take that out and the theory is completely gone, and you’re back to trusting whoever’s operating the database,” he says.
Businesses already have APIs that will allow them to do the same thing, argues Alexiuc.
“There are blockchain groups in Australia who can explain all of this to any government department that wants to listen. I don’t know why they’re not engaging these people,” he says.
According to Staples, however, the differentiating factor here is the concept of a shared ledger that can “radically reduce the costs of working together”.
Blockchain-based smart contracts can provide a shared view of a transaction and “a common view of the truth”, he says.
“That’s not something you can get out of an API or a point-to-point message exchange.”