Blockchain is actually the most inefficient database other than a note book. We believe blockchain should be used only when all other technologies have failed.
These are the words of Gadi Ruschin, the CEO of Wave – the very same Wave which powered the world’s first blockchain trade finance transaction back in 2016.
So when the engaging Ruschin gave Legal Geek this piece of his mind we almost fell off our office fit ball.
But Ruschin’s words should not be taken as disparaging or negative towards blockchain’s potential. Far from it. He merely seeks to point out the potential for improvement when it comes to transferring value via a distributed digital ledger.
You may remember the pioneering blockchain transaction which Wave executed in September 2016 between two Barclays clients: Irish agricultural food co-operative Ornua and the Seychelles Trading Company.
The transaction guaranteed the exportation of almost $100,000 worth of cheese and butter, a deal only previously possible via the movement of paper documents which would typically take between 10-14 days. The Wave-handled transaction was wrapped up in 4 hours.
The transaction was significant as it was a live pilot without any compromise on the business transactions of the parties involved, which included not just the two companies exchanging goods for money but a shipping company, an insurance company and Barclays as the bank for both Ornua and the Seychelles Trading Company.
“International trade is not only the world’s biggest industry but we know this industry very well so it was an appropriate sector for the pilot.
“But it is an industry which still uses paper documents. Why? Because although every industry knows how to standardise and digitise itself, trade involves more than one industry and when those industries want to create standards or digitise data, it’s much more complicated.
“People trust paper documents because when you have a paper document, no one can take it off you. “But blockchain makes digital bearer documents possible. So although it is very inefficient, it is more efficient than exchanging paper documents.”
Wave’s pioneering transaction was completed over 16 months ago. But how has Wave progressed since then and how has blockchain progressed as well?
Ruschin is diplomatic on this.
“The industry is still in an early stage when it comes to blockchain and not too many use it,” he says. “There is a lot of talk about it but not much practical application. Proof of concepts are fine and always successful – but are very sterile environments.
“For Wave, I was never under the impression that our transaction would change the world, however it’s the beginning and it definitely gave some promotion to the Wave brand as well.”
Wave have since gone on to run similar pilots with Israeli shipping company ZIM and Spanish banking group BBVA, delivering successful results on both occasions.
Yet wider industry uptake of blockchain for international trade transactions is still far from even being on the horizon.
So Ruschin is instead focusing on what he can control: moving his company forward. And in that regard he has some influential friends.
Barclays – whose relationship with Wave started when Wave participated on the Barclays Accelerator programme in 2015 – have remained a strong supporter of Ruschin’s company following the September 2016 pilot.
“They are extremely supportive,” effuses Ruschin. “They have introduced us to many other companies in the industry. They are not trying to keep us for themselves. They realise that Wave is useless if it’s just for them. Blockchain networks like Wave need to be for as many parties as possible for it benefit anyone.”
Gadi Ruschin is the CEO of Wave, an Israel-based FinTech company which provides a platform to connect all members of a supply chain to facilitate a direct exchange of documents without the need to trust any third party.