By Jean-Pierre DARDAYROL
Ingénieur général des mines, président du comité de rédaction d’Enjeux numériques (nouvelle série des Annales des Mines)
By Côme BERBAIN
Assistant manager in Expertise, Agence Nationale de la Sécurité des Systèmes d’Information (ANSSI)
Blockchains are a fad. This hard-to-ignore word is frequently used with varying acceptations! To grasp this new phenomenon, the effort must be made to define it, identify its structural components and check on the relevance of its properties and promises. Given the multitude of experiments in several branches of the economy, we wonder whether the term “blockchain” relevantly applies to certain uses. We also wonder about the motivation that leads various parties to take interest in this phenomenon. Far from being merely technical, the fundamental issues of blockchain technology have to do with organization and governance, with the finding of solutions for trustworthy transactions among human beings. In this sense, this new technology has a part in the digital transition in several areas, especially the legal professions. Blockchains: The concept, techniques, interested parties and uses
By Patrick WAELBROECK
Professor, Télécom ParisTech – Institut Mines-Télécom
Blockchain technology extends far beyond time stamps, bitcoins and the security of financial transactions. An ecosystem involving smart, connected objects (the Internet of things) probably cannot develop without some form of this technology, which opens the way toward a “liquefaction” of the physical world, an economics of real-time microtransactions and the smart sharing of data bases. However it is important to distinguish between types of blockchains, in particular private and public ones, since they have quite different economic properties. The problems related to the governance of public blockchains suggest that this technology cannot, by itself, create trust. The economic stakes of blockchains
By Ilarion PAVEL
Engineer from the Corps des Mines (Conseil Général de l’Économie, de l’Industrie, de l’Énergie et des Technologies) & Laboratoire de Physique Théorique (École Normale Supérieure)
Blockchains encounter several technical, legal, societal and regulatory difficulties during implementation. These problems are reviewed; and a few solutions, suggested. Blockchains: The challenges to a rollout of this technology
By Alexis COLLOMB
Chair of Finance (Conservatoire National des Arts et Métiers, CNAM)
Klara SOK
Researcher and doctoral student (CNAM)
and Lucas LÉGER
Researcher and doctoral student (CNAM)
There has been much talk about how distributed register technology, in particular blockchains, will transform the financial infrastructure. By focusing on payment systems and the infrastructure, this article seeks to discover the reasons why parties in the financial sector have been prudently enthusiastic about this technology. The problems of adopting it and hesitation about doing so are discussed, in particular the presupposition of a new paradigm, “coopetition”. A concise inventory of recent initiatives by payment institutions, banks (in particular central banks) and international institutions explores this technology’s possibilities, in particular that of putting it into production. The prospects… Distributed ledger technology: What impact on the financial infrastructure?
By Nathalie BEAUDEMOULIN
Coordinator of Pôle FinTech Innovation (Autorité de Contrôle Prudentiel et de Résolution)
Didier WARZÉE
Engineer from the Corps des Mines, expert at Pôle FinTech Innovation (Autorité de Contrôle Prudentiel et de Résolution)
and Thierry BEDOIN
Chief digital officer (Banque de France)
The ACPR (Autorité de Contrôle Prudentiel et de Résolution), which oversees banks and the insurance industry in France, and the Bank of France (the central bank) are coming to grips with the technological revolution under way in financial services. Blockchains figure among the techniques that call for optimizing, or even modifying, the processing and delivery of financial services. However this technology is not very mature. It must cope with four major dilemmas before it can be used for financial operations. Blockchains, the Bank of France and the ACPR
By Éric ROSSIGNOL
In charge of quantitative analysis and of Innovation Laboratory (Department Securization at Crédit Agricole CIB)
and Xavier LAURENT
Member of the team Innovation and of the department Strategy & Business Transformation, and leader of the Blockchain Community (Crédit Agricole CIB)
The reason investment banks are designing so many prototypes using blockchain technology is that their business heavily depends on the trust they bring to customer relations. Trust is the driving force in blockchain technology. Till now, investment banks have seen this technology as an opportunity for curbing costs and delivering a better service to customers rather than as a threat. After all, firms still need a supplier of liquidity at the best price… Blockchains, a lever of digitization for investment banks
By Alain ROSET
La Poste
and François STEPHAN
Assistant general manager in charge of development and international affairs at the Institut de Recherche Technologique (IRT) SystemX
Some pundits are predicting that blockchains will deeply change the nature of trusted third party relationships. The digital revolution and the “power of the multitude” have made this possible. According to some experts, this new breakthrough technology has the power to radically alter business models, not only those that have prevailed for decades or centuries but also more recent ones. A historically trusted party for centuries now, the French Post Office (La Poste) has been staking out an ever stronger position on the Internet and in the field of digital trust services, thus warranting its role as a trusted third party in both the real and virtual worlds. Since 2014, it has invested in blockchain technology. In 2016, it formed a partnership with IRT SystemX, a research institute with industrial and academic credentials, the goal being to accelerate its cycle of innovation thanks to this new technology. How a long trusted institution, the French Post Office, is tackling blockchain technology with the help of IRT SystemX
By Gautier MARIN-DAGANNAUD
Engineering student at Télécom ParisTech – Institut Mines-Télécom and Master’s student at École Polytechnique, currently at Ledgys
Blockchains are a disruptive technology. To gauge its potential, we must understand how it operates by examining its original use for bitcoins. A blockchain is a distributed register, i.e. , a ledger divided among actors on a network. Like any register, transactions will modify entries in the ledger; and users must be identified. Unlike nearly all current registers however, a blockchain works without a central controlling authority… whence several issues and technical problems. How does a blockchain operate?
By Christophe WAIGNIER
Director of resources and strategy, Société des Auteurs, Compositeurs et Éditeurs de Musique (SACEM)
For fifteen years now, the music industry has been at the center of the digital revolution. Blockchain technology has stirred up debate among recording artists and other players in this industry, in both the United States and Europe. Start-ups and, too, traditional actors, such as the SACEM in France, are conducting experiments. The first results have attracted interest and opened new perspectives for collaboration among parties in the culture and entertainment industries. In the short run however, this emerging technology is still too frail to be used as a lever for accelerating the music industry’s digital transformation. Blockchains and smart contracts: A first round of feedback from experiments in the music industry
By Jurgen DSAINBAYONNE
Founder of Seezart
The art market is undergoing digitization. Several factors are at work: the impact of the new technology, the changing profile of art collectors (turnover of generations) and the 2008 financial meltdown, which, by upending the bond market, reinforced the view of art as a financial asset. Digitization has also exposed the flaws of a system that is, rightly or wrongly, deemed to be opaque and cliquish. Several scandals have broken out about intellectual property rights, authenticity and the origins as well as value of artworks. This is the context where blockchain technology, owing to its inherent properties, can boost confidence, make digital transactions secure and respond to the issues that have cropped up on this changing market. Artworks and blockchains
By Arnaud ROBERT
Director of legal affairs, Groupe Hachette Livre
Apart from a few experts and experiments, blockchain technology is still “promising”. Among these promises are the new uses owing to its purported characteristics: the qualities of being open but unforgeable and of being reliable even in the absence of a trusted third party to a transaction. The book market could make its digital activities much more efficient if this technology were to keep its promise of being an inviolable register, a secure means for transferring files, or even an automatic machine for authorizing, controlling and collecting royalties. For it to be the revolutionary tool announced, it must keep its most far-reaching promise, namely: being a peer-to-peer tool at everyone’s service instead of a toy in the hand of new monopolistic middlemen. Chains of books and blocks
By Malo CARTON
Engineer from the Corps des Mines, Agence des Participations de l’État (APE)
and Pierre JÉRÉMIE
Engineer from the Corps des Mines, head of the risk-prevention service (Direction Régionale et Interdépartementale de l’Environnement et de l’Énergie, DRIEE) in Île-de-France
Thanks to blockchains, decentralized registers can be designed; and trust in the validity of these registers, shared among concerned parties. Inherent in this technology is a decentralization of the data bases underlying blockchains. For public authorities, this decentralization marks a shift of paradigm away from the usual organization whereby public data are stored by public operators subject to close oversight. This article presents two fields where the application of blockchain technology is under study: a new chain of more fluid financial securities that are easier to control; and the possibility of keeping the records of easements so as to better inform buyers on the real estate market. Blockchains at the service of public authorities
By Stéphane BORTZMEYER
Engineer in the Department of Information Systems, Association Française pour le Nommage Internet en Coopération (AFNIC)
Several applications have been proposed for blockchains. In many cases however, the description of the actual use of blockchains is so vague that we are unable to assess whether or not it is reasonable to have recourse to this new technology. Blockchains are not useful for any- and every application. Herein, two widely discussed applications related to the Internet’s infrastructure come under discussion: computer logs and the registry of filenames. How to make a registry using blockchains? What are the advantages, problems and obstacles? Internet infrastructures and services
By Pierre-Alexis CIAVALDINI
Student-entrepreneur, École 42, and cofounder of BlockFest www.makernet.org
“Release early, release often!” This well-known saying in the computer world comes from The Cathedral and the Bazaar (1997). This basic book on the open source movement has shed light on the competitive advantages gained from this new vision of digitization. This philosophy, when applied to material objects, leads to designing a new model — distributed manufacturing — that will be made secure thanks to blockchain technology. France has offshored its cutting edge industries and lost much of its know-how in microelectronics. Meanwhile, electronics has become a form of craftwork in Shenzhen. As a result, dozens of new smartphones, called shanzai , are created day after day: a sort of open standardized hardware, which exists only in China. MakerNet proposes generalizing this model to other cultures through an ecosystem of distributed manufacturing, a possibility offered by blockchains. MakerNet: Distributed manufacturing
By Philippe GENESTIER
PhD in Microelectronics, Orange Labs
Loïc LETONDEUR
Engineer in R&D, Orange Labs
Sajida ZOUARHI
Engineer and doctoral student in information sciences and networks at Orange Labs and Laboratoire d’Informatique de Grenoble (LIG, INP)
Alain PROLA
Inventor/developer of applications for Androïd
and Jean-Marc TEMERSON
Research engineer, head of projects at Orange Labs, now retired
Given the growing use of objects connected through the Internet of things (IoT) and the increasing interconnection of heterogeneous systems producing myriads of personal data, our digital society faces new questions about: the decentralized and “mixed” administration of these things, resilience, confidentiality of the access to data, traceability of uses, etc. Blockchain technology replies by proposing: a decentralized organization, procedures for reaching a consensus that satisfies diverging interests, and a sharing of trust — since the trusted third party is no longer a single person. New opportunities will arise in a sharing economy based on social networks 2.0, where connected human beings and things will interact without any difference being made between the two. Blockchains can drop “anchors” between the physical and virtual worlds: an operation or transaction in the real world will thus have a counterpart in the digital realm. Though not answering all questions, blockchain technology is appropriate whenever trust, transparency and traceability are indispensable. Let us not fail to mention, however, what blockchains cannot do, namely: verify the authenticity of registered data or the legitimacy of “nonelectronic” operations. Blockchains and smart contracts: Prospects for the Internet of things and e-health
By Catherine BARREAU
Professor at the Faculty of Law and Political Science, Université de Rennes 1, IODE UMR CNRS 6262, Université Bretagne-Loire
Sooner or later, a technological innovation becomes a matter of law. Users of the innovation — those who benefit from it but also those who fall victim to it — demand regulations. Blockchains are quietly entering the legal world in the field of corporate financing. Smart contracts, though still of limited use, should soon join them. Since they are so complex that their development depends on a secure legal framework, the nature of this new sort of contract must be defined; and its uses, determined. Although most uses are private, we can imagine a public use by regulatory authorities… Regulating smart contracts and the regulator’s smart contracts
By Éric BARBRY
Attorney, director of the Digital Law Pole, Cabinet Alain Bensoussan Avocats Lexing
Smart contracts are not a new, nor the opposite of idiotic contracts. To tell the truth, they are not even contracts. They are a way of encoding a contract and making its application automatic, therefore, easier, faster and surer. Smart contracts rely on blockchain technology, which interests several branches of the economy: finance, music, and services involving middlemen, depositories or trusted third parties. Like any technique, smart contracts have advantages, but they also raise questions. What about security? And, too, programming errors? Smart contracts… and the law!
By Jérôme PONS
Consultant on digital technology and strategies in the culture and entertainment business and delegate on blockchain standardization at Music Won’t Stop
Contracts are omnipresent in the culture and entertainment business, in particular in the film, video and music industries. Nonetheless, whether passed with authors, producers, publishers or distributers, they are not always applicable or executed. The minimum sums guaranteed under a contract might transfer an “excessive” share of the value toward producers and editors; and the absence of legal metadata might reduce the amount paid to the rightful owners ( e.g. , performing artists). Is it utopian to imagine a contract that is programmed and executed automatically so as distribute a “fair” share of the value to the creators, producers, editors, distributors and consumers of digital contents and to provide a remuneration to the rightful owners that reflects consumption (via downloading or audience ratings)? Blockchain technology is part of the answer… Blockchains and smart contracts in the culture and entertainment business
By Vanessa RABESANDRATANA
Customer success manager, Ledger
and Nicolas BACCA
Chief technical officer, Ledger
Blockchain applications are evolving in a totally virtual environment that has been designed to be fully separate from the real world. Smart contracts, decentralized applications and cryptocurrencies have a limited hold on the physical world around us. We can even describe these two universes as existing on planes that are never superimposed. Each use of this technology thus raises the following questions: How can blockchain applications interact efficiently and in security with the real world? How can smart contracts tap external data with efficiency and in security? This sort of question cropped up quite naturally from the very first days of this new technology. Tools and interfaces thus had to be adapted. The trusted platform for relating the real world to blockchains has a name: Oracle. Oracles, the soft- and hardware layer of trust between blockchains and the physical world
By Olivier PEYRAT
Managing director of Association Française de Normalisation (AFNOR)
and Jean-François LEGENDRE
In charge of development at AFNOR
Blockchain technology has a considerable growth potential, since so many uses have been imagined, some of them now being deployed. It will be potentially disruptive, and probably become a strategic issue in several industries. However blockchain technology must first attain a certain level of maturity, whence the need to adopt standards for offering the necessary reassurance about certain aspects of the processes used. Why standardize blockchains?
By Jean-Pierre FLORI
Expert in cryptography, Agence Nationale de la Sécurité des Systèmes d’Information (ANSSI)
The security of many blockchain applications depends not just on the construction of a chain of blocks. It also depends on the specific characteristics of the application as it uses the data stocked in such a chain. In addition, it depends on the conduct of the entities involved in the expansion of a blockchain. Two flagships of blockchain technology are used to examine these various levels of security: the crytocurrency bitcoin and the virtual machine Ethereum. The security and insecurity of blockchains and smart contracts
By Arnaud MANAS
Engineer, PhD in Economics and History, associate researcher at Université de Paris I – Sorbonne (IDHES)
and Yoram BOSC-HADDAD
Specialist on the governance of emerging initiatives and steerage of the economy
In its canonical form, a blockchain eliminates trusted third parties from transactions, thus reflecting an ideological stance tainted with populism. This refusal of established institutions can partly be set down to the crisis of confidence in modern societies. Technological “solutionism” tries to establish trust through algorithms, without any legal or social grounds; but it is an illusion. Taking account of costs and risks, the use of blockchains without trusted third parties has little interest outside a few fields. In contrast, the use of blockchain technology by the institutions that serve as trusted third parties, within an established legal and social framework, is promising since active monitoring and oversight are an indispensable condition for benefitting fully from blockchains. Blockchains, a technological response to the crisis of confidence
By Matthieu HUG
Serial entrepreneur, cofounder and CEO of Tilkal
Les registres numériques distribués ( blockchain s) promettent de réinventer la confiance en rendant possibles des systèmes de notariat désintermédiés et décentralisés. Leur application à l’industrie financière, largement étudiée et commentée, pourrait modifier nos systèmes d’échanges basés sur des tiers de confiance. D’autres applications de ces technologies visent, quant à elles, non pas simplement à se substituer aux mécanismes de confiance existants, mais bien à établir de la confiance là où celle-ci fait défaut. Une application ayant un intérêt sanitaire majeur est l’assurance de la traçabilité des produits de bout en bout, depuis le fabricant jusqu’au consommateur : d’abord pour fournir au consommateur la transparence qu’il réclame sur ce qu’il consomme, et la conformité, dont il veut pouvoir juger, par rapport à ses critères de santé ou d’éthique. Ensuite pour lutter contre l’incroyable croissance de toutes les formes de contrefaçon, qui touchent toutes les industries, du médicament aux aliments pour nourrissons, en passant par les pièces automobiles.
By Louis-François PAU
Rotterdam School of Management and Copenhagen Business School
