Bitcoin, Crypto currency, Blockchain

Martin Quensel of Centrifuge: “Blockchain as a source of the truth”

Martin Quensel is one of the three co-founders of the Centrifuge. The Startup wants to bring the Financial Supply Chain in the Blockchain to eliminate inefficiencies and unnecessary middlemen. The founders have Potential, they have already demonstrated with your former company Taulia. Taulia is also to be found in the division’s Supply Chain Finance and 97 of the top 100 Fortune can count company to its customers. Why the Blockchain will revolutionize the industry, and what role should this Centrifuge, explains Martin Quensel in the Interview.

DApps and the reinvention of business processes

Please explain us briefly, what is Centrifuge, and what you’re up to.

We want to combine Public and Permissioned block chains in an open B2B platform, the Centrifuge OS. Any company or organization can have its identity. Based on that, relationships with suppliers, customers, partners, and define the transaction data, such as orders, products, payments, invoices or payment details. In addition, we, and each of the part of our Community to be decentralized applications, dApps, called, develop, and be able to offer. The funding of invoices is just one possible application.

This also explains our name. Like a centrifuge, we transfer the traditional business processes, to separate the essential ingredients and you can invent based on Centrifuge OS. It is not a question of improvement of these processes. The optimization potential, we have maxed out our previous company. The Blockchain allows for a new type of business interaction. This requires new processes and the Potential is, in our opinion, enormous, and today the approach is foreseeable.

Result of verification by Zero-Knowledge-Proof

How do you manage it as an Open platform, that the privacy of your customers is protected?

Currently Public block chains are apart such as Ethereum of cost, scalability and transaction speed, no Medium, businesses use business data such as invoices or orders to share. Sensitive information, such as prices or quantities would sooner or later be the same for All – even competitors – to be visible, if they are stored here permanently immutable. The Same is true for a Smart Contract, which maps the business relationships between a supplier and its customers, since it is executed on a decentralised basis on all nodes, and thus also access to the data processed.

We combine Permissioned Sidechains with a Public main chain. All data are publicly verifiable, but will not be saved to the public. The data exchange is always controlled by the node of the owner of the data, for example, the buyer in the event of an order. Smart Contracts will only be running on the participating nodes. Zero-Knowledge Proofs allow the verification of the results without having the Details of parts. This combination of a large part of already available technology, will enable each company to Centrifuge, to share all its data with all business partners in an open, decentralized network, without the data sovereignty and control to a Central switching point, or to lose the middle man.

New economic systems on the Blockchain

Now, you have already created with Taulia, a very successful company that is in the Supply Chain Finance area. Why are you attacking with a Blockchain solution to the market, the you have already for you taken?

We do not believe that we are well-established Supply Chain Finance (SCF) platforms, such as Taulia in the competition. That would make for us Centrifuge’s founder, also no sense. We, Philip, Maex and I are also founders of Taulia, and, of course, still share of Taulia.

The Centrifuge OS is an open B2B platform, where every company can communicate with each and share corporate data said, and the full sovereignty over its data. It offers, therefore, per se, no financing functions.

We plan, as a first application, a distributed application that allows the SCF providers, every company on the Centrifuge Blockchain-financing. Also, Taulia can open it on an equal footing with other SCF providers still closed network, as well as great financing functions for much more shopping to offer and selling companies.

The Blockchain allows for a completely new Token-based economic systems, the built if the right – as a stand-alone, decentralized, self-managing Structures work. This is reflected in the idea of a decentralized Autonomous organization (DAO, digital decentralized autonomous organization), and it is our Conviction that only through a radical new beginning with a new company – Centrifuge.

Where do you see the greatest added value that can offer the Blockchain in this market?

That’s a really tough question. There are so many more values, and to me, it is difficult not to mention the added value and many others. If I need to really specify on one or two, I would call digital identity and, based on the interoperability with the receipt of the data sovereignty, even if there are a lot of other equivalent more values.

Let me briefly explain why. Today, a bill exists, for example, often in half a dozen different systems, for example, in the logistics and accounting system of the supplier, the purchasing and accounting system of the customer, a platform for electronic invoice of the demand, or the Finance system of a Bank or a financial services provider with a correspondingly high clarification. Each participant saves in his or systems, or multiple copies. These are all different, because the used IT systems in use each have their own types and formats for the Transfer, storage and processing of data. Errors with the corresponding consequences for the everyday life, not the exception. The with the clarification and coordination costs are enormous.

The Blockchain as a source of truth or “Single Source of Truth” is a paradigm shift. The data in the Blockchain is decentralized for all participants at the same time and available at any time, without a single subscriber (Single Point of Failure) could manipulate the data.

Centrifuge cannot and will not financial trading venue or financial provider”

How do you make your customers use your Blockchain solution? It is not incredibly difficult to agree in the international trade Finance Standards?

As I said, we are not a platform for trade Finance, but “only” the values, i.e. Assets, on a much simpler, more secure way – in which the Individual or a Central authority must not be familiar with – about the Centrifuge Blockchain. Every financial provider, each funding platform, has today focus. This different offers according to topics, industries, instruments are available for a much broader base of Demand simple and transparent available. We provide the platform for exchange and representation of Assets. The Rest of the way, the financing, the provider as usual. Alone from a legal and regulatory point of view, this is also not different. Centrifuge can and will be no financial trading venue or financial provider.

Therefore, we also believe that it is not a Problem will be to convince customers. In addition, you can look to existing and already used solutions or financing or offer. The value of the Blockchain lies in the fact that the data are “re-usable”. A purchase order can be financed in part, which then can be success at the end of delivery and insured for the final invoice, there may be a Factoring. The data are provided by the Centrifuge OS. Re-connections or the Onboarding of the respective business partner is not applicable. The Centrifuge OS data base is to agree to all of the participants re-usable to the extent that the data owner.

Competition animates the business

You’re not the only ones to work on Blockchain-logistics solutions. For example, IBM is very active here and some of the pilot has projects in this area. You’re in competition with these established companies?

Yes and no. First, competition stimulates business. Every new idea, every new approach is welcome. Try and error are important to find the best ways to Rome.

IBM is a pioneer, does a great job with the Hyper Ledger Fabric and has done a lot for the acceptance of Distributed Ledger technology in the B2B sector.

We go with the Blockchain is the open, decentralized way. We believe that the potential Benefits of the Blockchain can only be so open. IBM’s Distributed Ledger approach relies on closed systems.

That is, we see ourselves as direct competitors. Market participants who prefer closed networks, and think that DLT is here with the solution, working with IBM. All who do not prefer open, decentralized solutions, rather.

A long way”

Is often claimed that Blockchain applications are to reach in the logistics faster with a commercial degree, as for example in the highly regulated fields of Finance and energy. Would you agree with that?

No, I don’t believe that, and can’t see it in the market. In addition to a variety of projects in the area of logistics, there are also very many Fintechs, and especially in the energy sector, the first Live Use Cases.

Logistics is also regulated. Customs regulations, safety requirements for transportation, storage, required shipping documents, etc. in the different law systems are just examples. It is rather a question of how the Blockchain can be combined with the necessary Regulatory requirements is useful. The Blockchain can unfortunately replace not yet existing and necessary regulations. This is still a long way with the legislature and the relevant government authorities. We entered this path with the first B2B Blockchain solutions. You are the impetus.

Looking to the future

We look in the year 2025. How big is the influence of the Blockchain technology in the logistics-sector? Then, all the commercial documents and financing via a Blockchain?

It’s hard to say. I don’t think it will in the long term be the case, I do not know whether this is already in 2025. By 2025 we will certainly have harvested the first fruits from the debate on Regulation and certain countries will certainly accept also from the Baltic countries or regions, such as perhaps the EU, Blockchain-documented processes as a replacement for today’s standard documentation.

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