Look Beyond Short-Term Crypto Volatility Toward Long-Term DeFi Disruption

Over the last couple of weeks, we’ve seen selloffs of both stocks and cryptocurrencies. However, we shouldn’t be surprised. And as with stocks, we need to look beyond the short-term volatility of cryptocurrencies to their long-term value.

Over the long term, digital assets, and their underlying blockchain technologies, are set to form the foundation for the online transfer of value. This foundation is as transformational as the original internet of information was to become. Through this lens, it’s clear that established financial organizations need to bridge traditional financial infrastructure with that of decentralized financial (DeFi) infrastructure to leverage the best of both worlds.

The idea that digital assets would be immune to the pressures faced by traditional financial assets was always a myth. Instead, the fact that cryptocurrencies and traditional stocks are now similarly impacted by inflation and world events reflects the increasingly mainstream role that these currencies, and their underlying utility, are playing in the global financial system.

Of course, we can’t ignore how all digital assets, including cryptocurrencies, have also been affected by fear and skepticism spurred by the questionable practices of Terraform Labs, which saw the collapse of its TerraUSD stablecoin and its sister token Luna. At the same time, it is important to put this in perspective. The biotech industry didn’t disappear because of the Theranos scandal, and Web3 is not going under because of Luna. If anything, the success of snake-oil sellers speaks to our deep desire to see these ideas come to life.

As we move forward, bridging between traditional financial systems and Web3 blockchains and services will be critical to building trust, compliance, and risk management infrastructure into DeFi solutions. Blockchain is a transformational innovation in providing immutability along with a new set of financial rails built on top of Web2.

Equally important is getting traditional finance, with its wealth of experience and systems, involved. A new generation of software is emerging, which is bridging traditional financial compliance and risk management with the ability to transfer value digitally.

Despite the short-term devaluation of cryptocurrencies, all signals point to them moving from the edge and into the center of everyday commerce and finance. This is the time for traditional institutions to start reinventing themselves for the new world by bridging their existing Web2 infrastructure and applications to the promise of decentralized finance and the tokenization economy of Web3. The BCware team has been building the foundations for this world since 2018.

Off-chain, on-chain integration – the paramount challenge for DeFi & legacy finance

DeFi is short for “Decentralized Finance”, an umbrella term for a variety of financial applications in cryptocurrency and Blockchain, geared toward disrupting financial intermediaries. DeFi aims to reconstruct and reimagine financial services on the foundations of DLT “Distributed Ledger Technology”, Blockchain, digital assets, cryptocurrencies and smart contracts.

DeFi has been evolving since the 2015 launch of the Ethereum network which initially laid the groundwork by introducing Blockchain-based smart contracts. Although DeFi applications have continuously grown since that time, the year 2020 witnessed a major upsurge of activity. In one year, the value of digital assets locked in DeFi smart contracts grew by a factor of 18, from $670 million to $13 billion while the number of associated user wallets grew by a factor of 11, from 100,000 to 1.2 million. This growth in turn has stimulated interest from both the private and public sectors as in the examples of MicroStrategy and Tesla’s investments in Bitcoin and strategic initiatives in the space by mainstream financial institutions.

While regulatory challenges represent barriers to early mainstream adoption, the technology requirements to integrate legacy financial systems with DeFi applications represent an even more formidable task. Scalability, reliability and high performance have always been non-negotiable requirements in the financial services world where every new technology is scrutinized all the way to its smallest moving parts before being accredited as production caliber. While the race is on for traditional large financial institutions to offer crypto and digital services to their customers, they are faced with the paramount challenge of integrating their existing infrastructures with a variety of Blockchain platforms and emerging DeFi services without compromising the aforementioned technology requirements of Wall Street in an optimal fashion.

Founded by a team of integration pioneers who digitized Wall Street, BCware provides a Blockchain integration platform addressing these very technology challenges above. The BCware platform delivers mission-critical grade solutions for the convergence of legacy financial systems with cryptocurrency and digital asset infrastructures with its unique differentiators:

  • High performance and scalable symmetric on-chain/off-chain integration and orchestration
  • Transparency and interoperability of the underlying Blockchain platforms

The diagram below depicts the BCware platform connecting the islands of the new finance world:

BCware’s unique architectural approach is centered around the following key components:

  1. BCflow: The workflow engine orchestrating on-chain/off-chain events using concurrent tasks and a publish/subscribe model for superior scalability, high performance and reliability.
  2. BCware Abstraction Layer: Providing a symmetric integration model for off-chain applications, existing and future DeFi services and underlying Blockchain platforms.
  3. BCware API Layer: Enabling the creation of new crypto and digital asset services for our customers.

The platform is further boosted for scalability and high performance via off-chain centric processing and optimized on-chain access.

Our mission is to be the de facto and ubiquitous integration platform between legacy financial systems and Blockchain powered DeFi infrastructures.

Bridging DeFi and Legacy Financial Systems with BCware

DeFi “Decentralized Finance” refers to a new generation of financial applications disrupting the market using cryptocurrencies. DeFi is built on blockchain, allowing participants on a network to immutably share data and the transaction history using a distributed ledger, meaning it isn’t controlled by a central source. Blockchain technology allows payments to occur directly between buyers and sellers, circumventing middlemen and thereby reducing costs for both parties. Blockchain also enables the transaction verification process, which is a significant cost center for banks today. In fact, Santander Inno Ventures estimates blockchain technologies can reduce banks’ infrastructural costs by $15–20 billion by 2022. DeFi is distinct because it expands the use of blockchain from simple value transfer to more complex financial use cases – a feature the e-commerce world and institutional banks will adopt, transforming the entire global finance system in coming years.

Early DeFi initiatives in 2020 are being driven by startups, typically issuing their own “stablecoins” – a type of cryptocurrency backed by an asset such as the U.S. dollar or Euro – to cut out middlemen from the services they offer to their customers. Stablecoins distinguish themselves from their highly volatile cryptocurrency brethren such as Bitcoin because their values reflect the value of the underlying assets to which they are referenced e.g., U.S. Dollars. While most of the early DeFi services are targeted towards cryptocurrency traders, a larger opportunity lies in settlements and transfers for consumers and businesses, signaling a dramatic transformation ahead.

Although DeFi seems to be a direct threat to the existing financial system and institutional banks, they are very likely to be beneficiaries of DeFi services as well. Complex financial transactions across banks will be simplified by removing middlemen, not only speeding up transactions to near real-time but also reducing fees, thus opening the doors for innovative new business models. Early adoption by banks will likely be in the form of using the services of the emerging DeFi innovators, but banks will start building their own DeFi infrastructures in order to remain competitive. JPMorgan’s recent announcements around JPM Coin and its establishment of a new business unit called Onyx to evangelize its blockchain and digital currency efforts exemplifies such a case.

While regulatory challenges represent barriers to early adoption, the technology requirements to integrate existing financial systems and applications with the DeFi world remain formidable.

At the top level, we see the following technology challenges:

  • A uniform and non-intrusive gateway into existing financial back-end applications
  • Integration with cryptocurrency exchanges
  • Transparency and interoperability of the underlying Blockchain platforms
  • Workflow orchestration across business boundaries

BCware has been addressing these technology challenges since it was founded in 2018 by enterprise integration pioneers who played a central role in digitizing Wall Street. BCware’s platform is built to enable Blockchain-powered business ecosystems, transforming multi-party processes and transactions. Our unique approach allows companies to harness the power of Blockchain by eliminating implementation and operational complexity.

The platform is fully API-driven with the following key features:

  1. API layer providing seamless integration with existing business applications
  2. BCflow core engine orchestrating and digitizing event-driven cross-company workflows
  3. Abstraction layer providing transparency and interoperability of the underlying Blockchain platforms

BCware is already working with DeFi start-ups providing infrastructural foundation for their technology and business including:

  • Vitreo, a security token issuance platform
  • Security token ecosystem linked to real-estate

BCware is committed to providing cutting-edge, mission critical technology to become a trusted partner to innovators in the DeFi industry. We take complexity out of integrating legacy financial systems with blockchain-powered DeFi, enabling our partners and customers to focus on their groundbreaking applications and creating new business models.

The Business Case For Blockchain

In today’s digital economy, superior operating models can only be achieved by optimally aligning innovative technology infrastructures with overarching business goals. Organizations are therefore in a perpetual search to simplify complex business processes with innovative technology and gain competitive advantage and flexibility. Blockchain and Distributed Ledger Technologies (DLT) represent a tectonic shift for global businesses, almost identical to the transformation driven by the Internet in the 90s.

The digital economy era’s business-to-business (B2B) relationships depend on sharing data and securing transactions in a complex world of global supply chains with numerous participants, services and integration points. However, despite the continuously evolving technology landscape since the Internet revolution, the B2B infrastructures have more or less been confined to the same first-generation core principles. Secure collaboration of business processes still requires complex application integration in an environment of multiple private siloes of data and manual interventions for reconciliation of information. Transparency, security and compliance remain key challenges while organizations are facing a data explosion and transaction volumes among a large number of untrusted parties during their digital transformation journey.

While enterprise business and IT executives recognize the enormous potential of Blockchain technology, they also need to rationalize and justify the benefits with minimum risk and business distraction. The most commonly cited hurdles for enterprise adoption according to recent surveys are:

  • Integration challenges with the existing IT infrastructure
  • Lack of internal Blockchain expertise and the associated cost of acquiring it
  • Concerns about current mainstream Blockchain platform dependencies and future interoperability issues
  • Uncertainty about scalability, governance of change and standards

But organizations cannot afford to miss out on the business opportunities that Blockchain technology opens up. Blockchain’s transformational nature sets the scene for new business models and relationships. As early movers capture the opportunity and the competitive advantage, followers will be seriously disadvantaged while they try to play catch-up.

According to a recent World Economic Forum/Accenture report, 51% of survey respondents identified “missing out on developing new products/services” as the number-one concern if they do not invest in blockchain technology in the near future. The other two most common answers were “missing out on speed/efficiency gains” (23%) and “missing out on cost savings” (15%).

We at BCware perceive Blockchain/DLT as a foundational enabling technology that needs to be completely transparent to the end-user. Enterprise IT staff do not need to know the internal working details of a traditional SQL database in order to put it into use. The same should apply to Blockchain as a distributed ledger. BCware’s Blockchain-agnostic approach allows us to use best-of-breed platforms while keeping an open door for future platform innovations without risking customer deployments for interoperability. With BCware team’s strong background as pioneers of enterprise integration, we provide a platform that integrates seamlessly with the existing enterprise IT infrastructure with near-zero effort on behalf of the customer.

The Blockchain-powered BCware Multi-Party Integration Platform is an enterprise-grade and industry-vertical agnostic Blockchain PaaS (Platform as a Service) to deliver on the emerging needs of the digital enterprise. Two key design principles govern the BCware high level architecture:

  • Plug-and-play integration with the existing enterprise IT infrastructure through loosely-coupled APIs
  • Blockchain platform-agnostic architecture through a fully decoupled and abstracted access layer

BCware’s approach therefore empowers enterprises overcome the major barriers in DLT adoption through the BCware platform architectural principles as depicted below:

Secure collaboration of business processes is at the heart of today’s very complex global supply chains. The management of these supply chains is a formidable challenge as the technology foundations of these systems have been stagnant around the same principles since the early Internet days. Blockchain offers an opportunity to solve the perennial issues that compromise supply chain effectiveness. A recent Capgemini survey identified the highest priority traditional supply chain pain points as:

  • Lack of traceability
  • Risks involved with multiple stakeholders
  • Lack of responsiveness
  • Abundance of manual processing
  • Regulatory compliance
  • Reconciliation burden

According to the same Capgemini survey, the following industry verticals are aggressively pursuing adoption Blockchain technologies:


  • Supplier contract management
  • Holistic view of assets
  • Production tracking
  • Recalled goods tracking

Consumer Products

  • Tracking provenance
  • Monitoring asset conditions
  • Regulatory compliance
  • Warranty management


  • Blockchain-enabled market places
  • Preventing counterfeit products
  • Tracking returned goods
  • Blockchain-enabled loyalty programs

The BCware platform has been designed and implemented with a vertical agnostic approach. We have also paid close attention to market business challenges that are likely to be early beneficiaries of Blockchain along with the early adopter industry verticals.

The Power of Unified DLT and Collaboration

I can’t believe it’s been 10 years since I wrote, blogged and presented the concept of Collaboration-Enabled Business Applications (see an example here). It’s fascinating to see that, while we’ve extended the range of integration between business process management and collaboration applications (as in voice, video, messaging and emailing), a more thorough integration that logs the complete set of data and knowledge worker communication that fuel digital, collaborative business processes remains elusive.

In another blog around that time, I wrote: “The problem with the work flow for knowledge workers is that, while it structures an activity and captures the documents we produce as part of that, it fails to capture what we could call collaboration metadata. And the latter is of vital importance to improve knowledge worker productivity.” And that shortfall still hampers collaborative business processes.

I have used the term “collaborative business process” twice, and while the term seems self-explanatory, it deserves to be defined: whether within a company or an ecosystem of partnering companies, we observe critical revenue generating business processes that depend on knowledge workers sharing information, communicating and reaching quick consensus to drive mutually beneficial outcomes.

The problem is that these collaborative business processes, which just happen to be the very lifeblood of the digital economy, remain fragmented: every participant keeps their own representation of the truth based on several sources, which may include:

  • Data kept in a local repository that other participants in the business process have no visibility into other than when shared in a meeting or any other collaborative effort.
  • Video, voice or email communication to exchange information, and which sometimes leads to business process participants to update their local data representing what they perceive to be the current consensus in the state/stage of the business process.

In a nutshell, there may be as many unreconciled versions of the state of the business process as there are participants, data repositories and collaboration tools. And each one is a multiplier when it comes to the number of resulting “ledgers” (ie sources of truth).

Unfortunately, from a business process architecture perspective, this creates several problems that can slow down and even cripple a collaborative business process. The fundamental issues include:

  • Unsynchronized data ledgers: Each participant in the data process logs their personal interpretation of the business process in their very own, insulated data ledger.
  • Uncorrelated data ledgers and collaborative events that drove the update of local data: the live meetings, the email exchanges and other communication that took place to drive the update of data is never correlated or kept track of as part of the business process.
  • The drift that happens between locally kept data ledgers and individual interpretation of the collaborative exchanges very often leads to the participants’ local perception of the state of the business process to eventually state their disagreement with the updated state of the business process.

The combination of the three factors above costs the digital economy billions of dollars a year in lost productivity. As soon as locally kept ledgers diverge and the communication that led to that divergence can’t be tracked reliably (which is impossible to do unless you find a tool to integrate both data and collaborative elements of the business process), the collaborative business process comes to a screeching halt. And without a way to log every step and every exchange of the collaborative business process that lead to the current state of conflict, the business process will get reset to stage zero. And costly audits to reconcile the privately held ledgers will be needed. The overarching human communication that led to that state will simply be forgotten because it wasn’t tracked.

The fundamental problem is a lack of a secure, trusted infrastructure technology that all participants in a shared, collaborative business process can trust. Hence everybody maintains their own private ledger, and the reconciliation layer is human communication, which can be both inexact and open to interpretation.

But now a silver bullet to address the needs of collaborative business processes is making it into the mainstream: Blockchain technology.

With Blockchain technology, it is possible to immutably record every exchange that drove a data update. It is easy to give every participant 100% up-to-date visibility into the current state of the collaborative business process: every update of data and the rationale for it. Including, and this is key for Unified Communications integration into a business process blockchain, all related collaborative exchanges between the knowledge workers driving the business process, be it via voice, video, email, messaging or any other means.

The integration of business process systems and unified communication applications has been elusive until now. Blockchain provides the foundational technology to finally, securely, indelibly link the entire track that drives the collaborative business process. For example, every participant would be able to easily see a critical update to shared data and click on a link to see the exchange that drove that update.

That also means the business process never needs to reset to zero to reconcile it with a state of truth. The last, mutually agreed upon logged state of the business process will always be there, and the business process only needs to reset to the immediately previous state, saving every participant time and money.

The integration of business process data and the overarching collaborative tools that drive it is a very powerful tool in the digital era. It does represent a silver bullet for knowledge worker productivity as well as to ensure data integrity and compliance.

It is safe to predict that very soon you will witness how Blockchain technology becomes an integrating, record-keeping link between business process data and the various knowledge worker collaborative tools that drive that drive the updates to such data.

Blockchain as the Engine for Collaborative Business Process Acceleration in the Supply Chain

We haven’t blogged for over a month here a BCware.io – we have been busy! We’ve written about Blockchain technology in Networking and Blockchain’s differences vs Relational Databases (which rule and will continue to rule privately held ledgers). And now, let’s talk about the elephant in the room: there is a back and forth debate about whether Blockchain is needed at all in some quarters, because a contrarian view is always entertaining – and because Blockchain technology over-relied on crypto-currencies as a success story – and we all know that’s not been going that great lately. (My personal option is that you should have never called something a currency that by nature is a speculative stock, but that’s a discussion for another day and has nothing to do with the underlying technology.)

This post is about talking why the success of Blockchain is inevitable: it’s a technology that helps overcome many of the bottlenecks that fuel collaborative business processes – and in our digital knowledge worker economy, which revenue-generating business process does *not* rely on a collaborative approach? Between intra-company departments, between partner ecosystems, between customers and sellers? Let’s face it, the digital economy is about vanishing boundaries in the business process, and anything we can do to accelerate and secure such business processes has a direct impact on an enterprise’s bottom line.

And a painfully common pattern in collaborative business processes is the fact that they fall out of synch, come to a screeching halt, and require resolution via mutual, slow approval to move forward. This is common in sales processes, where product teams and sales teams need to approve special offers, and (as a subset) especially in any supply chain ecosystem.

Supply Chain

Why supply chain?

It’s a classic collaborative business process use case: it involves several participants, several companies in the ecosystem, several private ledgers representing the local viewpoint of the data pertaining to the joint business process. Enormous efficiencies can be set free, and billions of dollars in locked-up inventory can be freed if the supply chain system business process could be accelerated. And what is most needed in a supply chain ecosystem? Ideally, it is rapid convergence to mutual consensus across the entire supply chain, from keeping inventory to fulfilling an order among all the participants that have invested resources.

Optimizing the supply chain is a complex exercise. Think about a successful smartphone manufacturer launching a model. The enormity of this multi-billion $ cycle that is repeated year after year, and on which $B++ success relies upon, it amazes me every time I think about it. And I know that, if you were the head of said smartphone manufacturer’s supply chain, you wouldn’t just say: “Hey, last time we sold 300M phones, so I’ll just do a hard pre-order for $10B for all the stuff my suppliers sent me last time”. It’s a big gamble, and you better have a very understanding boss if your one-dimensional scenario planning goes wrong. So no – no one does it in a supply chain these days. The collaborative supply chain business process has been optimized to an amazing degree.

That said, huge surprises still happen because of the nature of the supply chain business process, and because the private ledger reconciliation still happens based on pretty raw macro data. And because of that, the supply chain doesn’t feed the market demand optimally. Shortages or oversupply happens. The supply chain is a closed loop system, right? What causes oversupply or shortage? Simple: a sub-optimal feedback cycle, which is either too slow or inaccurate or not granular enough.

The situation in the supply chain is simple: you have participants with private ledgers, whose business results rely on keeping their private ledger as accurate as possible, as quickly as possible. And yet, the synchronization between these ledgers is nowhere near automated, is not open. It relies on typically weekly forecast meetings (daily internal meetings and a war room if you’re a smartphone supplier) between those involved in the supply chain. Which results in a data-driven, yet slow converging of the many ledgers involved in the supply chain. Let’s say our smartphone manufacturer’s new phone model is super-successful and they ask their supply chain to up supply by a factor of four right away… their traditional suppliers would go “What? That sounds like a gamble given our traditional ramp up? Can you provide data and really commit and prove it to me? I’d have to make potentially revenue impacting changes, and this looks risky to me. Let’s have a meeting next week, I need all our and your stakeholders to come together and commit”.

There it is: a classic business process that comes to a screeching halt just as huge mutual success is there to grab. But no: agendas of CEOs need to be aligned, new agreements signed, very nervous top executives in the supply chain need to make decisions on a current short-lived demand trend they are already failing to satisfy.

What could make this easier?

A distributed shared ledger, of course. Blockchain technology. Imagine it: it provides every participating company with an open yet secure platform to constantly share and update the collaborative business process with real time data, and get near-immediate visibility into collaborating partners’ view of it! The power of a securely shared, mutually approved shared ledger in a supply chain ecosystem can not be overestimated. That is why Blockchain tech is quickly revolutionizing the supply chain.

So, yet again, you may ask: “This makes total sense, so why isn’t everybody doing this right here, right now?”. And as often in IT these days, the answer is: we’re too busy dealing with the stuff we have. Maintaining it. Upgrading it. Fixing it. Who has time to write code for an intra- and inter-enterprise Blockchain message bus that reconciles privately held ledgers? Can I afford my top architects to take 3 months off to become Blockchain experts?

We all know the answer: no. The alternative question for an architect is “Can I plug into the benefits of this shared ledger technology via RESTful, reusable APIs I can intuitively integrate into my current private ledger, can I augment it with Machine Learning and define policies on when and how to share to the distributed supply chain ledger?”.

The answer to the latter is a resounding yes, provided you pick BCware.io as a partner. Let’s work together on augmenting your supply chain with DLT technology.