It is incredible to think that the first website was launched by Tim Berners-Lee, on 6 August 1991. We have come a long way from that first basic website, with the World Wide Web (WWW) evolving into what we have today. In the last few decades, there have arguably been distinct generations in the WWW journey from the Basic web lasting about 10 years, to the next generation of the web being characterised by the Social Networking phenomenon.

We are now ready for the 3rd evolution of the Internet, which may be characterised by the Internet of Things (IoT) and possibly Distributed Ledger Technology (DLT), often called blockchain technology.

The growth and early adoption of the Internet was fuelled by those who recognised its potential as a business channel, which in turn lead to the development of online payment mechanisms to support this e-commerce. There were many teething problems along the way and some businesses flourished, while others failed, as a result of not reinventing themselves to take advantage of this transformational phenomenon.

Today, we once again face a similarly revolutionary technology made famous by the Bitcoin cryptocurrency. The public Bitcoin blockchain runs on the internet, and again one can argue that the internet enabled the invention of Bitcoin blockchain technology. Since its first launch in 2009, there have been many variations on the DLT application. Hardly a week goes by without an announcement on a Proof of Concept (POC), across all levels of business and society. DLT has been touted as the technology to solve everything, from world hunger to eradicating traditional banks and financial institutions. It is then no surprise that DLT start-ups are mushrooming everywhere, with billions of dollars being ploughed into this area by big business, governments and venture capitalists alike.

DLT and the trough of disillusionment

If we look at the Gartner Hype Cycle for 2016 – DLT (as blockchain), has been positioned at the top of the Hype Cycle slowly sliding into the trough of disillusionment. So why is there such incredible interest and excitement for this technology? Why are organisations ploughing millions of dollars into investigating DLT? Can this be a case of being caught up in the hype and fear of being left behind perhaps?

DLT is complex, it essentially gives us a synchronised shared ledger that multiple parties believe represents the single truth. DLT relies heavily on complex encryption technology to render it immutable and because it is decentral it is further secured.

This engenders trust in the contents of the ledger from participants. How it works technically is probably less important than the problems its use solves or the new opportunities it creates. In the early days of the Internet – how TCP/IP (Transmission Control Protocol/Internet Protocol) worked technically, was really only of interest to the appropriate audience of technical developers. The technological wonders of TCP/IP were hardly a boardroom topic.

Many DLT POC's today are driven by teams of enthusiastic technology developers, with senior business stakeholders often oblivious to what they are really trying to achieve from a business benefit point of view. As with any emerging technology – business needs to see the potential value. As history has shown in the evolution of the Internet, it is economics that will ultimately drive the growth and adoption of DLT. The dilemma is that the technology and its benefits are still unknown and there will need to be an element of investment to identify any potential benefits.

DLT is widely regarded as transformational in nature as the Internet was. That, by definition, means that many players will be impacted by this transformation. The regulatory, legal, organisational, governance, business model, operational processes, technology and a host of other challenges will have to be taken into account before the widespread adoption of this technology. DLT is therefore but one component of a much broader agenda, not an application by itself but rather a foundational platform for building specific applications such as smart contracts.

The conversation is less about the actual technology and should be more around the paradigm shift that this new platform enables.

Fundamentally DLT has the potential to remove the middle man since most organisations today are process centric within their own realms. DLT is all about being decentral and collaborating with actors outside your traditional boundaries. This requires a complete top down and bottom up rethink of traditional value chains, and inevitably involves strategic collaboration with industry counterparts outside of your organisation. This leads to the question of emerging standards and interoperability.

While great strides are being made in this area with major players starting to develop platforms – there is still a long way to go and one needs only to look at the Betamax vs VHS debacle to understand the importance of this aspect.

Is a "wait and see" strategy the appropriate one for DLT adoption?

While some organisations are adopting this approach, there is considerable evidence based on the history of the Internet, that early adopters are better positioned to take advantage of evolution in technology as it inevitably progresses. Like it or not – DLT is here to stay and if nothing, it has at least made us aware of what can be possible if the technology is used appropriately. Financial institutions, in particular, have been awakened into action to explore potential efficiencies that early DLT can bring to their industry.

The key considerations to make when embarking on the DLT journey:

• Start the conversation in the boardroom.

• DLT should not be regarded as a silver bullet for everything – there are some heavily centralised processes and business problems that are best solved by existing traditional technology.

• It's not about the technology only – this is but one part of the bigger agenda. Get the appropriate roles players – industry, regulators, legal, technology, governance, business models, and operational processes all collaborating to increase success.

• Embrace a paradigm shift – DLT requires a fundamental shift in thinking from central processes to decentral processes outside of your organisational boundaries.

• Have a short, medium and long-term strategy.

• Be aware of emerging standards and lack of interoperability.

• Start with a deliberate business case.

• Do not be constrained by today's structures or problems that were probably created due to lack of appropriate technology in the first place.

• Projects that are executed in bite-sized logical chunks have a better chance of early success.

• Don't go it alone – collaborate.

• Regard it as a foundational technology – it is not an application on its own but rather the basis for an application.

• Identify an appropriate technical partner.

• Be aware that it may not be production ready.

• Be aware of funding and governance issues when operating outside your organisational boundaries.

• Back the right horse that will stay the course i.e. VHS / Betamax.

• Treat your journey as incremental rather than revolutionary.

• Learn and make corrections continuously.

• Contribute lessons to the DLT community at large.

DLT could potentially be the basis of the next generation of the internet by enabling an internet of value, where we, one day, exchange value directly on a peer to peer basis as easily as we exchange data today. When it comes to DLT the central theme is indeed all about being decentral.

By Ashwin Goolab, Financial Services Africa Director at EY.