Blockchain can basically be used to securely tag, track and trace almost any digitalized item. Says Harel: “One of the trends we’re seeing is that we used to have mostly blockchain startups but now we see companies that are utilizing blockchain for their business objective… We’re seeing it with merchants, goods, diamonds, art, shipments.” It is also thought to have potential for use in tracking intellectual property and digital rights, for example in music.
As for the sector’s importance to the overall Israeli high-tech industry, he says it has great potential, although a lot of it will be so integrated into other solutions that it will be hard to define it as purely blockchain. “To say that it will have the same percentage as cyber, or automotive or fintech, probably not but as a niche that is driving other industries and is providing out of the box innovation, we think it has in Israel huge potential.”
Apart from the obvious cybersecurity-related cryptography aspect that makes blockchain a good fit with Israel’s high-tech industry, it also fits with the country’s financial technology sector. Roy Keidar, at the Yigal Arnon & Co. law firm in Tel Aviv, has been following blockchain development in Israel for years.
He emphasizes the fintech aspect: “A lot of Israelis work in the fintech industry and they’re looking for additional and innovative ways of doing business and getting cash, finding investments, doing crowdfunding, you have a lot of that in Israel.”
But security issues and regulation still have to catch up, he says: “There’s not enough certainty, which keeps some of the investors away but as usual, the movers and shakers, the early adopters are really into it.”