Brexit Blues: Why Dublin is Turning Into a Haven for Blockchain

In the wake of Brexit, the Republic of Ireland could become the go-to European hub for FinTech companies, and among them, its many specialists in blockchain technology.

Following the UK's leave vote, Dublin was found to be the second most attractive financial center in Europe by a PwC survey – and although London still topped the poll, uncertainty over the terms of Britain's exit from Europe make the Irish challenger more appealing by the day.

Besides a specialization in financial services, Ireland is already the European outpost for many of the most influential tech companies in the world today.

In Dublin's Grand Canal Dock area, now dubbed 'Silicon Docks', are the European headquarters of Google, Uber, Amazon, Airbnb, Facebook, LinkedIn and Twitter, each employing large numbers of highly skilled technology workers who are concentrated in the region.

The evolution of the strong tech industry that exists in Ireland today can be traced back through many years of work by IDA Ireland – the governmental agency responsible solely for attracting foreign direct investment in the country, and which has worked to provide tax breaks, logistical support and other incentives to create a favourable environment for business.

Today, the fertile ground that has been created by the co-presence of the financial and technology industries is being recognized by companies based elsewhere, at least according to Keith Fingleton, chief technology advisor for IDA Ireland.

He told CoinDesk:

"We have a number of US companies that have come here to set up R&D centers, with the research being sent back to the States in a lot of cases. And the reason they’re coming here can be summed up in one word: ecosystem."

This ecosystem involves far more than just the big tech players – equally important is the mix of startups, university departments and research centers that occupy other crucial points on the spectrum.

As an example of the latter, Fingleton points to the Insight Centre for Data Analytics, a government-funded initiative employing hundreds of data scientists whose services are made available to local businesses.

Private sector responds

One of the many companies to respond to these incentives has been professional services provider Deloitte, which elsewhere has shown considerable interest in blockchain technology.

To date, Deloitte has so far invested London-based startup SETL, experimented with running a bitcoin ATM and developed an ethereum-based identity platform, among other projects.

Recently, the Dublin-based branch of Deloitte was named the firm's centre of excellence for Europe, the Middle East and Africa (EMEA), a decision made partly on the strength of the tech ecosystem which the branch was able to access.

Lory Kehoe, a FinTech specialist at Deloitte and the EMEA blockchain lab lead, said:

"We had some clients who wanted to explore with us, we were part of the ecosystem here in Dublin and Europe, and we'd published some thought leadership on the subject – that put us in a good place [to become the centre of excellence]."

Besides being given the internal award, interest from the international blockchain community spiked recently in the wake of a blockchain hackathon that Deloitte co-sponsored last month.

The event attracted over 150 participants and delivered €10,000 in cash prizes – with the judges giving the winning prize to a team comprised of Deloitte employees.

"After we did the hackathon in November, and got so much global attention, that was the real ignition for us, and it really got things up and running," said Cillian Leonowicz, business development lead for the blockchain lab.

Following the hackathon, Deloitte was approached by the Bank of Ireland for help with assessing blockchain use cases and building a prototype based on the technology.

The outcome was a proposed solution to a challenge faced by the bank in relation to MiFID II – a new piece of European regulation of financial products and investment which, where applicable, requires that every interaction with a client must be tracked (and where the use of a distributed ledger could potentially save time and money).

And besides just benefiting from the ecosystem that already exists in Dublin, Deloitte hopes to strengthen it by building a blockchain lab, announced earlier this year and scheduled to open in January 2017.

Part of this lab will be a workspace area where up to 50 blockchain-focused developers or startup team members will be able to work, bringing one more nexus to the community and reinforcing Deloitte’s place as an influential connector.

Ecosystem growth

Kevin Loaec, managing director of blockchain consulting firm Chainsmiths – the organiser of the previously mentioned hackathon – moved to Dublin five years ago in search of somewhere that offered a buzzing tech scene and affordable living costs.

Loaec says that the high concentration of tech-minded people meant there was an underlying interest in bitcoin years before the mainstream surge, and at the same time, the small size of the city has always been conducive to forming a tight-knit scene..

"We all follow what each other is doing, we help each other, we even work from the same coffee shops. It's like everyone is a friend in the bitcoin community here," said Loaec.

This friendly attitude sometimes spans bridges between otherwise rival companies: as one example, the Irish Blockchain Expert Group – an informal association of key players in the field – brings together employees of both Deloitte and PwC, usually considered strong competitors.

And as the ecosystem grows, the network effect of industry concentration becomes self-reinforcing, with Dublin attracting more and more interest from within Europe and further afield.

Where FinTech is concerned, Keith Fingleton of IDA Ireland sees a bright future:

“Financial services companies are looking at technology and data in a new light, as something that can be of real strategic importance. We know there’s a shortage of high-end developers worldwide … People are asking where can we find them, and find them at the right price point, and we say: we’re the solution.”

Dublin image via Shutterstock