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Martin Quensel from Bitcoin loophole Centrifuge: “Blockchain as Source of Truth”

Martin Quensel is one of the three co-founders of Centrifuge. The startup wants to bring the financial supply chain to the blockchain to eliminate inefficiencies and avoid unnecessary middlemen. The founders have already proven their potential with their former company Taulia. Taulia is also part of the Supply Chain Finance division and can count 97 of the 100 Fortune companies among its customers. Martin Quensel explains in an interview why the blockchain will revolutionize the industry and what role Centrifuge should play.

DApps and the reinvention of Bitcoin loophole business processes

We want to combine public and permissioned Bitcoin loophole blockchains in an open B2B platform, the Centrifuge OS. Every Bitcoin loophole company or organization can anchor its identity. Based on this, we can define relationships with suppliers, customers, partners and share transaction data such as orders, goods receipts, invoices or payment details. In addition, we will be able to develop and offer decentralized applications, also called dApps, to anyone who wants to become part of our community. The financing of invoices is only one possible application here.

This also explains our name. Like a centrifuge we relocate the conventional business processes, separate the essential components and reinvent them building on Centrifuge OS. We are not interested in improving these processes. We have also exhausted the optimization potential with our previous companies. The Blockchain enables a new kind of business interaction. This requires new processes and the potential is gigantic in our opinion and only foreseeable today.

Zero-Knowledge-Proof for result verification

As an open platform, how do you manage to protect the privacy of your customers?

Apart from costs, scalability and transaction speed, public blockchains like Ethereum are not yet a medium with which companies want to share business data such as invoices or orders. Sensitive information such as prices or quantities would sooner or later be visible to everyone - including competitors - if they were permanently stored here. The same applies to a Smart Contract, which maps the business relationships between a supplier and its customer, since it is executed decentrally on all nodes and therefore has access to the processed data.

We combine Permissioned Sidechains with a Public Mainchain. All data can be verified publicly at any time, but is not stored publicly. The data exchange is always controlled by the node of the owner of the data, for example the buyer in case of an order. Smart Contracts are only executed on participating nodes. Zero-Knowledge-Proofs enable the verification of results without having to share the details. This combination of technology, most of which is already available, will enable any Centrifuge company to share all its data with all its business partners in an open decentralized network, without losing data sovereignty and control to a central hub or intermediary.

New economical systems on the blockchain

With Taulia, you have already created a very successful company that is active in the supply chain finance sector. Why are you attacking the market you have already captured with a blockchain solution?

We don't believe that we compete with established Supply Chain Finance (SCF) platforms like Taulia. That wouldn't make any sense to us Centrifuge founders. We, Philip, Maex and I, are also founders of Taulia and of course still have a stake in Taulia.

The Centrifuge OS is an open B2B platform where any company can exchange and share data with any company while retaining full control over its data. So it doesn't offer any financing functions per se.

We're planning the first use case to be a distributed application that will allow SCF vendors to offer blockchain financing to any company on the Centrifuge. Taulia can also open its closed network here on an equal footing with other SCF providers and offer its great financing capabilities to many more buying and selling companies.