darwn Expert Talks: Claudio Tessone (UZH Blockchain Center)

darwn Expert Talks: Claudio Tessone (UZH Blockchain Center)

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Hi everyone. My name is Dario. I'm the product  manager of darwn. For those who don't know,   darwin is a platform for blockchain and  crypto enthusiasts aiming to provide   the necessary knowledge, access and  tools to succeed in the crypto market.   On darwn, you will find crypto service  providers, educational courses, news,   market data and much more. Just follow  the link in the description below.  

Today, I'm happy to be joined with Claudio  Tessone. Claudio is a professor of blockchain and   distributed ledger technologies at the informatics  department, University of Zurich. He's also the co   founder and chairman of the Blockchain Center  at the University of Zurich, Switzerland's   largest and most active blockchain hub, and  has written more than 20 papers in this space. Claudio, thank you so much for  joining me today. And first of all,   congratulations again to the University of  Zurich for being ranked third worldwide in   coindesk's 2022 best blockchain universities  ranking, certainly a great recognition for the   University of Zurich and no doubt also linked to  your accomplishments with the Blockchain Center.  

Thank you very much, Dario, for the introduction  and thanks for these words, really appreciated.   Let's start at the beginning. So, when and  how were you first exposed to blockchain   technology and what in particular  fascinates you about this technology? Yeah, I was first exposed to blockchain  cryptocurrencies back then, in 2013. I was   a postdoc at ETH Zurich in the Management,  Technology and Economics Department. And I   was doing research on a socioeconomic networks  and sitting discussing with other team members,   by the coffee machine, other people told me about  this Bitcoin thing that was a kind of new payment   system with its own unit of account. And it was,  in a way related to the kind of research that I   was performing back then. And the more I learned  about them, the more I like thinks about them. On  

the one hand, the first thing that did and this  is why I wrote a paper on this topic in 2014,   I was fascinated by the fact that you  have a full economy who's in which   the only history of transactions were  recorded inside of this ledger, then   it looked more into this thing that I saw  that actually, and this is what fascinates,   still the most to me, related to blockchains and  all the solutions that are built on top of this,   is the fact that there are very few  systems in which the incentives are   written inside of the design of the platform,  so openly. And the outcomes are so driven by   these kind of things. And by outcomes  here, I mean, the economic functioning,   also the adoption, and multiple other things.  So now, what fascinates the most to me about  

these solutions, they're not only technology  is the interplay between design principles,   incentives, that are placed in between  and the outcomes that these systems have. Thank you very much. So, you  mentioned that you were involved   quite from the beginning. Since your  introduction to blockchain in 2013,   what has been the most interesting or exciting  industry developments since then. Do think is   there any current developments underway  which you feel is especially promising? I think that we have a there has been so much  water under the bridge with these eight years,   that it is very hard to find a specific moment  I think that all the the rise of Ethereum and   then all the third generation blockchains  that completely changed the incentives but   also serve as a as a full platform to deploy the  apps, DAOs and many other solutions that are much   more sophisticated is very interesting. The rise  of DeFi is a second point in which it was very   interesting to be there and this kind of field  never stops rising many interesting questions that   in general, are not immediately answered by the  solution that are inside. And with respect to the  

developments, I think that on the one side, this  push towards harder notions of identity inside of   the systems are particularly interesting to me. I  am interested, we will see how it plays out later   on, this transition of Ethereum to proof of stake.  It is from the research point of view, it's been   interesting because this is the only platform that  has migrated. And we will see how successfully   in some time from now, from a proof of work  restating which everybody can participate in   the consensus, towards a one which only  produces stakeholders can participate in   the consensus. This is also something that  is interesting. And the other thing is,   I think that novel usages of NFTs are going  to be interesting as well in the future. And   this I link this with the previous answer that  I gave with respect to identification. I think  

that proof of achievements and these kinds  of things, even certifications stored in some   way in blockchains, will be an interesting  aspect that we'll see in the near future. Right, thank you so much. So speaking again  of the Blockchain Center I understand that   the Blockchain Center started its activities  about five years ago in 2017, before formally   establishing in a Competence Centre in 2019, and  the organisation it is today. So, can you tell us  

how the organisation was created back in 2017? In  particular, what were the circumstances that led   to the creation of the blockchain-focused  organisation at the University of Zurich? The reason is one thing that I like very  much of the University of Zurich is that   the broad areas of expertise that the that the  members of the faculty the professors have. We   have seven faculties, that encompass from  art and social sciences, theology, to law,   in business, economics, informatics that  these are order a faculty. And back in 2017,   there was an era that was very interesting,  once again, that was on this period in which   a lot of ICOs were taking place, there  was this first wave of tokenization, and   chatting in assemblies of the faculty, for  example, we met a lot of professors who are   from completely different angles, people that were  looking at this from the financial point of view,   people that were looking at it from the  technical point of view, people that were   looking at this from this, the two angles in  between data science, like I do, in some sense,   we found that there were a lot of professors  who were interested in these new developments   in blockchains. And these, and a later we also  found that actually, there were many professors   in the law faculty as well, were interested. So  in 2017, we started as an informal club, this is   the word that we use to back then, of professors  that we'll just meet here and there and to see   what was interesting to us. We started to  have a some events and we saw that actually,   there was a lot of traction and that many of us  were very interested in pushing forward the the   development of something that is more formal. And  this is how in 2019, we applied to the faculty and  

to the University Board later to be recognised  as a competent centre. And this kept attracting   even more and more professors to join the  Blockchain Center, which I'm really happy with,   and I really value their time. And on the  other side, we were also looking into,   we also continued to widen the scope of our  educational offerings, not only to our students,   but also to students abroad that are abroad,  that can also benefit from the education   that they have the University of Zurich. We  also extended our programmes to people from   industry as well we have a CES in blockchain and  then a that we continuously have. We will have   another edition in spring 2023. And we continue to  interact with them more and more with industry and  

so on. And that's also something that being  in Switzerland is particularly beneficial. 9:43 And what were the goals   at the time and how has the organisation and its  goals also within changed or developed over time?   So on one hand, you mentioned  the educational topic. I think that we   have three main a goals as an organisation. One  of them, obviously because we are a university,   is a to provide a complete educational  offering, be it for our students, be it for,   as I said as well, for students  all around the world, for industry   leaders undergraduate students post-graduate  students. The second goal that we have is to  

coordinate research at the University of Zurich  in this space, but I repeat a concept that I said   before and that for me is fundamental in order  to properly understand blockchains which is in   order to understand them, you cannot approach the  problem from a single disciplinary point of view.   Blockchains have not just the technology are not  something that they solved in the computer science   department. Partially yes, but not only. There  are insights that you can gain from people from   law and regulation, professors there in the law  faculty are particularly important in this setup.  

You also have as I said before, as well incentives  but also business models, financial aspects of   valuation of crypto assets, and in order to do  that, you need a completely interdisciplinary   approach. So, the role that we have as  coordinating research is coordinating research   from a completely interdisciplinary point of view.  And the third role that we have as Blockchain   Center, the third goal is to a act as a single  point of contact of the University of Zurich with   set of parties, be this industry be these other  peer institutions, academic institutions, we have   several memorandums of understanding a that we  are signing with a key players worldwide, and also   government, and society as a whole. Okay, we will,  for us outreach activities are important, as well. You mentioned one of the core functions of course,   is research. Obviously, the crypto market is  a very fast moving environment. What are some   of your recent research topics and how have those  topics also developed in the blockchain industry? I am very interested in three aspects   of blockchains that are a heavily intertwined. On  the one hand, and mirroring my original interest  

in blockchain, I am very interested in that area  that now, you can call it blockchain Analytics,   which is looking at the data that you  see inside of these public Ledger's,   because in the blockchain, you have all the  transactions in which the assets exchange hands   and try to understand the economic processes  that happen due to this exchange of value.   I am very interested in processes like  centralization or concentration of power   in blockchain-based platforms but also  in token economies. I am a interested in   forensic analysis of a blockchain because at the  end of the day, you can always follow the money   and understand who are the previous owners and  for that you need to develop methods to detect   which are the families of addresses that are  controlled by the same user because this is very   important and we this is something which we are  very active. This is with respect to blockchain  

analytics. The second pillar and, as I say, this  is intertwined with the first one and that's why   I briefly mentioned it in my first answer,  is crypto economics, because I am interested   to see the link between design principles and  outcomes in the economic functioning of token   economics and crypto economist. And for that  the data pillar is specifically important.   The third area in which we are developing a lot  of research, is in consensus and in consensus   I can mention two areas, two sub areas as well.  On the first side, I'm interested in scalability   properties of blockchain-based systems. And  because of this we have been developing models   to understand proof of work consensus. Now, we  are extending these models to different variants   of proof of stake. One of them is Ethereum as  I mentioned before, and the possible attacks  

that you have with maximum acceptable value,  these kind of things. We are also developing   models for a stellar concsensus, IOTA consensus  and this is something very interesting because   you'll see some commonalities and very strong  differences and always here the question is:   how scalable is a system when the number  of nodes connected to the network is, how   even determine finality in these networks etc.  The second area inside of this consensus party is   looking at the effect of reward distributions  and inside of all these systems. We are now   doing a very large scale data analysis of  different proof of stake based protocols,   variance of proof of stake and delegated proof  of stake to see exactly how centralization and   concentration, going back to crypto economics,  is affected by the specific design choices.

Great, thank you so much for these insights.  You also mentioned that the third pillar of the   blockchain centre is the single point of contact  also in regards to other parties. So, how can   or just the blockchain centre also work with other external partners? So, for example,   research cooperations with other universities or  even is there an interest from the private sector? Yeah, actually, both we have   a con i am very happy to welcome the students  from different universities every year to visit   us and to perform research with us. We have  people from the European blockchain Centre   in Denmark. In the first half of the year,  we'll have people from the University of Cape  

Town in the next year as well, University of  Tokyo, the Beijing Normal University as well   is going to be as well next year we'll have  another visitor so we have a lot of visitors.   A we have some active collaborations with Indian  universities, with other blockchain centres in   Europe, as I mentioned before, the blockchain  Centre in Denmark, the Centre for blockchain   technologies at UCL different universities  in Italy, but also a we have recently as   well, a sign that memorandum of understanding with  the University of British Columbia in a Canada   and we have hosted different conferences.  So we have been very active on academic   collaborations with respect to industry. We  have a research projects that are funded by   different foundations that are around  a blockchain protocols. We have a a,  

I go in historical order such that nobody gets  offended. So the first agreement that we had was   a with IOTA Foundation. The next one was with  Cardano foundation cuspid Association, then   a Ethereum foundation and stellar Foundation,  a lot of the ones that are currently active.   So we discovered origins, obviously with  people from eth in the area of the house. So, how can one also get involved or participate  in the blockchain centre? Is membership limited   to the students of the University of Zurich?  Or are there opportunities also for the public   sector? And if so, is there a certain requirement  of knowledge necessary to be able to participate? The blockchain Centre is a Competence Centre  of the University of Zurich and as such has   a specific set of bylaws that only allow  members to be a either senior researchers   or professors at the University of theory,  that's the Constitution. You guys have also  

associate members that are other professors or  senior researchers from other universities. We   have a lot of research associates that are  in general PhD students in our university.   There are two other categories that are  very important to us and that relate to   our educational activities. Of course, now the  summit is we were nice to have two flagship a   educational offerings. One of them is the  deep dive into blockchain summit school,   that next year is going to be  hybrid here at the university.  

And also online, that we have run already for  three years. And we also have this Certificate of   Advanced Studies in blockchain. That is a  certificate from the University of Zurich   thing with that that has already run for four  years. So it's summing up these two programmes   that are not for people from the university  without above 300 alumni, the blockchain centre.  

And what we are thinking of doing now is and  we are doing this in collaboration with alumni   of the blockchain centre of the University of  Zurich is setting up a platform that allows   to a deep in our offering polo night. Okay, so  I think that this is a very large community of   highly qualified individuals exactly in this  space that is always one in which it is very   difficult to find qualified people. And we are  trying to create a platform by which we can   connect industry with our alumni. Constantly,  this is the first thing but it you may argue,   it is only limited to your alumni. Yes. The  second way in which we are very interesting   is important for us is as I said, we have  a lot of outreach activities. And we will.  

Therefore, we have mailing list groups,  etc, in which people that is interested   in our activities can always join, and a get to  know more about blockchains. We are very active,   we have roughly two presentations to outreach  activities per month. One is an industry talk. The   other is a lecture series by very distinguished  scholars in the area of blockchain, and they are   open to the public and we are really happy that  people joined them. And they are hybrid as well.   This is very important since the pandemic, all our  events have turned hybrid. So you can either visit  

them on site here in the University of Zurich,  or you can also do it onsite. interesting. And what about the educational offer  for the students at the University of Zurich? A 22:03 we have a lot of I am professor   for blockchain activity, as you mentioned  before, so in my team, we offer different   courses that are mostly targeted to students from  the Faculty of Business Economics and informatics.   We have a course on blockchain and crypto  economics. We have another a couple of   seminars. Next year we will have a seminar on  the metaverse as well, because this is a very  

interesting topic that is linked to nfts but opens  many more questions than the ones that Danceworks   and that's why this interesting thing to see  what their students are able to research on it.   In a we also have a professor obviously from the  economics department from the finance department   and offering as well courses a that relate to  cryptocurrencies as a as in financial assets,   that are looking at economic approaches from  the lenses of a contract theory to blockchains   that people in the law faculty has as well a  very good offering as well to students and   obviously in our informatics department other  professors look at it more from a technical   point of view than me I am more or less in  the in the middle of a computer science and   economics. Other professors are more interested  in technical aspects and overlay networks on   these kind of things that will also present it  from the point of view of blockchains. And also   looking at this them as information systems and  looking at the options that are open by them.   So we have a very large offering, actually for  our students, and I'm happy with it. And I'm   also happy to see the interest by the students.  So they're always very keen of learning this.

Absolutely. Which also brings me to the next   question. So to my understanding, currently, there  are no bachelor master programmes fully focused   on on blockchain in Switzerland, are there any  plans to change that at the University of Zurich? We have been thinking about this a we   need to see how sustain this demand because always  setting up a master's programme that this is what   we should be able to offer is a requires a lot of  coordination with respect to the courses that we   are offering and we will we when we evaluated it  back then in 2019, it was perhaps too premature.   If we are able to grow the professors  that can offer courses in this space,   we will be happy to make it also an additional  offering by the University of Zurich because   I think that here in Switzerland we are in  a privileged position with respect to this   because we cannot saw involve a interesting  actors from the ecosystem as well in such an   offering and this could be a really interesting  additional service of the blockchain centre. Yes.

Okay. Maybe one final question for you. Why do you   think in general, this is an important topic for  people to become familiar and informed about?   Because the blockchains are not only technology,   so you cannot just tell the people use this  because it will change your life, and you   do not need to think about it. That's exactly,  exactly that kind of approach is what caused a   lot of troubles historically in blockchain  based systems. And there are many of them   that are not necessarily well designed that they  are not robust enough. And people jumping just   into them without understanding what they  are doing is a very dangerous thing in the   long run for all the blockchain ecosystem.  And I think that, from my point of view,  

education is fundamentally important for  blockchains. It's far more important than a   teaching people to teaching developers how to  develop smart contracts. I think that that the   one thing is necessary, people that  know how to develop smart contracts,   the other is exactly what is going to  trigger a sustained adoption of the   platforms. And this is something that they all  the actors in the space should be aiming at. So thank you so much, Claudio. For the   interesting insights and spending the time with me  today, I certainly hope that the blockchain centre   will continue to grow. And for all the viewers who  are interested, all courses from the University of  

Zurich can also be found in our darwn Academy  will find the link in the description below. And that's it thank you very much,   Please connect to us in our social  media as well, because there will you have also a   lot of updates that you will also provide that  but thank you very much for the invitation.

2023-01-12 19:33

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