The Blockchain and Us - "A blockchain conversation with industry pioneers" [2017]

In. 1903. The, Wright brothers. Invented the. Airplane. It. Was hard to imagine then, that, today there, would be over. 500,000. People traveling. In the air at, any point in time. In. 2008. Satoshi. Nakamoto. Invented, Bitcoin and, the blockchain. For. The first time in history his, invention. Made it possible to, send money around, the globe without, banks, governments. Or any other, intermediaries. Satoshi. Is a mystery, character and, just like, the Wright brothers he solved an unsolvable, problem, whenever. This happens, it inspires, incredible. Innovation. The. Concept, of the blockchain isn't. Very intuitive. But, still many, people believe, it's, a game changer. Despite. Its mysterious, beginnings. The, blockchain may. Be the airplane, of our, time. I. Found. Out about blockchain, first. As most, people around that time were through, through Bitcoin, and. Personally. At, first I thought that Bitcoin was an absolutely terrible, idea, I was teaching at Stanford back, in 2010, and a teaching assistant for the class sent, me an article. She. Said oh there's this really cool thing it's. Open source money and I remember, thinking open source money isn't that cool but it'll. Probably never work I did what most people. Do. The first moment, they are exposed, to Bitcoin I discounted, it I thought this was silly Internet money you, could mine it it's like a Golden. Goose and. It. Took me about a year to really. React. Splore the technology, and so, by 2012. I did what I tell most people to do today is turn. Off your phone and lock your door and study this technology, for a day it's the best advice I could give I was on a sabbatical, from work decided. I'd take a year off live off some savings, figure, out what I want to do it. Was it was there that I discovered this, little orange icon with, a be in the middle said, what is this strange thing so. I started looking, ok. Bitcoin, interesting. That. Was about, 2012. 2013, and, I. Haven't, left a space sentence I've just continued, further and further down the blockchain, rabbit. Hole if you will and I've. Been pleasantly surprised, and hadn't. A reason to crawl. My way back out and find another technology. There's. A point at which it's almost like you, can't stop it. Just gets so interesting, and you're so fascinated, by it and you just want to learn more and more and more and even. By the way to this day it's, almost there's, there new developments, you know there are new ways of solving, problems new approaches, and it's it's. Very exciting to be in this world, it feels really exciting to, be involved in blockchain, feels. Like we're at the forefront of something, that has at least the potential to. Transform. Our. Interactions. Between each. Other, between. Corporations. The, underlying infrastructure, of, both the the private, sector, but also of government, from, part of the fascination is, that we don't yet know exactly. What this thing is and yet. There was still lots, of people gathering, around it and I thought of it is like you, know a space, rock that crashed on earth right, you'd have a bunch of people that gather around and, they're all pleading what is this thing you. You don't really know what it is but it's still very interesting. So. For. Me personally the, blockchain has, two main ingredients. Two main technical ingredients, so. One ingredients, is cryptography. And. When. I say cryptography, I really, mean asymmetric. Cryptography. And. The. Other ingredient, is so-called distributed systems. But. These are the two main things if, you understand, these two things then basically understand, all, the technical details of blockchain, or Bitcoin for that matter you have the ability, to create, records. That, are indelible, you, have the ability to transfer. Value by making updates to, those records and you. Have the ability to automate. Updates. To the records through these things called Smart contracts, and that, means, potentially. That you could transform, the structure of financial, services, today, there, are all sorts of institutions, that exist. To.

Maintain. Sets, of Records to be a trusted. Third party, as the industry parlance for, it and that. Role is potentially, fundamentally. Reshaped, box chains are networks and that. Works, that. We see today. Alibaba. Airbnb. Uber. Those. Are interesting networks but they're centralized networks here. You're gonna have networks that are decentralized, that. Are working, more on as, a cooperative, I, think. The the some, of the challenges will be what are the economics, of those networks where the economics, of certain block chains first, is today's discussion, which is all about the technology I think tomorrow's, discussion will. Be about how, do you build Network effects off of these new railroads and what's, especially interesting for, me is that it was a grassroots movement from. The technology, sector not, not. Sort of the. Movement. Of off, established, businesses, trying to. Trying. To get in to, to find a new selling point it's it's it's really a bottom-up. Movement from. From. Us geeks it's. One of the most. Amazing things in science that happen in the last hundred years, that, this thing is actually possible that you can. Digitally. Sign. Transactions. Or other kinds of information so. That you can prove to people that you, actually signed this it's. Much more, secure than this you know. Curvy. Brickley signatures, we usually use in our everyday life and it probably will replace those things soon, love. We. Spent two years trying. To understand, the space and and when. It would it really meant you know and, we. Found out that it meant a lot more than just another. Digital. Currency, it, actually, as. The blockchain became, more. Influential. In our thinking. We. Began to realize that it was a profound, shift, in. How. The internet. Could be used to. Create. New forms of value and how, it could be used to. Enfranchise. You. Know and include, people in, global, finance we've had the internet for years now and on, the Internet still nobody knows whether you're a dog or not. You. Know identity, fraud is completely out of control data Bri so you know the area where we need some new thinking. Is. In the sort of items in, the identity space so maybe the, technology brings something new into that space and we need it fairly quickly because. We haven't fixed the identity, problem for people but. We're about to put ten billion, trillion gazillion, things on. The internet we can have a. Relationship. Without really having ever met each other or, having done business at all with each other I think, that's fundamental, one of the fundamental things security. Is another. Block. Chains are military-grade. Cryptology, and. They. Have never been cracked it, isn't when you hear about hack Packers, you know stealing, bitcoin or whatever they're. Not stealing from the blockchain itself, they. Are stealing, at the point of entry that the wallet level or at the browser level and they, intercept. Those messages but the blockchain itself, is. Very, secure the, Internet of Things will, probably, be the best test case for a lot of blockchain, technology, because, if we're going to have millions of or billions, or trillions of, Internet enabled devices, doing. Everything from driving us around to manage our affairs to. Monitoring. Our health. They're. Going to need a way to move and store manage, value. And data that has value, in a way that's secure and private and right, now we don't have that and I I'm concerned, about the. Ubiquity, of data and, how it flows in, and, through, your, gonna connect, the devices I think, with a value. Platform, like blockchain, we can at least address some of these problems and maybe even create new opportunities. We. Cannot sit in our office and and study and whatever of, course we do that as well but we, need to go out we need to past it participate. In, this whole. Blockchain. Community. And. Honestly. What. Is. Very new to me especially, young, person. In my team. How. Enthusiastic. They, are about that so if there is a hackathon, for, example, organize whatever, they, never come to me and say a young kind of go there do you can, I get some money for, that they, just go you know touched so interested, they. Just, go and participate, and and share what what they learned and we have heard this question and I believe this is really a new, way also for us how, we deal with this, kind of new. Technology we. Are really in the middle of it nobody tells us what to do it's, really we. Together. Shaping. Let's say what. What. Your mission but what what is the end for in the end for blockchain we need to be much more technological. We, need to have an awareness of how something is programmed, in.

Order Us to check if the programming, is wrong it's correctly, or not so, this might be a kind of, capabilities. That at the moment we have another, in the way that it's needed for the future so. I think in the future you'll always need to have a kind of IT. Or. Technological. Link to the things in order to understand, them. Otherwise. You always need your IT guy, Nick, sitting, next to you helping. You in the understand, of the. Problem this is not something that's going to impact one or two industries it's gonna affect, every industry in, the same way that, you. Know the internal combustion engine affected, almost every industry the same way the internet affected almost every industry the way the steam engine, created. New industries so this, is one of those big. Generational. Technology, shifts, that. Will require a. Concerted. And focused, response otherwise. You'll miss the boat and I think we are all also in the financial, service industry trying, to recognize, that we don't have to be defensive of that but. We rather have, have. To embrace not, just this technology, but. This in a, blur, that it brings us to actually. Access a, vastly. Underutilized. Or. Under undiscovered. Market, that. We have to really do. Business, with an eye to eye level we talk to, all. Sorts, of senior executives and financial, services, and often. We, talk to them and they'd say well you know we. We've. You know we've looked at Bitcoin we've, had smart people come in and explain to us how the blockchain works, but, I still just really don't understand, what. It means for. My business and. I think that makes sense in a way because. If you think about an, iPhone, for. Example what's. Really, important, when a new iPhone comes out is it that there's some new chipset, or they have you, know some new way of. Compressing. Frequencies. I'm not an engineer I don't know how any of that works what. Matters, to people is what they can do. With. The technology, of course success is in no, way guaranteed, one. Day we may look back on this and say oh wasn't, that great you know but if. You ask me I think there's undoubtedly, a, huge. Amount, of progress that has already been made and there's something here I find, it hard to believe that I'm gonna look back in 10 or 20 years and say oh none of this ended up happening. Because. We're. Really seeing a new way of transacting. Value, on the Internet. I. Know. How big financial institutions work first, of all they're not going to run out and do something reckless with technology, this is people's money and livelihood, that they're working with right so this is these are slow upgrade, processes. These, systems, once, they get implemented will run in parallel with, the old systems, for a while before you have a switch over to the new one that's standard, in technology, upgrade so I knew this was going to take time but yes, sure there are antagonists. There. Are players who are. Threatened. But their, business model it's the AT&T Verizon, Kodak analogy, again their business model is threatened by this and of course they're going to do things to try to slow down and water. Down the transformational. Network that. Are that are being developed and, so, there's a game theory, approach to to, how the technology. Is being rolled out in, the markets for sure we, make different round, tables, here in souk after. The distort, of this Bitcoin experiment. And for. Example we invited, banks. Which. Are living here in sook people. From sook bankers. From sook and. We. Tried, to connect them, with people of, the so crypto, alley and. Okay. That they have been talking together but, they, these, bankers, were. Not so very happy okay they said there, are different things. With law and. It's. Not so easy for us but. But it's, also a question of attitude I think. It's, the same thing as, for, our city, for our administration the. Banks, have to get ready and, I. Know that in a way they. Are defensive. But. On the other hand they, have in, research, they, have made teams, which. Face these. Questions, and. Maybe. They are waiting a little bit now but, they. Calm tonight I'm, sure I think there's going to be a lot of disruption a lot of revolution, with respect to a blockchain based technologies, and. What. That's going to drive is is not, necessarily. Banks. Worried. About other banks being competitors, what. What banks worry, about is the is. The bank of one you know the the, next generation, of of.

A Banking network that's resident. On on a phone that's decentralized. That's distributed and, is. Based, on a digital, token, a digital asset that's not especially issued by a bank or a government, or anybody, else so it creates, all these different, permutations. And opportunities, not, only for, enterprises. And governments, but also for, for. Society, we see a lot of examples of banks. And consulting, companies and other you. Know big four audit, firms talking, about how, they can strip, cost out of the business of I don't know trading. In public markets or, you. Know whatever. It, might be but. If, you take the example of public markets how can you cut cost out of market that doesn't exist in the future what, if the trading of securities, happens. Peer-to-peer in, the, marketplace, that, doesn't have the traditional intermediaries. Of exchanges, and brokers and agents and escrow agents and clearing houses and all these other parties. That we rely on that's. The cost you're cutting out but what if the market can function without them so, the important, thing for, big, leaders. Of big companies is. Not just, to think, about. Cost but. Also to think strategically. What. Can this technology enable, me to do that. I wasn't, able to do in the past I think it's going to take a long time for it to work, weave its way into the system, it. May take a normal tech upgrade cycle, for for it to fully, weave. Its way into the system but I've said publicly I think within 20 years that financial, services will be just software, and the, smart contracts technology, in particular is going to automate, a lot of the things that institutions. And people, handle. Today. 74. Percent of the world's population according. To the World Bank does, not have access to basic financial, services, in my home country in the United States of America, which is one of the most wealthiest, countries, in the world about. 50 percent of the population does. Not have access to basic, financial, services including, bank, accounts, there is a huge. Amount of people around the world that, I don't get to experience and be a part of the global economy because. They, don't have access to the financial system for a variety, of reasons, I do think this technology will. Lift a lot. Of people out of poverty but will also be an inclusive technology that, allows more people to engage in, global, commerce you, know I don't like to think that we're creating. So. Much prosperity, for the less, than 1%. I like. To think of purpose. Led businesses, and by the way that's the trick I think for, large corporations. Is. To understand, that the cost efficiencies, of embracing, this new technology, will, potentially, widen, they're, accessible.

Markets, At a, cost that's, reasonable. And, that in itself will create prosperity in, different. Areas, something. That I think we should think about pretty, soon when, smartphones can. Be had for less, than five dollars each which is right around the corner. Nearly. Every, person. Living in poverty on earth will have access to a smartphone and be, connected to a network. That. Is. Game-changing, in, and of itself when. You have digital wallets, on, these phones and you have the ability to trade assets, we're. Going to find, we're. Going to answer that question what happens when everybody has money, because. Capitalism, itself, has. Thrived. In, some areas, by. The natural. Exclusion, of others from markets. It. Actually uses that scarcity, principle as. Its driving the. Basis so. What happens when money is not scarce we, have a look at people and say ok what. Is what, is the, things that you can that I cannot, do and that we can you. Know join forces. Much. More than. Today where we look at people say okay how big is your car and how much money do you have on your bank account so. I believe. That the the future will be even more human. Or humane. No, human then. Than. The last hundred years that we've seen. So. I don't think blockchain, is a revolution, I think it has been done, forever. Like, for 40 years which is really for every computer science in my domain, so. Both. Parts. Both ingredients the, security, and the distribute systems have been around since the 70s basically, since the early 70s and. This. Is not the revolution, but, the revolution in. Some sense or the evolution, is that, the. Jobs will change. That. Something, I believe in that jobs will be you. Know digitized. In sometimes computers will do a lot of the manual labor that, we still see in this kind of service domains today it's called the other force. Technological. Revolution, that I think we. Are we are at the beginning of, social revolution, just now and. That's why we. We. Don't close the eyes we and. Some. People some people say ok there will be much, trouble people. Will lose their work, and, everything. Topless, women and that's I'm. Sure it will happen but. It's better we face it then, we. Deny it offshore working. Or automation. Or robots are they threatening our, work, and. It's, a real life question, when your own son who's, prepared. To go to get an advanced education asking. You that question and. I. Concluded, that yes I do have a genuine, answer, that, it's not. Threatening it. Is forcing. Us to think a little bit different, but, if we do it smarter, we actually, give, us to the next generation, a great new opportunity. To actually, reinvent. Why. They get up every morning and why, they go to work and make sure they really make best best use of the. Degree they studied for and the things they really want to do in life I wanted, to make the world better, just. Better ok. Whatever my measure of better is or yours is. What. Might be valued by society, but. The other thing is this wonderful. Opportunity. To create a little bit of prosperity. Because. What prosperity, offers you is. Independence, we don't have to have people who are living in squalor and and simply.

You, Know, fighting. For a handful of rice every day. We. There's. Too much there's too much in the world, to. Live like that anymore and I think that certain. Countries I think, even certain corporations are beginning to understand that and. Certainly. This movement, this block day movement is the. Technology, underpinning. The. The technology. Part, of, that. Mindset, which exists, offline as well the idea is out and if it's not being, realized, here and maybe realized, there or even in the internet uncontrollable. So. Bitcoin. Is here, bitcoin. Is here to stay and little become bigger and bigger as. The blockchain of, course as, cryptocurrencies. As the, possibilities. Which are connected. To the blockchain in crypto currencies that's. Out of the box and. The. Whole system, does. Not need any. Government. It. Exists, it works, it's, like a computer. Network, surrounding. The world and. You can say ok we don't want to be part of it so. Be it it's. Here and it won't go away. I. Feel. Like this is a generational. Opportunity, for, entrepreneurs and investors and, I, quite frankly I've not seen something as exciting. In my entire investment career let's try, to build, a new system that is that, has better trade-offs, that has better features that has less, downsides. And. Let's. Make it work now the pendulum is gonna swing back and and, what that's gonna do is frankly, make confidence. In capital, markets higher blockchain. Has enormous. Potential, implications. Outside, of financial, services and we, might even actually see, the, the, full-scale, implementation of. Some of those more, real-world. Applications. Leapfrog. Financial, services this invention. When, it came up in the 70s, this, is really one of the totally, ground, breaking, ideas right it, will change society. For sure in many domains it already has changed society in the same in the sense that the internet, isn't. Something to secure place, that you can you know make transactions, on the Internet the potential, for creating, trust. Or even. Permissionless, trust, within. The. Internet. That's something that we haven't had before and so. Its impact. On society, on, business. On government, could. Be profound, blockchain, is to be feared nearly ten years old but I think it's got another ten years to run before we really see what its long-term. Impact. Is I think it's gonna be a long much. More steady journey, that we go down and and you're gonna see multiple, technologies, inspired, by this thing blockchain. Technology, is not the. Solution to, all, the, problems under, the Sun and I. Think as it matures, we, will begin to see its. Potential. Benefits but, also its limitations, you can't deny it or, you can face it and, and. We always said we have to face it because these. Things are coming up. If we, won't or not I've really seen. Very. Long-standing. Partners. When, they saw the whole opportunity really to change say hey I, don't understand, everything but I understand. There is something, behind so, we need really to go forward that that's really great people, often say that necessity, is the mother of invention but I like to say that necessity, is also the mother of adoption. Because, if there's a really use case that. People, you, know need, a technology, for well they'll start using it I started, with Commodore, a we had Atari we, had Apple at, some point in time Windows came and everybody. Just started to use Windows without. Asking. What, what is the code behind it, what. Is the code behind moving the mouse we, have a whole lot of possibilities. Everything. Will change it's like in, my opinion the. Possibilities. Are endless and, it reminds, me a little bit of the situation, as if we all, the sudden have, two huge, inventions. Or three inventions. In. One. Moment, we actually are living. A very interesting, window. Of opportunity, and, I'm surely, very very excited, to to fully embrace that and. Even. One little step can. Be a great step for mankind and, I think that we are exiting. The. Industrial, Age that, we are entering an, age that.

We Still have to name where, that will take us I think, is very. Hard to tell at this point but my suspicion. Is it, means a sort of resurgence, of the notion, of of, community. It absolutely, feels like a whole, new paradigm, for changing, the world yeah we're at a crossroads. We're, at a crossroads here we have the wherewithal now to create technology that would actually help the entire human race, the. Question is will we do it but. We can do it now there's so, much innovation. That. Blockchain, technology, has spurred, all. Throughout, all, throughout the world and. I. Have, you know absolutely no doubt in my mind that, this technology is, is. Going to affect everybody I would. You know I would say in, in 10 20 years timeframe, and there, won't be a human, being whose life is not impacted, by this, technology. You.

2018-03-12 06:58

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