Capstone Enterprise Panel: Ethereum's Industry Impact

we are ready to kick off our very first talk and it's going to be a capstone ethereum panel and we have dan cha paul brody karen scarborough and jim mccann who are going to be talking about the industry impact in the enterprise world so they're all here and uh with that i'd like to welcome all of you to turn your cameras on and i will kick off with our first talk for the impact summit welcome hi cardik thank you very much uh i'm paul brody can you hear me all right uh yes we can i think we're waiting on the global blockchain leader at ui i'm actually going to give the for the capstone summit i think i'm going to start by giving a short talk and then we're going to go into the panel discussion sounds perfect so uh anyway yeah so i'm paul brody i'm the global blockchain leader at ey and i'm really delighted to be here uh i have been a huge imperium fan for many many years in fact uh quite a few years ago i was the very first person to build a blockchain at ibm and we built it on the alpha version of ethereum and so i have been for for uh since i think 2014 or so working in and around the ethereum space it's been incredibly exciting but all of that time i have been in that capacity as a representative and a participant in a large enterprise environment and as you can see i've i've worn my best soul-crushing large enterprise blue suit today first i was at ibm and then shortly after that i went over to ey ernst young which is one of the world's big audit firms and professional services firms but i have never lost my passion for ethereum i've never lost my passion for blockchain in fact the paper i wrote at ibm was called device democracy because i wanted to bring uh the decentralized vision the democratized vision of technology from blockchain into the world of iot as well and i have never kind of lost that desire to kind of properly decentralize and industrialize this technology what i want to talk to all of you today about is why this incredibly vibrant incredibly capable ethereum community should invest some time and energy and not just tolerating the participation of large enterprises but really welcoming them and i know it's an incredibly vibrant community i've been watching the finalists in this hackathon all afternoon and it's been incredible but enterprises have a lot to contribute as well and i will argue and i would like to argue that it's not just that enterprises have a lot to contribute it's that in working with enterprises we will help to make together ethereum to be the world's most dominant public blockchain and that that is in and of itself a genuine public good so let me get into the thing i mean i'm a corporate person we would not be corporate people if we did not have slides to share with you and so let me share with you some slides because that's what we do um so let me talk about embracing ethereum and the enterprise in order to make ethereum and the enterprises more successful together the internet has created a winner take all economy now i i feel like i've been around forever in the world of internet but this is the kind of the world that we live in the internet has rewarded scale and network effect and the result has been a really substantial centralization of the digital world right centralized intermediaries have used the economics of software which is that another copy costs nothing they've used the power of network effects right the more participants in your network the more valuable your network becomes and they've used those two together along with proprietary technology to create vendor lock-in and market dominance this isn't just a theory and it's not just something that's happening in search or a couple of other industries almost across the board in heavy duty research that's been done by economists what we found is over the last 30 years the global economy has become more centralized right it has become more dominated by a smaller number of companies those companies are immensely profitable and they're also immensely powerful and what i would argue is that it does not have to be that way software and technology does not have to lead to monopoly or oligopoly quite the contrary i believe blockchains offer us a different path we still have the economics of software zero marginal cost we still have network effects but on public blockchains instead of vendor lock-in from proprietary technology we have genuine open access and that should lead to a substantially more level playing field and real competition right and that's good for all companies in a global digital ecosystem not just a few really big ones right digital intermediaries are the kind that we've been dealing with for 30 years right they have really come to dominate so many different industries and if you look at these digital intermediaries they are centrally controlled marketplaces that manage the flow of information and that flow is is often asymmetrical right the party at the center knows more about what's going on than any other participant and it doesn't matter whether we're talking about sneakers or car rental or apartment rental it's not an accident that the central participant in this flow of information often becomes more valuable than all of the participants at the edge sometimes combined in a blockchain environment we can do all the things that centralized digital environments can do but put everybody on a level playing field right and this means same work at centralized systems but with a a truly level playing field and no risk of a central market orchestrator becoming a central market monopolist now fear of digital intermediaries isn't just a theory it has had a huge impact on how enterprises run their businesses and what i mean by this is uh if you look inside the average large company what you'll see over the last 30 years is ever increasing sophistication inside the enterprise so they've got digital shop floors they've got erp systems that keep track of every order that's been placed and every contract that's been signed and every person that's been hired they are now planning and scheduling systems to take orders and they do algorithms to determine optimal manufacturing there are analytical tools they're machine learning tools there's a ton of stuff that goes on inside the enterprise but the fear of being stuck in some kind of all-powerful digital marketplace means that enterprises haven't extended that to integrate with these central market environments instead they stick to very low risk systems and what that means is when two companies want to communicate they may have all this incredible sophistication internally and when they go to communicate with somebody else or do a deal with somebody else it all gets reduced to sending somebody a pdf file by email or maybe a spreadsheet right if we're lucky they use something called edi electronic data which is basically business to business text messaging that has not changed since the early 1970s right so it takes all this incredible sophistication shared process shared facts shared tools and boils it down to a little pdf sheet right but that's not what enterprises really need they need sophisticated smart digital interactions that have multiple parties involved they have shared facts and they have shared business logic now some of you who have been participants in this finalist discussion just now you are thinking to yourself well yeah we know how to do that that's easy you're right it absolutely is right i believe we believe at ey that public blockchains will do for business ecosystems what erp enterprise resource planning the software that companies use to manage themselves internally did was the in the with inside the enterprise that those systems joined up the left hand and the right hand they made sure that if you bought the last widget off the shelf and they started omaha it triggered an order to replace it in california right erp connected the enterprise blockchains will do that for connecting between enterprises now the business benefits that we have seen for our clients are gargantuan and i i just want to pick off one which is one of my favorite examples ey is building in cooperation with microsoft a blockchain system on ethereum in this case it's a private ethereum version although we'd like to get to public one day we're building on ethereum the next generation royalty engine from microsoft so when microsoft buys software they uh they need to pay for it they need to sell it they sell it on the xbox video game system they need to pay for it and it's a complicated system 3 000 different suppliers everyone with a unique contract as we move those contracts from paper from pdf files to blockchain based ethereum based smart contracts we're getting enormous enormous performance increases 99 less cycle time right that's a fancy way of saying way faster literally 45 days takes 45 days after the end of the month to calculate and now we're down to like four minutes right not only is it way faster but it is also substantially cheaper almost half the price of the existing system and that includes all the cost to translate the paper contracts into digital contracts and much more trustworthy because the participants can see business transactions as they're happening they can inspect the logic oh you know that's that's that deal here's how much i get i understand this this is this looks like the agreement we negotiated right so that's just speeding up the process and we haven't even gotten to anything all that really sophisticated right where we can get really sophisticated is the kind of stuff that consumers are doing today with d5 right so for consumers defy kind of fuels old hat the first generation of smart contracts weren't actually that smart and i hope i'm not going to offend anybody here but the truth is they kind of kept track of assets they kept track of the the registry of who had those assets and some of the properties of those assets but when we get into d5 we're starting to get into properly smart smart contracts where you can hold assets you can move them around you can insure them you can pay for them you can transfer them you can lease them you can do all kinds of stuff this is classic stuff that enterprises need to do now defy today isn't suitable for enterprises it's too early stage there's too much but there are too many bugs in it right programmability which is the value proposition also brings a risk but also more importantly there's no privacy in d5 but this is what enterprises want this is what enterprises do today they do all these things today they just do them in a very slow paper-based expensive process i shouldn't say paper anymore it's just pdf files but it's the same thing the future of business operations is more than just d5 though right d5 is clever because it takes financial assets which are already entirely digital and and kind of acts upon them but we can do more than that so if you think about a kind of a classic business model of manufacturing right i buy raw materials i manufacture the product i move the product out to warehouses i store them in warehouses and i sell them in stores defy can deliver decentralized financial services all across that process we don't need to stop with defy we should go on to diesis decentralized systems right it's not just that we want to manage finance we need to manage business operations no company runs entirely by itself if you have a fancy new phone that you might have received in the mail this week that new phone was not made by the company whose name is on the phone they designed it they arranged everything but it was done by other companies right and the systems that manage that are very complex and finally not just the systems but the operations themselves 3d printing warehousing air freight they can all be tokenized and sold and managed on a blockchain in a way that is completely standardized and it's not an accident that i'm using lego blocks to depict this because ultimately if you pick up the right set of lego blocks you can put together a whole company from different decentralized architectures and run an entire business with a very small number of people and an extraordinary degree of automation and integration all of this is great vision of the future but there's one thing that is missing and and if ethereum the ethereum community and enterprises are going to meet together there is one thing that we must embrace together and it is privacy right we want the maximum level of privacy possible maybe not always for the same reasons that some ethereum users do but enterprises do not want their competition to know what they're buying how much they're spending where it's going they don't want them to go to know any of that and privacy should not be confused with anonymity it's not about evading regulations it's not about defining the law it's about keeping your competition from knowing what you're doing right and that means private asset management buy sell transfer pay in privacy private business logic nobody should be able to read the terms and conditions of the contracts that we have together right i strongly believe in the value proposition of proving what we say is truthful but that does not mean that everybody should be able to see what we agree upon verifiable business identity right so much of what's been talked about in the recent past with regard to identity is incredibly important but it's mostly focused on individuals i also need to know not just that you are you but also that enterprises i transact with are who they say they are and then finally private data synchronization right so rules like gdpr and other things mean that we should never leave sensitive personal information or sensitive business information on chain but we do need to be able to use the chain to transfer data to identify partners to prove what we we did that we did what we said we did right so these are all things that enterprises and individuals need and we want to see those things get embraced and built about and and if there's one thing that's frustrating and challenging it's building for privacy there's no question it is much harder than building systems without privacy and i can tell you this because that's all we do i have probably more most of my developers are struggling with the challenges of architecting and building solutions that support privacy on public blockchains but it's essential now at ey we're investing very very heavily in public ethereum it is the number one investment priority for us we have been investing in some really important technologies probably the most prominent one that we've been working on is a solution called nightfall that's been around for now three years uh we actually launched the first version of prototype version of nightfall in prague at devcon a few years ago and it's a zero knowledge proof-based tool for enabling private secure regulatory compliant transactions on the public ethereum mainnet but don't call it ey nightfall it's nightfall because we put it into the public domain right it is free it's in the public domain we gave up all ownership of it to it we have donated it to the ethereum community although we continue to work on developing and expanding it we did that again with baseline so baseline we worked with microsoft and we worked with consensus and we've added a bunch of protocols for completing from going from private transfers and payments to private transfers and payments and shared business logic and again donated into the public domain this one being managed by the oasis foundation now these are huge investments by ey millions of dollars in research that we are donating the public domain i don't want you to get the wrong idea we're not a non-profit we still have a business to run and we have been building out our own products in this environment the two ones that you probably have heard about are ops chain which is for doing business transactions on blockchains like procurement traceability contracts and then blockchain analyzer which is blockchain analytics financial statement audit security testing and review and those actually you can try out at blockchain.ey.com now an ethereum ecosystem that has a lot of enterprise participation i believe it's not just a bigger ecosystem it will be a better ecosystem for all the participants and i feel very very strongly about this right i am here to persuade you i hope that enterprises are going to be helpful in building out this this ecosystem to start with it's going to be a more secure ecosystem enterprises have trillions of dollars at stake so the entire value chain is is worth money it gets a huge amount of focus on security there are tons of enterprise researchers who want to work on blockchain security it will be more decentralized right it's already ethereum is already highly decentralized but what happens when the world's top 2 thousand companies decide that they all want to set up their own ethereum node that they want to do some staking because they can transact on the ethereum environment that means a lot more genuine decentralization by companies who care about a just verifiable and properly decentralized system more scalable again huge amounts of research and energy being invested to maintain reasonable transaction processing times investment in kind of algorithms and scalability it's a big deal right and it costs a lot of money and then finally more private right keeping data secure keeping it private is a major enterprise priority and thanks to laws like gdpr right it's not just an enterprise priority the risk of violating those rules of losing track of your data it comes with significant financial penalties so enterprises are prepared to spend real money on research and technology and tools that secure the privacy of your data and do it in a genuinely decentralized blockchain environment now i think in particular one of the things i want to talk about and one of the things that i think is underappreciated is that there's an important role for trusted third parties in making blockchains better ecosystems we talk a lot about kind of trust free environments but the truth is yes some parts of the blockchain environment are genuinely kind of no trust needed because everything that happens on chain is verifiable on chain but that's not always true for the things that happen off chain and the future of ethereum is about interacting with and connecting to systems that have instantiations assets tools that are off chain now a big part of that can be served with things like oracle and and oracles are brilliant and valuable because they provide redundancy and they provide a kind of form of crowdsourcing of certain data but there are also some areas where there is only one data provider and there can only be one data provider if you want to know whether a particular shipping company delivered your product the only person who can tell you if that shipping company delivered that product is that shipping company so how do you know if they're telling the truth how do you know if they're being accurate how do you know if their systems are reliable if their timestamps are correct the answer is something that has been going on in the audit business for decades it's called attestation or stock reports which are called system of control reports this is a routine business for audit firms and it should be a part of the future of blockchain right independent at this stage and doesn't mean by the way an end to fraud it doesn't mean an end to dishonesty but if you have third parties who are inspecting business process who are required to put their name on the line the odds of this uh of kind of widespread fraud i think potentially go down there's no need to reinvent the wheel this kind of technology these capabilities exist in the market to get today together already and very importantly it's really important to remember that there's a difference between a trusted third party of which you have a choice of many different service providers and a centralized intermediary that has a veto or control over the system right one of these is a useful addition to the environment i believe the other is something that i don't want to sign up for right i don't want to be the only party that does this but i want to have a framework and a set of tools that we accept that in some cases it's useful to have external attestation about something now some of you your eyes are glazing over your like sock reports and what are these things and honestly i have to tell you you know i've been at ey for five years i tried so hard to ignore as much of this as possible for as long as possible but the reality is that the ins and outs of regulatory compliance audits stock reports are important and i encourage you to think about these things not because they're interesting in and of themselves to everybody but because the stakes are really high right the stakes are very high if a public blockchain if ethereum or some other equally good genuinely decentralized truly open system doesn't triumph the results for the world will be bad and the reason i say that is because we haven't repealed the economics of software right blockchains are still subject to economics to software that means zero marginal cost and network effects right and so what we see over and over again in this world is that time and again whether it's mainframe operating systems desktop operating systems mobile device operating systems social networks internet protocols maybe blockchains as well we tend to end up with just one and occasionally two dominant platforms right not only do we tend to end up with only one or two dominant technology platforms but dislodging them is almost impossible right once you've picked a particular platform right whatever it is right there's a very little chance to go back and change your mind right there are people who've been trying to get us to use linux on the desktop for decades and as much as i love linux and i love playing around with these technologies the truth is it's never really gotten any traction right and so what i would ask you to do is if you think about does it matter if enterprises join the ethereum blockchain i would say it does because if they don't join the ethereum blockchain they will join a blockchain and if that blockchain is not open and genuinely decentralized it will become a very different environment so to quote a famous movie do you feel lucky because i don't want to leave things to luck right the internet for all of its shortcomings and there are many the internet is like ethereum a public and permissionless network it allows this very orderly world of enterprise commerce to exist alongside an entire spectrum of stuff right some of it very very good and some of it maybe not very good right and what we know is that although 80 or 90 of the money right following the classic 80 20 rule most of the money is in this nice orderly well-maintained enterprise garden but most of the innovation most of the transformation is outside of it right disruptive innovators they don't come from inside the walled garden right dual use technologies they don't come from inside the walled garden the dark web certainly doesn't and over time many of these things like ethereum and bitcoin are slowly making their way towards the kind of well-behaved enterprise walled garden but they were allowed to exist on the internet because the internet is public and it's permissionless they didn't have to get permission from somebody say hey i have this idea for a blockchain uh it allows people to transact shoot anonymously and in a potential currency no one said to them let me form a committee and let's invite the lawyers to discuss and we'll let you know if you can join but that's what it will be like in a permissioned ecosystem and if i have one final thought for all of you it's it's very simple and it's very clear there is no such thing as permission innovation right if you have to ask permission the answer if your product is sufficiently clever sufficiently brilliant and sufficiently disruptive if you have to ask permission to offer it the answer will always be no so that's it for me i'm looking forward we have an amazing panel and i'm going to hand it over to dan to get us going on there oh thank you dan i love that that was awesome paul what is the sound of just one audience i get the rest of the you know the the audio uh tracking to get the big clap that was great paul all right so um that was a fantastic introduction to uh you know the enterprise story and you know the enterprise community that that uh you're bringing here to um to this this panel uh i'm dan shaw i'm an advisor to the ethereum foundation on uh the enterprise ecosystem uh today uh you met paul uh and uh we'll introduce a couple of uh the rest of our panelists here um so uh karen you wanna introduce yourself and then we'll let hand it up to joe sounds good hi everyone and congratulations to the the finalists today and for everything you've built and been working on um my name is karen scarbrough i work for bp and our innovation group and i'm excited to talk about an enterprise and ethereum today tim hey everybody i'm joe mccann i'm currently a strategist in the developer division of cloud and ai at microsoft and prior to joining microsoft i joined about a year ago i actually was actively involved with dan shaw in the node.js community and we co-founded a business together called node source which was the node.js company and so we have quite a bit of experience working with open source technologies and bringing them to enterprise and understanding that kind of positive feedback loop so really excited to be able to share my experience and then also talk about how i think the ethereum community could benefit from a lot of what paul laid out in his uh keynote we'll insert the uh the paul rudd jeff of like yeah who would have expected you to be here [Laughter] uh fantastic so uh you know we have uh you know some high profile community members here and you know representing uh you know your organization and you know a lot of uh you know what you get tasked with and asked to do uh is you know translating you know all of what's going on outside uh into your your local community so uh you know karen maybe you could kick us off like where where do you find folks getting hung up and uh you know with misconceptions that you uh are constantly having to to redirect them toward right um well with the the first use cases that really stood out to enterprise were around tracking and tracing for blockchain and supply chain um and when you're explaining that to the audience and supply chain and which i used to work in that arena with erp systems as paul mentioned when you say distributed database or distributed ledger people think of putting their their data on that and they think of using um blockchain as a vessel to actually share the data itself and the past three four years of proof of concepts and enterprise there's been a an aim to to be able to use blockchain to do that instead of what it's fundamentally meant to do around verification of transactions and being able to compose multiple applications one on top of another so i think there's some re-education that needs to to happen around where and when to appropriately use blockchain and where to look at the innovation of it as well i think we've hit a lot of upper peaks and what we've seen private blockchains able to accomplish so looking more to where the real innovation is in the public spaces where to look next really right on joe do you want to jump in yeah sure i mean so from my perspective i i try to harness the view of the developer and map a lot of that to how the enterprise thinks about new technologies and so i think one of the things is is that you know there's been a significant amount of work done around the tooling and infrastructure required for developers to actually build applications period and i think there's still a lot to be done there i know microsoft has been actively involved across many teams across other divisions outside of the developer division that i work in um but within developer division you know we are responsible for things like visual studio vs code github azure services and so looking at having kind of the primitives if you will fully baked and then moving those towards kind of what are the best practices or standards and i know uh microsoft working with paul on baseline protocol is helping shape a lot of that for specific enterprise applications there's still that kind of hurdle mentally or sort of uh passionately to move traditional say java or net developers to something like solidity or to just the idea of smart contract programming so i think there's still a lot of work that needs to be done from the communications level how do we message how do we build an architecture around messaging with respect to building smart contract applications and once developers get more comfortable with that and we start to see a bit more tangibly the power of these types of applications i think you'll start to see a lot more flywheel effect of the tools and services that will start to stem from that to support the continued growth nice meeting developers where they are not expecting them to make that journey that's exactly right the developer tools are the single most important thing unfortunately we're still fairly immature in the world of tools for privacy uh so nightfall is was an effort on our part to make things simpler it's it's it's far from simple overall and the toughest thing we've seen and we spent a lot of time kind of building applications um it's hard for some people to wrap their heads around this idea of a properly decentralized application they keep trying to write the same centralized application but now it's in solidity instead of java and that's not right and i keep having these discussions like think like a blockchain native right inputs are tokens outputs are tokens right um you know we're doing transactions it's it's a hard mind set to shift uh enterprises are struggling with that but i think they will get there and they get it when you start to talk to them about the business process and the inputs and outputs of things like purchase orders and invoices so yeah that's done something interesting where um you know open source becomes this uh you know sort of essential conduit for interactions you know open source is is already hard uh for the enterprise how how does you know the the addition of uh you know working in uh you know uh public blockchain especially uh you know change that landscape football uh for us it's actually quite the opposite open source is easier than closed source so and especially we we made i think a particularly important decision which was to go fully public domain so one of the rules that affects companies to do auditing is you should not evaluate your own work because predictably that leads to i did that and i think it was a brilliant uh problem right so uh imagine that if we kept control of all of this code and other companies used it and some of those companies were audited by us we would be in a situation where we might be called upon to evaluate that code by going full public domain relinquishing ownership there's a there's a bunch of advantages number one it's not ours right and other people have taken it they've edited they've changed it so it's not just that it's not ours anymore but but it's changed from what we originally did right secondly um there's uh there's no financial incentive for us right there's no no complications and then thirdly for enterprises right one of the problems with open source which is also a problem for any form of software is the license agreement right you know that that thing you click on okay to right that thing is 60 000 words right hours is like six words which is do what you want with this it's not ours anymore and that actually removes friction so um you know in this case i think open source and especially the public domain flavor of open source was powerful for us nice yeah joe i know we had to deal with uh a lot of folks with uh wtfpl and you know helping folks do that um anything that you want to add or karen yeah i mean i'm just chiming quickly uh before karen um you know one of the things that we learned uh with kind of growing the global node.

js community is on the one hand we had kind of like this really early in the beginning these kind of almost anarchic style open source zealots and developers right that were just you know writing tons of code and releasing tons of modules and they were they were putting there's a there is an open source license called wtfpl um that is as cl plain as day you can do whatever you want with this except enterprise legal departments don't approve that license and so what we recognized was that even something as simple as no no i seriously don't care you could do whatever you want with it restricts the ability for enterprise developers or developers that work within an enterprise to contribute to a project and so there i think there are some things that can be done and i clearly don't know the the spectrum of this within the broader eth community because there's so many different projects available but there are little things like that that add up to friction and i think to paul's point removing that friction can help accelerate a lot of the innovation i think the second piece is that you know 20 years ago open source was was not welcomed by most large companies let alone to certainly tech companies and we've seen in a complete about face with that in fact even at microsoft we are incredibly passionate and welcoming to the open source community and open source lots and lots of code we do a lot of products in the open this is just a complete sea change event that happened with software development i think the next iteration of this is recognizing the value of a public chain and moving a lot of this stuff to public chain and seeing what is the value that we can actually all start to build still you know retaining it's just the same thing with a lot of companies today they open source a lot of stuff they provide stuff in the open but they still have their secret sauce or they still have something that actually you know they can derive value from to serve their shareholders or their business i think the same thing is ultimately going to be happening with respect to public blockchain as they can treat it almost like how they've thought about open source initially 20 years ago and recognizing now open source is actually the biggest value driver for software development today for me it makes me think of a conversation i recently had in the organization i was we were talking about open sourcing and blockchain and public blockchain and why that would be valuable and i pointed to a particular project in the the d5 space and one of our leaders looked at it and said well there's only just a few pull requests on this uh i don't see how open sourcing that contributes to contributions and we actually had a conversation around i showed him the activity and um the total value locked in this project how other projects had built on top of it so it's um and when he looked at it again he said okay so it's it's more of the open api and i know um uh solidity people will correct me and say it's an avi but i mean just that's that transition in language and under an understanding um that really was a light bulb moment for the both of us and understanding the the value that we were trying to communicate and really where open source is different now um potentially in public blockchains than it was uh in the past we're done so you know as we're looking forward uh yeah we have uh you know all the consortium chains and um you know a lot of the effort that we've uh put into that um but you know i i keep hearing everyone you know really looking uh you know toward mainnet and toward our collaboration there um you know one of the key components that uh you know i see in terms of aligning um enterprise expectation is you know simplifying uh you know their cognitive load with things like uh baseline protocol uh paul maybe you could you know kick off the discussion uh around baseline and i know that it's a big contribution from y'all but uh you know now uh you know getting folks from you know this exists to uh you know we're gonna go out into the sun and and operate there uh you know how how's that going and how can we you know sort of help folks on that journey so it's it's going pretty well overall we've gotten a pretty good reception we've we've tried very hard to switch the conversation with our clients from this is blockchain and let us talk about what blockchain can do for you to this is option network procurement it's a procurement system a guarantee that you get your negotiated volume discounts when we switch that conversation blockchain tends to sort of be further back in this and it's much more about the value that can be created right eventually we get to it's built on the baseline protocol we use zero knowledge proofs uh in order to protect your privacy so uh my message relentless message inside of by into our teams is let's talk about the product let's talk about what the product does and then uh if the technical people want to get into baseline we're happy to do that so that's the conversation we're trying to shift towards uh when we talk to to external clients and decision makers right so what now karen is a good example of somebody who you know is quite savvy about the underlying technology right and karen you probably talked to a ton of the own your own business users inside of bp every day and i i was in supply chain prior to to jumping into blockchain so understanding having used an erp system like i can say from my experience as a buyer and as a customer service rep way early in my career i would have loved just one portal and basic system to where all my customers connected or because what happened although things would be digitally automated if i had to log into one customer portal for customer a another one for customer b and c then it really didn't achieve the um the value that was people originally perceived doing um because you were actually increasing the workload so if you're able to connect all that in a better way it's it's a much better environment to work in joe anything else you want to add to that or i'll move into my my uh sort of ender question cool all right i do want to say i want to say one thing about microsoft so the the toughest thing and this was this was i just i want to tell this story because it's it's it's both good story and thoroughly humiliating and i there's nothing i like more than humiliating myself so early on uh in my time at ui we had this amazing procurement contract from a really big company and we we built a whole procurement system for them and and we were in the final review meeting and the clients like this is amazing it's fantastic it's gonna save us hundreds of millions of dollars and we're not going to implement and i was like what all right i was like i was writing the press release in my head and i my brain caught up with it and we're not going to implement part and the answer was you know blockchain news scary right change is good you call us when somebody else has done this first and um that is so many of our sales cycles ended in that discussion and if there's one thing that i'm really grateful to for microsoft the xbox royalty system that we are doing together you know we found the client who was courageous enough to go first and that is um that is something that is as rare and valuable as possible to get because uh once they do it the the world follows but you just got to get that client and no matter how many times you tell somebody we're using it they they don't see that as nearly as valuable as having an actual external client that's using this solution and can report business value then that helps to unlock the floodgates and it's one in every industry and you know in the case of microsoft we could not ask for a better partner in clients because of their courage to go forward and to be first well on behalf of all of microsoft i will thank paul uh yeah i mean we saw this in spades you know there was a a point where uh you know d shaw is going to talk about netflix and uh you know netflix paypal walmart uh you know that was just a stick in uh no jazz um so you know looking into the future uh you know let's go into the next big push joe you want to kick us off like you know where where are things going yeah so um just to give folks a little bit more about my background you know i've been in technology for 20 years plus but i've also worked on wall street and actually just before i was at um i joined microsoft i ran a quant trading desk at an institutional hedge fund in san francisco but for cryptocurrencies and so what was really fascinating about that is you can imagine how disjoined and kind of broken these markets are there's incredible opportunities but from a developer or a technologist's perspective i was really fascinated what was happening with d5 and i saw a number of the hackathon submissions that are mind-blowingly incredibly brilliant and amazing but for me there's something very unique about the concept of defy in general and it's because for the first time i believe we now have the ability to have money or value that it's programmatically accessible and that unleashes innovation at a level um in finance that i think has never been seen before and so as i try to as best i can keep up with the d5 community i take a step back and look more broadly at kind of the ethereum community of developers and say you know there's kind of like two um two types of developers and i'm clearly generalizing so don't beat me up internet please but um we we recognize this in other open source projects you have some folks that are really good at you know scalability and performance and just getting in and fiddling bits right there i almost call them like the mad scientist kind of academic type programmers that just want to work on the core open source project or set of projects and then you have these what i call product engineers where they see these primitives these legos if you will and they're like oh i see all the legos let me build a thing with it and for me that is best personified in what's happening with d5 so what's really exciting from a developer's perspective and i think where we're going to see a lot more kind of innovative growth in the ethereum community is is the explosive amount of innovation in d5 and i'll give one example i know this this canonical example has been used probably a hundred times today but there's a concept of flash loans or collateral-less loans this concept of being able to have a parallel set of instructions to you know arbitrage something or or enable lending without someone actually having collateral is next to impossible in the traditional financial world yet when you take technologists that have this new platform instead of primitives that are available to them we've come up with this as a community or someone came up with this concept right and now it's kind of a caught wildfire we saw over the summer this concept of yield farming and i won't go into whether it was bad or good it's just the idea that we continue to see more and more innovation around um the ethereum community via the the d5 vehicle and so that to me is one of the most exciting things is we have an opportunity here to kind of rewrite how we think about value exchange and literally write it programmatically which is one of the areas that you know myself and my team are really keeping a pulse on is to kind of monitor that group to see how can we best support them to continue innovating in the space nice karen what's your next big push well it's been a really big year for for bp in multiple ways so in february we announced that we're aiming to be carbon neutral by 2050 well um i should say we will be carbon neutral by 2050 and that's really exciting for us so even absent of covid and the major economic changes we were we were going to change in a big way this year um and what's happened around the world has only accelerated that with where oil and gas is right now so we are changing tremendously as a as a company internally as opposed to to where our focuses are where our new business models are going so right now we're in a major push of validating demand for our our new initiatives and projects and um adapting to um innovating behind having discovered that demand so uh the the biggest pushes for for us is to stay innovative while while validating demand and uh obviously we're here because public blockchains are in consideration of that but there are so many other technologies that are contributing to that but um we're we're really transitioning just much of what we're focusing on um and in climate action to better serve and better prepare for a more sustainable world ahead awesome that's exciting paul next week so uh maybe sort of uh one big push and one prediction so the big course for us is uh is really is the industrialization of public blockchain so um over the last six months and over the next six months we're finishing this process of moving all of our e-wide blockchain products from being kind of behind the firewall implementations to uh sas applications that run at blockchain.ey.com so we're taking away all the complexities so if you're not a a low-level developer you can go to blockchain.ei.com you can set up procurement you can do blockchain you can do block explorer you can do smart contract testing things like that so we're migrating all of our product into this environment and we are maturing it to the point where we think we want to be able to run almost any enterprise business profit so my hypothesis is fundamentally the way the companies interact is it's all variations of i have money you've got stuff products or services and we are exchanging them under the rules of some kind of an agreement well the money and the stuff can be accurately represented as tokens of some kind and the exchange is represented as a smart contract so if i get really good at representing tokens and i get really good at implementing smart contracts i have everything i need to model and implement any kind of business process so that's my that's kind of my number one push is to get to the point where you bring me any process insurance car sales manufacturing output freight logistics i can model that implemented and run it for you as a network level solution that's job one job two or so that's my big push strategic goal or prediction that i would make is i believe that by 2030 more than 50 percent of all new business contracts will be done on the public ethereum mainnet now how do i get to that number do i just magically make it up no i nearly magically make it up based on what happened with cloud so in 2006 amazon brought us aws and and especially the kind of elastic storage right the storage environment right at that time if you had gone to a corporate cio and said hey you're going to use the public cloud they've been like the what right or maybe if they knew what it was it'd be like not ready not mature in 2017 11 years later more than 50 percent of all new erp implementations all new enterprise application implementations were done on the public cloud so we went from what's that to of course i'm doing on the public cloud in about a decade i think that sort of in 2020 with the maturing of privacy-based technology and the the shift towards public blockchain this is the starting gun for for enterprise usability and so a decade in the course of a decade we're going to go from that sounds interesting but i don't think i can do this to of course we want to execute this contract on the ethereum mainnet so that is my that's my prediction enterprises take time a decade is not an unreasonable transition time we're done that's a great way to end all right uh so uh you know that that does it for our panel i want to make sure that we um you know uh open things up to uh some questions i'm getting some questions from uh chat from folks uh all right um how will enterprise adoption look different in different countries with different kinds of economies will there be a leapfrog dynamic what like uh we see with with it rollout in developing countries uh anyone want to jump on that i can take a stab at it um but you know i'll preface this with it it's probably wrong it's just a theory um so there what this makes me think of is this question the way it's framed of you know how will enterprise adoption look different in different countries with different kind of economies reminds me of the explosion of um mobile payments in africa so you know for decades the majority of folks in africa were under banked um they and they just simply could not did not have a bank nearby or were unable to get a bank account um but instead they all had mobile phones and so the mobile phone actually enabled them to you know more or less have a bank account they used this thing called m-pesa which was a uh i believe it was a combination of a number of companies that came together to enable most payments can you mobile there you go yeah and so so for them they had this kind of you know leapfrog moment of we went from being completely underbanked to being one of the leaders in digital banking and mobile banking right in terms of the experience for their consumers and users and so i don't know what that analogy looks like today with say you know enterprise adoption of um you know smart contract programming or blockchain-based applications um but it makes me think that that is that would be a clue for what that would actually uh look like is what are some areas where you know somebody doesn't have the ability to i don't know have access to certain systems or there's so much fragmentation or there's some something disjoint with the experience today that they just can't you know download something from github and get it up and running um that enables them to actually jump forward similar to what happened with folks in africa with m pesa nice paul karen anything else i got another question uh coming in so let's go to the next question all right um this is an interesting one uh you know so why do you all think that um privacy hasn't been uh much of the focus of enterprise blockchain work so i wouldn't thought i'm gonna dive on privacy has been the focus of enterprise blockchain work but the way that it's been focused on has been different so privacy on a public network is really hard i mean we have six nuclear physicist mathematician phd is working on this and have been working on this for three or four years and nobody remembers this but when we debuted our prototype at devcon of nightfall the gas gas consumption to complete a single zkp transaction cost over a hundred dollars right this was not a viable solution and uh it was incredibly difficult it was obscure it was expensive not many people thought it was possible but there was an easier way of doing privacy it was called put a private blockchain together and so that's what everybody did and um you know private blockchains have their own immense problems which is why they've largely fallen flat because signing up for some kind of proprietary private network that's really expensive is is it is a deal killer and you know i'll be honest with you i spent years inside of ey dealing with the intense skeptics who thought we were wasting money on all this zkp stuff they're like you got to get with the program and start selling more private blockchain stuff and it's uh the fact is that technically private blockchains are much easier but it's a dangerous short-term answer because nobody really wants to be on your proprietary private private network so privacy is the be all and end all of enterprise blockchains it's just that the way that they chose to do it wasn't really scalable in the long run i think paul said it really well and i think what uh what i'd have to add is that the the standing up of so much private blockchains over the past two three years within a within enterprise if anything it's a benefit because we've learned and learned the the shortcomings there so um like like you said we have focused on privacy it's just looked different behind private walls but we've seen the the challenges and and getting people on the same consortium um on actually building multiple systems on on top of a blockchain versus having separate blockchains for all these different proof of concepts so it's um definitely helped us learn what we really need out of a blockchain system so i've got a quick jab here paul um thanks for all the fish um but where's the identity solution for the enterprise that is open public domain so i i think that's one of the areas where i'm hoping that others will step in right we've we've thought really hard about what is the thing that we can contribute that's the most used and we decided to zero in on privacy um uh it's interesting that there isn't yet a good enterprise privacy uh identity solution because uh about 18 months ago i thought wow there's so many of these consumer identity programs going on right we should not do something there because it'll become too crowded for enterprises then maybe i was wrong although i i do know microsoft is working quite a bit on enterprise identity so i you know i think uh our impact can be bigger when we choose to do a small number of things really well and i'm hoping that others will choose to pick identity and make that their success case i think joe's nodding so yeah i mean i i don't i don't work on that team i am familiar with you know certainly microsoft has um probably the largest identity system today for enterprise um with active directory and other forms of traditional ite identity i do know there is a team that's also working on a decentralized version of identity um which i know basically nothing about except that team exists welcome to microsoft a massive company but it's exciting to actually hear that or it's reassuring to hear that you know i do agree with you paul that there are certain aspects of you know it's like these are things that we want to focus on these are things when we want to be really good at and you know microsoft has decades of software development and technology resources available to them that enable them to actually put effort across myriad opportunities with respect to um technology innovations something like decentralized identity being one of them great i got one last question here and this is actually you know uh near and dear to my heart uh in uh you know bringing together uh you know folks from the the enterprise perspective and uh inviting folks to join um you know there's there's one area that i um didn't quite uh get onto this stage um and the question is uh how do we get um governments uh in public industry involved in in blockchain um and you know that that was actually uh one of my stretch goals uh for these sessions to get some of the the folks that i met uh at east denver uh and you know the governor's office there uh you know begin connecting the dots uh with with those folks so um you know it's happening at a certain level um you know but you know the enterprise you know tends to be reticent and private uh and according to off at his first attempt you know in uh public industry and government is even worse uh i started my career often in defense uh and you know with the technologies that were we were uh you know using that was approved uh you know was 10 to 15 years old uh just because that had been what it uh vetted um so there's innovation happening um you know i don't know if anyone has any other uh comments that they want to add specifically to that but uh yeah yeah you know yeah i mean i i have a i i actually think that the timing certainly and i'm going to speak from a u.

s centric point of view because i i i'm familiar with my my country's political and economic standing right now um i actually think if you look at what has happened over the past decade with the decriminalization and legalization of marijuana it was not because people realized that you know pot isn't that dangerous of a drug or whatever it's that there was money involved and a lot of these states were having budget shortfalls and deficits that they saw an opportunity to actually generate additional revenue from taxing marijuana and hey why not let's decriminalize it this could also potentially free up resources from the criminal justice system etc etc etc now if we map that to something like blockchain look at uh you know paul's case study with microsoft and xbox i mean we're talking about a 99 reduction in the amount of time that it took uh to to pay out these royalties uh the 40 um just overhead administrative costs so i think especially given some given the the covet environment and how a lot of state and local businesses excuse me governments are struggling to kind of maintain their balance sheets this presents an opportunity i would say for you know developers savvy product people to approach folks at the local level and say hey have you thought about you know adapting this type of technology solution that could save you x amount of dollars and i think that is the type of thing that could be the kind of you know trojan horse if you will for lack of a better phrase to get the idea of utilizing a public chain and understanding how um blockchain-based applications can be levered inside of the government that's great it's a great product development story um all right well uh i i'm gonna wrap it up with that uh paul karen and joe uh thank you so much this was uh you know fantastic discussion really appreciate your time thanks for having me thank you thank you uh all for giving us your time today and uh for an amazing conversation so uh with that we are ready to move on to our next talk and i'm super excited to welcome abby who's going to be talking about radical and for those of you don't know she works at radical and uh she will be covering a history of kind of how collaboration has evolved in what a decentralized version of that feature would look like