From Scalability to Inclusion: Enabling Mass Adoption by David Lee Kuo Chuen (Devcon4)

today I'm gonna talk about from scalability to inclusion and I'm gonna touch on a few concepts the last Def Con that I was at was two years ago in Shanghai and the last two days I've been attending a lot of talks and I see there's a great difference and I'm gonna go to the summary and just discuss what we have I think you have talked a lot about technical scalability over the last two days and as well as two days on layer one and layer two I'm not gonna touch on that but I'm going to go back in time to a nick szabo talk about social scalability which I think vitalik has talked a little bit about that over the last two weeks about social scalability it is the ability to overcome the mindset and it is myself who limits who and how many can successfully participate and this key to mass adoption it is about human limitations not about technological limitations or physical resource constraints that we are talking about and if you look back I have five DS for this scalability for crypto economies and the five DS or there I'm gonna go through every single one of them it is a process that you will see that possibly our community will go through and the first one is digitalization and digitalization is about having new business model using digitize a digitization so digitalization is different from digitization and we are using digitization to come up with new model and what we are seeing now are some very interesting development a lot of people are trying to tokenize a legal entity which was Satoshi has given us a gift not to deal with legality so now we're going backwards and try to tokenize a legal entity and by tokenizing legal entity there's a lot costs the cost of governance a compliant cost and you stop yourself from going cross-border and those are the cost that is embedded in trying to tokenize securities and tokens securities has his own reason written carry six and he now put a layer of token which is technology on top your technology risk management has to be good and you have increased the risk of the product but at the same time you may only increase efficiency by a little and I'm not too sure how much your mass adoption you can find because you're serving the same customer you're having a same business model there's no improvement from what Satoshi has given us from ten years ago so instead of that we always talk about security token the other ideas is token security we tokenize anything that is not securitized we tokenize anything that is not in a legal form for example a cow token a livestock token and in that case you then have a new set of token law to take care of token security so we may want to move to a different direction from security to token to token security because it releases us from all the localized legal and legislation that we have to deal with so this is where our mindset which is the scalability social safety is to bringing the extruder as ice back to the acromion financial system through digitalization and this is what inclusion and adopt as the mass of the option is about and the second and third is this intermediation and democratization I gave the example of the livestock token you can't organize a cow which is not a legal entity you can DC me me you can this in intermediate that rent-seeking Landers to charge a hundred percent in Miyama we have somebody from Yama who knows that and we can actually then put them onto a Insurance Scheme micro insurance scheme because now we have a token you know the GPS position you now have it on blockchain you have identity of the farmers the insurance company they are willing to insure and once the incidents that were willing to insure you lower the risk of that product and the risk is lower you will be able to get microlending to learn and single digit or double digit and we had reduced the landing rate from a hundred percent to sing a digit or double digit and that is the beauty of tokens security and my set is to balance the profit and social objectives so there is not a mindset that we must have in mass adoption because charity is not going to have us to do mass adoption at all you have to combine both profit motives as well as social objectives for sustainability and the 40 is decentralization FinTech companies are good for inclusion we have seen that in a leap a we have seen that in Kenya m-pesa and so on but they are still centralized ok there is a major problem of doing financial inclusion to centralize no government would like to have a centralized FinTech company in the country the control and higher payment system so that is the danger or centralized system and what is decentralization decentralization is actually to me a dynamic and continuous process of distribution of trust and that is key to a lot of design thinking that you might must have and what I have a blockchain that you have whatever decentralization at Genesis is always centralized so when you try to do the centralization it is a continuous process ok a decentralized system can be centralized tomorrow if they're left two of us doing the mining so that is a thought that we must have in the back of a mind and we always must remember that all chain governance are mostly centralized so there must be a distinction between on chain and off chain governance and we don't mix them out where you may talk about decentralization it's decentralized on chain and most of them also type of chain governance is centralized and we can do better off chain and on chain to distribute trust ok and especially on the child chains as well where we start so it is important where we have inclusive blockchain with open blockchain private blockchain consortium blockchain secondly that layer child chains that we start with centralized governance but we need to controversy decent rice trusts and my set is a dynamic distribution of trust and that is very important for mass adoption and the 50 is diminishing oneself and that is the best egg or satoshi nakamoto he disappeared besides being diminishing himself he disappeared and there's no single point of attack there's no single point of failure and this is the hardest and the most essential okay we can look at a lot of copy corporate Fiat stable coin which is doing the reverse instead of this intermediating we are this disintermediating so we are adding another layer of intermediary in the design thinking of the coin that we have when we try to put something in between okay so we shouldn't be this disintermediating okay and you know give you a maximum list and we are making ourselves as a center and if you have super nose you are drawing attention to yourself and that is the mindset that we need to have which is we are just facilitators we are all just facilitators we are all here just facilities and our task is to minimize a single point of attack and failure and there's our mission that's why we are here in Prague okay and the signs are not good for the community for over the year we can see there's still a lot of concentration mining yes there's AZ resistance we're talking about concentration of wealth we are talking about concentration of developers we still need a lot more education we are continue to expose ourselves to the body trust in both soft and hard where they we are talking about in the last few days so we have security talk over a scam I see oh we have feared stable coin which actually distracted us from what we try to do from 10 years ago which is to dispute trust and lower the cost of trust so there are dependence on third party trust is that the lowest so we have the first layer versus the second layer where it's difficult to get consensus in the governance of chain but it's better to have changes and innovation on the second layer because it's a little bit more centralized whether those are the good development we'll leave it to everybody to decide but we need more than technical and social scalability for mass adoption and the focus and switch in this few days and what we have seen in the dispute days is a lot of talk about your knowledge prove a lot about secure multi-party computing a lot more about full homomorphic encryption and very little about secret sharing okay but data and smart contract privacy pen testing code or date and we are talking about open source software as well as open source hardware and that is interesting but again we need to think about distribution or trust because third-party trust is something that we have set out to ensure there is minimize so when we look at all these well trusted as if it environment and SGX and more that we have we have to bear in mind the design thinking of distribution of trust for mass adoption okay and safe mass adoption privacy protection method adoption and the success though not perfect a privacy protection is drawing attention worldwide and this is what the community has done well in terms of impressing a lot of investors as well as government the world mass adoption will be triggered by more major hex and as soon as there are more hacks especially when you're Prime Minister data stolen and health data is stolen a country like Singapore will pay more attention to crypto and I'm sure law you know that the country I come from Singapore our date our health it has been stolen and what is never discussed a lot in this conference is where it's a sustainable demand coming from because throughout the two days a lot of us were discussing about the supply side the technology scalability scale and also sure scalability but where is the demand coming from we are talking about mass adoption so it's important to look at decentralized financial inclusion and that's the key to mass adoption and he entails quite a few things this is the statistics that we need to know 1% control 50% 12 1% entitled to 82% of the income last year this is the Constitution we are in and we have big numbers who are willing to join community and we have to bring them back to join us and this is what mass adoption is about it's about the demand side okay the beauty of it is that in this countries these countries are not in them there or in Asia okay they have hundred percent handful and penetration and we have a digital revolution and at least four hundred and thirty eight million in ten countries in ASEAN Asia a Southeast Asian nation that ready to be served and seventy-three percent of them do not have a bank account they have a handful they have a cow you can tokenize the cow on a handphone but they don't have utilities they have no toilets but they have a handful and it'll blockchain so that's why we should be that okay so the demand is a decent trans inclusion that greatest demand comes from the excluded excluded other customers that we have these are the people and I said we are we have to try to convert day and set to live TV SS we shouldn't be working with stocks and shares we shouldn't be working with various state we shouldn't be working with that instruments or we work with them but with less energy in those area the community should direct the attention to trying to convert or the dead and sex to live teacher that says like a cow to a farmer as a sheep to a farmer tokenizing the non securities and thence securitized the tokens is what we should do not to tokenize the security and then subject ourselves to another layer of legal compliance we just need one layer which is to tokenized non securities and then look for a new token law and request the government to have a new token law and not subject ourselves to all securities law commodity laws and so on we one new token laws okay and fractionalize account that you can run ten percent five percent of cow yama right here in Prague and heterogenous it and now you can own the calf different the cow you can the milk different from the cow these are all the things that we can tokenize with IOT with convergence of Technology and by serving underserved and we can we can solve the greatest mystery of all this economy is going to leapfrog because they have no regulation to deal with any of these we devise our new token law so that they can get cheap capital by a globalized crypto funding that we have here for them and there's a convergence of tag and this is Nick stage our sea in the next three to four years I can see most conferences talking about convergence of tank where blockchain is the driver where et VM is the driver and sustainable green business model that we don't destroy anymore for us we use drones who are on the blockchain we use mesh networks on the blockchain we use satellite payments using token we do not want to build more rows and destroy more for us we just want to use blockchain to do a lot more green advancement so this is the Penn critical enablers of mass adoption they may be contradicting to each other but this is what I thought you have to have fast stable internet connection and if there's no internet we can use mash Network and that can be tokenized we can use we need to have interoperable varying transfer gateway we need her privacy protection for user we need strong security framework we talked about the last two days we need open source and trust distribution governance and this is lacking we need to discuss about governance amongst ourselves cell governance digital literacy and UX which is still very weak we need digital ID okay we need compliance easy okay we do not want to subject the assisting law we don't mind to subject to assist the new laws that's favorable to the token world but not all regulation and comprehensive data and Oracle's ecosystem which we talk about decentralized oracle yesterday and talent knowledge and skills which is why we are all here to exchange views and share whatever we have now this is the market size look at that for remittances welfare a donation ownership of data healthcare have you ever found yourself donating to a chair tea and you never found out where your money goes so this company attack they have remittances looking they have welfare transfer a transfer health care it is a profitable business it's a combination of profit motives with social objectives and this is the direction we should go using blockchain with more transparency and this is a market size it is big you can accommodate many of us just not there's just not enough people working in those areas and we have the fur Busters baby born on blockchain and this is also a company that we we invested in because when you are refugee you have no identity you have to be given an identity once you have identity what they give birth you need money so what happens is that a tear has given the money the lady could go to the hospital and gave birth now the danger is that when the baby is born whatever medical expenses is taken away by syndicate and again blockchain will allow that expenses be spanned specifically in the hospital for medicine for the baby so this is a baby on the block the block chain and it is not a myth it is really happening okay and know what you know what government are now investing into blockchain Singapore government Irish government they are all investing token well Jim projects and then in Miami you have the token which I mentioned it is not a dream it is ready life okay you can tokenize a cow and you can you can see the years is that's attack he wants to break it there's no more insurance but basically this is how you take on to your blockchain and again the government raw break happened 60 million counts to be tokenized this these are these are the project that can be on a theorem or can be on a lot of other blockchain that we can talk about and have you ever heard about cypherpunk government is there a oxymoron right well what is happening in Singapore Rubin one using it here amassing dollars for international payment okay it's really done okay Reuben - has just been announced okay and we have coda we have a hyper ledger and we also have quorum and they're using encryption they're using zero knowledge and is the central bank I'm talking central bank who knows more about different technology than sometimes than us and then the open trade blocked in by the government that and the government is a gnostic and harness the backs technology and they expand into the open virtual space and the best thing you look at a report you just google rubin to the report says that they would diminish itself by providing infrastructure the hell I saw to she the government would diminish themselves okay so you here see that last to priestess is the excluded will change the world because mass adoption come from exclusion okay if you are doing exactly the same thing as the government and cooperate then it is not sustainable because they can do it better than you you try to do security I don't think you'll be better than any exchanges that's why this yeast of compliance is he too much of a develop economy thinking in design for example why think about Ricardian contract where you can have a new token legislation just prove a new token reg legislation there are many many countries in the world that will be able to have that and that's why investment should go to places that lay out the Reg happen and that many more damper was to work with the etherium community and convergence on technology brings convergence or profit and social objectives for the first time in history we are not charity we could do that that's why the leap frogging economy may have mass absorption before others because there's no regulation and so on so last slide the complete we are here to complete a system not to compete with existing organization that the cooperates or the government because blockchain will token incentivize collaboration we are not talking about production efficiency making cheaper faster better we are talking about collaboration efficiency and the token itself allows us to allow our interest and this is important we are here to complete the ecosystem we are not here to come we are here to serve not to rue we don't make ourselves as the center and this is important to note that perhaps the manifesto 2.0 may have to be rewritten this is just my view and that's all I have for you today thank you very much I think I have four minutes for questions [Applause] Oh what is the support for the idea that part of what will help mass adoption is supporting privacy concerns like I might I know that that's a huge concern here but I don't get the impression from the way people currently use the internet that that is the concern of many people of course that might be my view coming from certain Western places I think there's a key today's all about privacy protection and high exercises about privacy protection and the entire society is about having independent decision so every notes a blockchain every single individual for their own human dignity we must have our own independent decisions and we have to ensure that by having privacy protection so it's very important to focus on a lot of I think the last few days we talk a lot about combination or AI and blockchain so that we can do a lot of analysis without actually knowing what is the metadata and the rotator itself so I agree with you that this is something we need to do and is important to work with government that willing to diminish themselves so that allowing individual to have their own privacy and this is this is key to the entire exercise and what we are talking about here perhaps I can bring it out rightly is exactly what what it is about privacy protection not only about privacy protection but also a lot more data that we have yeah there's no more question there hello so I am when it when it comes to sort of development initiatives and and tech stuff helping development I tend to be on the cynical side and I think that's kind of an important thing to do is is think about the risks and think about but what can go wrong and what can go bad and and if you've seen Zuckerberg testifying everybody sort of watch this and and Myanmar was referenced many times and the adoption the mass adoption the really quick and I think what you're talking about is true is in in these greenfield markets people will adopt something very very quickly when that happens I want to know for in your opinion and that perhaps maybe in the context of hacia and what are the big risks wherever where the risk points I think financial literacy is one of the most important thing and also privacy protection literacy which very few people talk about and I totally agree with you that we have to be very careful because technology is actually neutral even though blockchain is a little bit more for the weak for the small for the neglected but it's about human the human itself that can misuse the technology I mean we don't have the wisdom we could destroy the entire human race and that's the fear that we all have with AI and the rest and not so much with blockchain but still we have to be very careful and what you say is correct but I see new business model coming out that people who are not privacy protect back protection literary or financially trade there are new business model that we can help them to ensure that again we have a trusted third party and how do we these and tries or these distribute the trust of this trusted third party new model that actually protect the private keys or protect their own human dignity we need to think deeper and this is what I'm here today for to trigger the thinking about we need to continuously dis real trust we should never stop we should never stop and we should continue to not to trust the third party but we cannot avoid it it is a process that we have to trust the first party just like there were only two people mining Bitcoin ten years ago ever started just hey oh and and Satoshi so they started as a centralized Bitcoin and then it start to become decentralized but it has to be the continuous process so we need to continuously to remind us in our design thinking whatever you design whether is and clave for encrypted data that we draw out or wherever or is that Oracle which is decentralized we make sure that we have this effort of continuously distributing trust non-stop and that's the only way we can protect ourselves I don't know whether answer my question yeah okay thank you very much thank you