Open Source Banking by Richard BurtonA

working on the problem cool I'm super excited to introduce you guys to our next speaker his name is Richard Burton and Richard was one of the very very very earliest members of the etherium team one of the earliest contributors he did some of the very original design work mantheon project and Richard is the founder and CEO of a project called balance also a good friend and balance is building the future of the decentralized bank and believe is that accurate all right I'll shut up now and let you take over thanks Richard join me in welcoming Richard so I did it's working fantastic great yeah is it the slides or sorry perfect there we go great cool so yeah my name's Richard thank you very much for your time I really appreciate it yes I guess I'd love to just walk you through kind of my process of what I've found that I'm excited about with regards to etherium I think when when I stumbled across the rabbit hole that we all talked about in 2014 I was like I was wondering what you would use this system for and I didn't really have a clear picture of that and then when I rejoined the community a couple years ago things would start to become a little bit more clear and certainly in the last six months I've found that the thing that gets me excited is this notion of open source banking so I'd like to take a step back and say suggest what I view aetherium as and it's today it's a slow expensive kind of trustworthy and that you can verify things were computed and unstoppable computer and there's lots of interesting things that we're doing with this computer and lots of interesting properties and software that's emerging out of it and particularly those those two properties that today where it's slow and reasonably expensive on a kind of per transaction basis when you compare it to Amazon we're optimistic that those things are going to change but but there's actually lots of really interesting things we can do with it with it today despite some of the costs and despite some of the constraints around speed I've read an awful lot about how banking got started and I kind of occupies 20% of the world economy and when a bank came to visit visit our offices I wanted to check that that I kind of had the right picture and when I explained that as Maya as far as I understand it banking 9 major functions kind of go around maintaining a ledger which is obviously kind of how a blockchain operates doing credit scoring exchanging different kinds of assets lending assets out to different people which generate kind of returns on savings ensuring risk and in identifying people's access rights to those those funds and we kind of pay the financial system kind of 20% tax on the world economy which does a fantastic job and we've had such an enormous amount of growth from this system that overall it's done a really it's had a fantastically positive impact on the world economy so it's a valuable service and then if you zoom out you kind of imagine you are sitting on the moon and looking at all of these banks every single Bank is recreating this software they're recreating these major functions and putting it behind firewalls and doing that for a very good reason because that's the way software has been designed and so you can imagine there's thousands of programmers all writing exchange systems or Ledger's or tools for credit scoring or all kinds of systems and really a lot of that work is actually overlapping because they can't share it right now there isn't the kind of infrastructure or there hasn't been until recently an infrastructure to share some of these systems but what's happened in the last year is and many of the projects are kind of either launched or announced things in the last 18 months it's just a kind of Cambrian explosion of projects building on top of aetherium in kind of every category of finance whether we're looking at kind of lending or exchange or the creation of credit scoring or insurance or exchange user interfaces and derivatives in each piece of the financial stack there's been a huge amount of activity and YAG like to give a shout out to felix from set protocol for putting this together I think it's an amazing overview of just how much activity there's been in short a short space of time and I kind of started asking myself why this was and I'd like to kind of highlight a couple of banking trends I've had the opportunity of kind of getting a little bit of insight to and the first one is the idea of 24-hour banking where in order for ATMs to work you have to do this incredibly complex work to maintain the mainframes linked to the 24-hour service on an ATM and a family friend actually built the systems that did that in Europe and hearing about just how much work it was to to kind of bridge this gap between the old system and the new and maintain a kind of 24-hour service it was absolutely incredible and then I spent a bit of time at a company called stripe which is a payments company and there there were these kind of several engineers who were kind of revered and they were the ones who got to kind of touch the money but everybody else you know kind of keep stay away from such a serious function and what struck me is that since the release of Bitcoin is is is that anybody has an opportunity to write code that touches value and because these systems are open-source it means that any developer or any team can get started right away without having to seek permission from the banking system you know stripe we took eighteen months before they got to kind of really open up their service where as we see kind of 50 projects right now working on payment channels in different variations and so what I've noticed is is just that the number of developers who get the opportunity to write code that touches money is going from say kind of hundreds of thousands globally to millions and while consumers don't care about open source at all they do love the services that they benefit from with with by by kind of enjoying these open source services and hopefully over time we'll see much better services because any developer can get started straightaway and I'd love to just point to what this I've been studying also that the history of Linux and how Linux kind of just sucked the operating system market into its orbit and I think that the exact same thing is about to happen with all of this community building financial services I think that you if we study the history of Linux it's almost unthinkable that Microsoft would now be a Linux first company but but that's where they found themselves and I think that this community of projects this system that everyone's building is going to do to the banking system exactly what Linux did operating system and simply because we can all kind of learn from each other we can plug our smart contracts together and we can benefit from looking at the open source code balance we hope that it's important to also have an open source user interface so that if people want to help us improve it and they are around 50 people have contributed to the project that we can weave together these protocols and initially we're starting with lending from Dharma kind of indexes or market following sets of tokens using the set protocol and then derivatives or insurance using exchange and Nexus mutual as well credit scoring using the bloom protocol interest-bearing accounts with compound finance an exchange on 0x which I'm sure many of you are familiar with and and it just this stuff kind of really wasn't possible two years ago as Irene said the community but because of the amazing work of so many people on this the shared economic infrastructure it's suddenly becoming possible now and we also hope that rather than just selling a token there are actually real business models to be built in this financial system and if we're open and transparent about the fees were charging we can kind of offer exchange or the ability to refer to products that people might want to purchase within this system and then one of the big trends that I think will emerge over the next year or so is the money you can earn by kind of allocating your stake to the correct validators and cosmos or perhaps other nodes in the etherium network there's there's a lot of user interface challenges around doing a doing staking and this is something a prototype I'd love to just show you that there will be launching later this year where we're kind of doing student loans for people who attended the programming course that I attended and this will be combining you know podamos protocol with our user interface um this was built in kind of three days if we'd wanted to do this with the dollar it would it would be an extremely difficult project but but kind of weaving together these open-source systems you can spin up new ideas and ship them really quickly and this dark this this loan is being denominated in dye which is a stable coin mapping to the dollar and and so it's really cool to see all these systems talk together and and the experimentation that can come from come from it and just at the end I'd love to briefly show you some of the work we've been doing and and what it actually looks like yes so just get out there thanks so much so yeah so our product on the web is called balance manager and then we've we've released a standard called Wallet connect and so the way this works is I have a wallet on my phone which is launching shortly and and then I scan a QR code to login and and sync it sync it with the browser and so and so now I can kind of process transactions or send things across and we're going to be adding lots of these open source financial services both to our mobile products and a web-based product so yeah so hopefully this has been a good overview of what gets me excited about aetherium and in some of the work we're doing to kind of further this and make it easier for everyone to get onboard it to this financial system so thank you ever so much for your time and I really look forward to seeing what you build Chase [Applause]