Davide Costa, Antonio La Gatta Chiara Munaretto - RWAs and Decentralized Applications

for Okay. Well, good afternoon everyone and welcome to this uh panel about RWA's decentralized applications and uh quantum computing. I have the pleasure to be joined here with two exceptional experts. Uh David A Costa, IT engineer, blockchain developer and founder of food chain and quadrants and professor Antonio Lagata, quantum expert, researcher and award-winning innovator across biomedical, defense and energy sectors. So I would maybe start by asking you just a quick uh introductions of yourself uh to give a little bit more background.

Thank you.

Yeah, thank you Kara. Thank you to the organization for being here and uh uh I've been working in a blockchain space since 2013. Uh started with Bitcoin mining and so on and then I immediately start uh working on the application of blockchain technology in industrial uh in the industrial world. So uh jumping immediately in what now is called with a huge narrative as RWA. uh it's something that uh I've been working for uh almost eight years uh in different sectors.

So the food and beverage, textile, energy sector and so on. Uh and now we are here talking about uh in this wonderful location and thank you Paula for the invitation.

Yeah, thank you PA, thank you Kara. Uh yeah, I'm I'm in some um technical table uh with the Italian government. So mainly into the um table that is designed for the quantum strategy for the Italian environment and uh my personal experience is into the physics and met typically for example I'm an expert in the uh right and solving differential equations uh and mainly the okay and also uh ma mathematical technology for reduce the complexity of differential equation or problems. uh then mainly this kind of uh problem reduction can be used for deploy the problems in to the quantum computer. So that's

perfect. Thank you very much. I will encourage one applause to our speakers to get started. Thank you very much.

Okay, great. Thank you very much. So I think just like to get started maybe to understand as well in the room how many experts in quantum do we have here? Maybe just raise of hands. Okay.

Well, that like study the basics. Okay. Good. Uh RWAS, they're like active in the space. Two hands up.

One, two. Okay. Decentralized technologies. I guess everyone has a good understanding more or less. Awesome.

So, I think let's start with uh Davidida with what's happening in the in the space right now. uh we know RWA and tokenization is basically everywhere. Uh companies uh are highly talking about it. Uh can you give us a quick snapshot of the current state of uh of RWAS?

Yes, thank you. And uh yeah uh beside the the raw numbers about tokenization that uh can be between uh estimated between 50 and 200 billions some those number are I don't care about those number too much uh I want to bring here in Napoli to nap the my my personal experience across different Ethereum event I've been uh talking in uh Denver in uh in in February uh at that RWA day and uh then I've been the opportunity to be in Khan for the the HCC conference and uh I can guarantee that this uh as many of you has listened yesterday is not just narrative is not just hype is something that is happening. So my my first uh statement is that uh and I can say that because I saw uh with my eyes many companies big companies Black Rockck JP Morgan uh standard and poor people earnest young people from all over the world uh talking about this and saying clearly that they the process is already started. So it's not something that maybe could be in the next future. uh companies are uh starting tokenizing everything basically.

So we can talk about uh uh treasury bond, corporate bond, uh uh real estate, uh gold, metal, whatever. So uh it's uh it's it's a matter of time that this uh will become in my opinion uh huge. So that uh listening to the R rwa de incan uh listening to the the founder of and azarov say that we are really really early in this process. Uh he was saying that we are at least between one and 2% of the a potential 400 trillion markets. So uh it's something that uh I believe I believe that is true.

It will not happen uh tomorrow or the day after tomorrow but in the next few year we will assist in something big in a revolution uh also related with the defy. So the the RWAS will will will be strictly uh bonded to the DeFi uh allowing traditional the the merge between traditional finance and uh the blockchain space that uh it's something that everyone will uh still waiting for years that would happen and now it's happening.

Yeah. And I think especially when we uh see the potential of the market itself. So you said like 400 trillion is quite big. So we need to think about the infrastructure underneath as well and indeed uh quantum may pose a cryptographic risk to the to the infrastructure itself. So maybe uh professor you want to uh expand on what uh the quantum th is or what is the state of uh quantum at the moment?

Yeah. Um basically so it's very important to understand that the quantum computer is so we are talking about quantum computer but technically there are three different architecture. Uh if you want to later we can talk about all of three architecture but the most important in my opinion which is the real threat for uh the uh the application that we are talking about are the quantum computer based on the Atonian paradigm. It means that technically we are not to develop the computer like we typically here into the TV show where we have the the the quantum gates then it's not this kind of quantum computer but the one that is based on the Miltonian just for tell you which is the Miltonian uh I I so this is not very quantum specialized audience so so pardon me if I use a very simple example just for tell you uh so so which is the basis of this kind of quantum computer imagine that you want to u find out which is the deepest hole on the moon. Of course there are many way many algorithm that can discover which is the deepest hole on the moon.

Uh yeah you can go and down down down down up will be possible and then that's the the door but of course there are many other holes uh close to the to the one that I right now found out. Well the the most smart way to find out the deepest hole on the moon is just to flooding the moon with water. the wall moon and then rise the temperature of the water on the moon boiling the water. Well, the deepest hole on the moon will be the one that is the deepest one. So, so the last hole in the moon while the water remain is the deepest hole on on on the moon.

Well, this approach is the approach of the Hamiltonian quantum computer which is extremely you know powerful and but so which is the real problem. The real problem is that I have to change the mathematical problem associated with the cryptocurrencies S sha 256 into another problem that is the surface to shape the surface of this moon. Well, this uh swapping uh in problem is called is say write the miltonian of the associated problem. So if we are able to write the milk of the problem well we have a powerful machine powerful technology to solve this problem. This is the way that the so the smart people are are working on to try to bridge you know the cryptocurrencies and and the old technologies associated with it.

And in terms of what do we what do we see in terms of like the public itself because you said that this is what smart people are working on. Is it something that the public will see an impact or

of course well of course the first impact will be and you know impacting newspapers. So the people will read some you know paper that say okay we breach uh this uh technology or this other technology. Uh but unfortunately when we reach the so the goal with this technology uh this is an so will be so we call it the so the quantum day. So we will destroy most of the of the technology that today we use for

can you just explain what a quantum day if uh no one knows in the audience

I don't know

just no just like what quantum day means what is the

okay okay well well well the quantum weight means okay there are many definitions the most common definitions when the quantum computer will be available to solve and bridge the the cryptocurrencies mainly most of the you know the people are working to bridge the bitcoin because it's the one of the easiest way to to so so so so technology to bridge from the quantum computer perspective of course and then the quantum day is the day where a company or a industry or you know uh you know um you know US or China will declare or will demonstrate that we'll be they will be able to breach the the cryptocurrencies technology so that's the the the the yeah so the day

and do you think that we are preparing well enough uh for this uh quantum today

or what do you think are some of the steps that companies are taking in the space right now?

Un importantly of course not because there are most of the people that uh still believe that the technology are enough resistant to the to the quantum computer. Uh there are someone that is working to introduce some quantum resistance but it's not an uh you know it's not into the backbone of the technology. It means for example if you if you consider the bit 36060 they're just introducing some robustness into the quantum uh you know technology but only into the into the last mile of the of the of the of the transaction but because for example bitcoin is based on dash function and dash function still is the backbone of the technology h this is the weakness that we can you know address with the quantum computer and it's very interesting uh for to to know that the most of the people are not aware about the technology of the quantum computer itself because typically the people uh knows and read the performance about art so I don't know IBM or rigetti or IQ which is technology based on the on the quantum gate paradigm and you know on this kind of technology there are a lot of uh you know things that we still need to be discovered before to make available the quantum computer that by the This kind of a technology is turing complete. It means that it can solve any kind of problems. But the most uh unknown technology is the one that I described it before.

So the one based on the Miltonian and for simple reason that to run with this a Miltonian quantum computer, you need to be an extremely skilled in Matt in a special field of the M that is not very common. You need to know I don't know the A Miltonian. So the the the so the il space or barak space. So so there are special uh you know very complex part of the met that is not very common also into the ma mathematician community that's reason why we don't know very well what the the those kind of guy are working on and and which is the status of the art and for you know the top of the the so the cryptocurrencies technology generally speaking.

Yes. So it's actually an actual development of the knowledge itself of the space of the technology and could AI help in this if humans could not develop fast enough to keep up with the development itself and we just leave it to AI that they process these complex mathematical problems that you were talking about. Yeah, AI of course will so will be one of the component to to increase but but uh it's it's strange and weird that the real problem that you have today we don't have the right to m to solve the problem associated with the one the computer so so just for tell you one simple uh example uh the the Atonian equation that I described before the one that described the surface of the moon must have another mathematical characteristic which is called a median it means that he so the matrix associated with equation and the so the the the transpose of the so the ninth degree of this matrix must be equivalent and the reason is because into the quantum computer universe there are infinite more solution that the what those solution can be represented into the real world. So technically into the quantum computer there are some solutions that we cannot take out from the quantum computer because the the space uh inside the quantum computer the space of a solution inside the quantum computer is extremely larger than the space of the universe that the real universe that we have you know so doesn't exist the things that we can measure imagine for example a people that never seen the color never seen is totally blind since he born you know in which way you can describe to this guy which is the color red you know so so so that's the problem the solution inside the quantum computer are extremely more complex than the one that we describe. Then that's the reason why we need to write an equation that not only describe the surface of the of the moon but must have an equivalent into the real world in a way that we can measure the solution inside the quantum computer

translate basically.

Yes. Yes. So translating something that we can physically measure you know

ass the main problem is into the mathematical field not into the science. This seems strange but that's true.

Okay, thank you very much for this deep dive. Uh going back to the RWA side. So we spoke a little bit on let's say the way the threat uh within like the Qday if we go back to that uh 400 trillion market. How are we approaching the 400 trillion RWA market? Yeah, despite the fact that uh the Qday someone today said that will be some sometime between 2030 32 uh people are not scared.

people of the company are tokenizing uh asset all over the world every day. And uh I I think that the the important thing to understand now is that u around the RWA concept which is a very wide concept and very wide application there are company are building tools for that. So in my opinion one one of the best tool for for for this is uh provided for example by chain link CCIP. Uh recently they announced also uh the digital identity. So the CC ID so the cross the possibility to have a digital ID uh like uh we have seen in the space many of them uh provided by polygon provided by other uh chains and uh pro have the ability to uh move crosschain those uh digital identity uh and this is fundamental because I I seen uh also yesterday that one The problem is fragmentation.

So uh we have a bunch of tokenization of Solana on Ethereum itself on L2 of Ethereum on Avalanche and and so on. And uh I think that chain link is going to the the correct direction. So they are providing an interoperability framework also for the uh the digital identity. So in this case, do you think that it would be easier to indeed have like an in like have more like bridges and make the entire space more interoperable or to actually add a layer underneath in which like all different chains rely on for tokenization specifically?

No, the digital identity is something that in many regular framework are needed. for example in Mikar uh it's something that is extensively uh approached. So what we we are seeing is that there are different digital identity on top of the of the chains or or even the layer two and uh uh at the moment those those identity can just work on this on that chain. For example, if I I have my digital identity on Polygon, uh I I keep using on on Polygon and uh the the the possibility to to use my uh to to to to cross to use a crosschain mechanism to use my my preferred digital identity into another chain is something that will be a gamecher for that. And uh as a second tool that I've seen uh very important in in this process are the verification layer.

Uh I want to make a simple example because it's a uh is is a topic that is really complex to explain. uh we we have been working with Trit which is one of the verification layer emerging verification layer uh for years and uh one the most important use case that I've seen uh during this past month is the proof of fund. So for example, I want to have a a simple example, I want to have a mortage uh and with the new the new regulatory, I can uh provide my cryptocurrency as a as a collateral for uh my mortage and uh but I want to provide the proof of uh the the the founding cryptocurrency uh without providing my my public address basically. uh but uh the bank want to be sure that I I I I own this fun this fund. So using a verification layer, it's possible to to to provide this information to third parties uh with extremely uh with 100% uh security on the privacy of my wallet of my funds especially if I have a huge amount of fund and uh and these tools that there are many use cases beside that but uh uh the digital identity tool and the verification layer tool are something that uh are very promising.

to make this growth still uh faster

and do they use zero knowledge proof or how the encryption itself work and then I'm I'm going to also ask like a follow-up question your hand like because if we find this very useful applications but then we have a big threat on the quantum side how encryption is going to change but first encryption as of now and then encryption later

yeah there are very different patterns of uh using the verification layer the some some of them use ZKC ZK proof some others does not use ZK proof but use some kind of TLS notary technology uh and uh I can I can already say that any of this technology uh could be breached by the quantum computer tomorrow so uh I I can I can tell you that for sure even I'm not an expert but uh uh yeah there are many of them many of them and uh any of them is uh basically based or on ZK proof or uh or digital signature algorithm.

Okay. So the big question uh as we move towards quantum how are these uh encryption uh model going to be challenged and what could be the potential solution here? well from from the quantum computer but this is generally speaking with the old computer the so it's not important which is the name that associated with the with the encryption because uh the the things that we need to create uh those kind of encryption is to have an hard m hard asymmetric mathematical problem. It means that we need to have a problem that from mathematical perspective is easy in one direction and must be extremely hard in the opposite direction. the most seem so the first used was the prime factorization uh uh so the prime number factorization which it's very easy to multiply two prime number but if I give you a very large number it's very hard to uh you know understand which was the original prime number for create so the larger one well this is very common you know um way to encrypt and that is is called like or those technology then so then there are only two more different uh hard asymmetrical problem that we that we can use.

The second one is the oh okay sorry okay okay okay so then there are three main mathematical symmetrical problems that yeah it's okay good so then from from mathematical perspective and also this true also for the quantum computer independently which is the name or of the so the practical algorithm that we want to use it's very important to understand which is the mathematical problem behind find the the the the encryption method that we are using and typically today we have just three main asymmetrical hard asymmetrical mathematical problems. The first one is the factorization problem the prime factorization problem. The second one is the litical curve. It's called also like integer uh uh logarithm. And the third one which is the latest generation of the of the of the of the mathematical imaging for encrypted the the information is the latis problems.

Well, the first two problems from the quantum computer are extremely easy because we already have an anor problem rather than the grower that can you grow is a mathematical uh algorithm that can be placed on the quantum computer that divide by two the size of the key. Imagine that you have a size of 256 using Gary in any kind of problems we can divide by two this number. So finally all sides of the key in the render which is the mathematical problem associated with it using grower we can divide by two those sides so the sides of the key this is a very important advantage but it's not enough alone well the first two problems that I describe uh litical curves and uh the prime factorization can be solved we on the quantum computer using what is called the um the the quantum um fian transform. So if we have and in some cases we have not completely but if you have in some cases the fing quantum transform the fian quant transform can be used to solve the first tube. Well which remain remain the only that so the one so the latis problem that is the one that n is using that released recently for for for the encryption and for uh uh identification problems uh that cannot be solved with uh the standard methods that we have at the quantum computer.

So for the moment they are still safe but using the approach that I described before the surface of the moon the emiltonian uh approach of the problem also this kind of um postquantum algorithms the one that is by mist are under are possible to be attacked by the one computer. So finally which is the so today we don't have the definitive solution unless we change totally the paradigm of the encryption methods that there are something on the table that we can eventually describe but for the moment doesn't exist in asymmetric encryption method that can be theoretically robust against all quantum computers technology. So it's an overall like

evolving process that as we discover and technology uh improves as well also we will find new problems and we will need to seek for new solutions and it's like a constant cycle basically.

Yeah. and and and and it's strange because the problem is not the hardware even if the hardware is growing we are in in improving the number of the cubits and so on but the main problem is into the math and we are having a very strong and important advancement in in knowledge in math especially in this field that was totally out of the standard mathematical field

okay before thank you very interesting and maybe a little bit uh deep in the technicalities as well uh since you're in Italy I would like to bring the conversation to to our country. So starting from the RWA space, what kind of use cases do you see in in Italy specifically? Uh and what kind of activation has been happening in the space?

Yeah, I know that in Italy there something is moving. Uh I can guarantee that other countries are moving faster uh as usually happens unfortunately. But uh I want to be positive on that since I know that some uh uh people are make just talking with uh the governments uh trying to uh simply make them understand because most of of the cases the problem is that there is a a very little understand of uh what is happening in the the blockchain space which is a a word that for many people is uh still unknown uh for for what is my experience Uh for sure there are here even here many people that are working hard to make this happen. Uh and not saying in this in the room but I I saw them around uh and uh hopefully we'll uh something will will be moving. Uh as of today uh I'm not sure that uh for example we are capable as a company to tokenize gold for example.

I'm not sure that could be possible in Italy. I know that there there are common problems that are not only related to the Italian uh legislation, but uh for example in real estate uh tokenizing uh an apartment or a building is something that is still a work in progress from uh uh certain certain mothers of multi-proprietary uh resolution. So we need we need to wait a little bit for uh the the law to be adapted to this world that is uh growing very very fast and uh hopefully also Italy will be make this move. Uh because for example I know that the the Statu Stock Exchange is starting tokenizing uh bond uh corporate bond. So it's something that I hope that will happen also in uh in Italy very soon.

Thank you. And if we move on the quantum side instead, uh what are your thoughts on this Q day? He said 2032. Uh how do you see the road towards Qday?

Well, there are someone that talking about five years someone

Yeah. And uh and uh but well there is a part of the of the of the world that we don't know what they are doing. for example the China because China stopped to share the so the latest so research that they doing quantum computer so find accordion what the the most important um quantum company are doing in let's say Europe and US five six years 10 years so of course there are many you know so this timing it's very debate this is my person this so that's my guess it's my personal opinion of course I can wrong but that's more or less the number that the people are talking out

and maybe more of a challenge question and more like comes for a curiosity as well. Um do you think that hackers would access quantum computers way earlier than the actual companies who's going to protect us from uh

this cyber like quantum attacks like cyber attacks via quantum

this is a very important point for the simple reason that today only for example the Canada uh allowed to move uh quantum technology outside the so so the border um of course US and um and um UK and and of course China they're not allowed to move those technology outside of of the border. Finally, we have a very tiny window as a Europe and Italy to have a quantum technology uh available for the future or other ways we will be so will let's say we will feel the the so the effect of the what they so the other will so we'll do and on the on the protection side because so so this is in into the attacking side you know so create something that can attack but into the protection side we already have the tools that we can use for do this for example uh one one of the technology that uh we are developing in many scenarios uh using approach that is called a shenon approach. Shannon is a mathematician that describe the way to have a pure and perfect encrypted communication between two points and uh if the communication match uh two main requirements the sides of the key must be the same length of the sides of the message which absolutely out of them. So we use the very short keys and uh and uh and um and the key is pure random number. So based on the quantum computer always a perfectly random number and so there's another requirement is more sophisticated but it's not very important.

Oh so it's important but it's not like the the so the first two the that the message must have a pulsive autooration. It's a mathematical problem but if we match these three requirements the communication is perfect. optimist that even if you have the perfect quantum computer with the infinite sides, infinite uh computational power would be possible to bridge it. That's the key for the future to create the uh currencies and uh and decryption communication.

Well, at least it's good to know that we know where are we uh driving towards and what would be like the perfect scenario. So, we know the steps. We just need to

Yeah.

do those steps basically. You want to add something? I I want to make a a question because we talked before about what Italy can do for DAWA but

for quantum

yeah I I I'm on the Italian table that is uh define the quantum strategy for Italy government and that will be released I think two weeks ago one week ago and u then then it is available on the on on the website and simultaneously also the European um uh EU released the the EU quantum strategy into this strategies included also the protocols that you have to to develop in order to to have a you know well protection against the one computer. It's not a perfect because you know it's things that must be done step by step but at least the first step is a very good step that I strongly believe that we have to follow it.

Okay, good. Well, it's good to see that at least there are some steps also from the EU side and in the in the research side. Uh I think we have some room for a couple of questions if any. No, perfect. Well, we were super clear.

You were super clear then. Thank you very much. Uh, and hope you enjoy the rest of the panels. Thank you very much.

Thank you very much.