Stacy Schneider ~ Enterprise Blockchains Panel

[Music] we're gonna be talking having a little discussion about enterprise blockchain my name is Stacie I'll be your moderator and I'm gonna go start off with a question and you can introduce yourselves my panel here is from all over the world has different levels of visibility into enterprise adoption which is sort of the big mystery and sort of where we're heading we want to have a mainstream adoption so my first question is why are you passionate about blockchain personal introduce yourself and say why are you passionate about blockchain and what excites you about this space hi I'm Kelly Lavallee hunt I a little bit about myself I started being very interested in cryptocurrency in 2014 and eventually by 2016 I left the data center world I was designing across Europe Europe Middle East and Africa probably 40 projects designing data centers for the enterprise and I decided to jump ship and invest in a blockchain company called black ops and in 2017 there were 17 blockchain companies in the world and I started working with one of them that I thought was I think is one of the best it was the first blockchain company to incubate out of consensus it's run by Karen James Lubin Joe Lubin's son and they actually we actually started targeting the enterprise organizations to run block teams internally and then eventually externally and across institutions and then on the public aetherium network so that's kind of a little bit about me and I'm very passionate about blockchain cuz I think I'm positive that it's changing the way we interact with one another and engage with one another and how we grow from a purely financial value system to a everyone adds value and everyone has value hey guys Kyle Thomas and the founder of provide it's a platform that allows allows organizations to very easily spin up blockchain networks and applications I'm a self-taught Software Architect some cyber security experience kind of kind of a lot of different perspectives I did quite a bit of consulting for enterprise companies so but I'm also kind of a start-up fiend I've been doing startups for like 12 years straight I don't see myself getting out of that that space anytime soon I'm excited about blockchain because it just represents such a fundamental paradigm shift you know in the economy and also you can really you can push value to the edges and really improve people's lives of blockchain which is kind of in the long run a really exciting thing to be a part of my name is dan o Ferran I am a blockchain protocol engineer at Pegasus and I started my career out as a desktop Java developer so in 2014 coinbase had a blockchain applications contest and I thought I would be cool to graph Bitcoin transactions in a Java desktop java application there are some tools I really wanted to use and it was a good motivation to get me to do it and then I read satoshis white paper and I fell down the the blockchain rabbit hole really deep I thought I could pull myself out I went and worked at Google for two and a half three years they have lots of really entertaining toys on the inside of Google but I could just never get blockchains out of my mind so I finally I jumped ship and I'm now working full-time in a cryptocurrency company making an aetherium client so that's you know there's some things you just can't shake hi I'm Sarah feenin I'm product strategist at company called chromatics the company's been around 2015 so quite a long time in terms of enterprise blockchain space myself I have around 12 years experience in financial services the traditional kind working in small companies and large ones - so I do kind of understand the struggle of enterprises to adopt things sometimes I think what makes me really passionate about blockchain is having started to understand Bitcoin a few years ago it was really that incentivization to miners provided to help propagate the network so it's really collapsing a business model into the technological implementation which was something that was really new so I think that's you know a theorem obviously has evolved from there and it's it's great to see enterprises starting to adopt it - although it might be a bit more invisible cool well sorry we could start with you for the next one the perception is that the enterprise is not really adopted blockchain we know that's different but do you think that's true and where do you see the adoption starting off or grabbing hold right now so we have a project called utility settlement coin which is a consortium of 17 banks and the what we're actually trying to do is tokenize an cash asset which is backed one to one at Central Bank money so we all also have relationships with central banks as well it's not one that's got a great deal of hype around it certainly not in the public space and events like this but it is it has grown over three years quite considerably there are obviously problems that that come along with working with banks to try and effectively disrupt the way they transfer value which might not be as difficult in other different types of industries but there is adoption for sure it's just perhaps not as widely publicized I'd say maybe elsewhere the answer I mean I think it's it's just interesting like the SEC is trying to regulate blockchain with blockchain you know you see insurance companies that are rolling out sweeping consortiums across you know industry-wide consortiums there is adoption in in blockchain in an enterprise blockchain it is just kind of on the on the DL right now yeah I agree just because it's not in the mass media or in the blockchain media it doesn't mean that doesn't mean that it's not being built and I've witnessed several blockchain applications across the enterprise being built over the past two years and we're doing amazing things in the etherium ecosystem so don't let media play it down because the people that are not listening to the media are making headways in the space there's agriculture companies that are adopting it across the enterprise there are institutions like the United Nations that are adopting it across their ecosystem there's several other ticketing company that was just bought by Ticketmaster so they're there's a lot there's many being built it's just there it's a it's a very competitive market and nobody wants to deploy an enterprise blockchain solution and then six months later or a year and a half later have to announce that it failed and that's what we saw kind of happening in 2017 so now everybody's kind of hush-hush about it but is it is it is it is a huge market market space and I'm surprised that we don't have more people in this room wanting to learn about the enterprise a blockchain right I would have thought this room would have been standing room only because I hope that the developers are understanding that it is happening and and we are building the etherium ecosystem especially so what do you think collectively as developers this is mostly people here are all developers what can we do in order to improve the adoption in the enterprise so one of the things I think that the developers can really do is to make make the integration with the other system seamless the the analogy I think of is sometimes some of these technologies need to look like a magic trick you can explain it in detail you can show it happens from point A to point B but you want to have your executives at the end of the day to want to sit back and enjoy the trick being played out and just you know accept the magic they everything can be explained but the less they have to concern themselves with it the more excited they get about it I think it's it's a medicine the magic trick is important it seems so it's so important that you all you almost have to trick the users to use it right if like blockchain will reach ubiquity when no one really knows it's being used but you know behind the scenes and so there's two tricks you know yeah like you can't use it for just the sake of using it it's like you have to actually solve a problem right yeah I look at it as the yin and the yang there has to be some type of pressure to to release the pressure to build up like the Hurricanes need to come before you rebuild so there it has to you know if you know about Talib's book the anti fragile you have to have the the balance there of what is the problem and then what is the solution and and I everybody always asked me you know when will we see mass adoption well for blockchain you're not going to see it that's when everybody's going to be using it so I don't see it as a trickery but I do see it as we don't need to understand cryptography to put our credit cards into a website for example that's the way the way we're gonna see blockchain mass adoption so I think for us it's I would say it's more about multidisciplinary teams which is potentially some somewhere where Enterprise can learn from the developers as well but I think from a developer's perspective it's really about trying to explain what you know maybe how a system works isn't the best way to explain what the benefits of it are so it's really about cross-pollination of ideas being able to explain something in someone else's language being able to go into more detail when they ask but you know for enterprises and specially c-suite if you're trying to sell in a technology that ultimately they don't need to know how it works being able to kind of give the top-level explanation rather than explaining the the protocol from the bottom up so the open nature of public blockchains is a huge appeal but it's also a double-edged sword regards to privacy what kinds of trade-offs you see enterprises making here specifically around open access and privacy yeah you have the mic yeah so yeah trade-offs between open access and privacy it's quite difficult one so I think enterprises generally the data exists in silos potentially it's shared the open access and public blockchains is is something new the data being kind of out in the open is quite new to to enterprise but I think that the the trade-off that they don't necessarily understand and we've we've worked quite hard to explain is that that the public and openness actually comes with real really large security benefits that you don't necessarily get when you have one centralized system which is effectively a single point of failure yeah I think some of the trade-offs that they're also going to deal with is how to piecemeal out some of these transitions it's a couple of techniques that are being used in enterprise law change today to preserve some of the privacy yet preserve the audit ability there's the notion of private transactions such as quorum and Orion where they have a separate constellation where they only share the transaction between the interested parties and still commit hache to the main chain that everyone can validate in another interesting technology is zero knowledge proof so you can you know it's the one level you can see that two people traded two units of some commodity well not even you it's a component because some people engaged in a trade but you might not know who the parties are you might not know who on how much was traded in what direction but with the power of zero knowledge proof so you get some certainty that rules about three-column accounting are still in place that they didn't create more of it that it didn't go to the you know enforce any of the other rules that they have in this system but at the same time they need to have a hash on the blockchain to assert the deck that could be done so that's you know there's there's baby steps they can take to full openness without having to completely commit to it just graduated effort yeah I kind of agree with that like check winning as you go unlike smaller consortium chains against the main the main chain it really lets you leverage you know the power and security and scale the public blockchain in in in the enterprise context it's kind of more incrementally yeah I agree with everyone but also I think that I'm just gonna tie you up here I think you when we come to the internet we had intranet and then Internet and still we have in the corporate world in the enterprise world we have intranet and Internet and web sites and things like that and I think that we'll have private blockchains and I think about public blockchains and depending on what we're transacting then we will choose which one we would like to operate on and I think there are some things that you can not everything has to be on in a blockchain and not everything has to be in a database so you have to understand what you need to do with that information and who needs to have visibility of it whether it's a green field or a brown field data it really depends on what your organization does and who you want to interact with and the data that you want to share and giving visibility so it really depends on the organization from an enterprise perspective in my opinion okay so with security and Trust at the heart of blockchain it also has the potential to reduce risk so not just saving costs but actually avoiding some cost that could not be planned for ever what are the biggest kinds of risk avoidance that blockchain can offer for you know making the sell making the case to justify a blockchain project within the enterprise well I think one one near-term example is compliance with GD P R and C CPA creating a system that is highly audible and trusted by courts it seems it seems like one good risk mitigation strategy especially with the public blockchain in the enterprise yeah along the lines of that one of the important things that blockchain can enable if you an embed a completely new transaction process to where every transaction has to have its transaction on the blockchain you can then present proof of absence so for example if you have an email system in your subpoena giving all your emails that match this criteria in this time you can you can do a search and you can prove that if there was an email that matched that in the blockchain that it would be there and the fact that it isn't there is in and of itself with this data structure a proof of absence and in traditional systems where you got papers and files before or even network drives it's really hard to prove that someone didn't just come in and remove the incriminating evidence with block chains you can prove the incriminating evidence was never there because a crime wasn't committed I'm gonna take a slightly different track to answer that question in terms of risk so as I mentioned before we have lots of financial institutions involved and we're looking at what's kind of formally known as financial market infrastructure so the existing central banks central counterparties that exist in trading and transfer of value in the current state so there's such thing as systemic risk and I'm gonna use one kind of organizations give an example about this they're called central counterparties so for quite a lot of securities that are traded that the trade has to be given up to this central counterparty which means if you and I trade together we both give up the trade to this central counterparty who then has a trade against me and a trade against you so you and I have net net zero risk but actually all the risk is centralized in this central counterparty now a lot of that is actually mandated by regulation and at the same time a lot of the existing players in financial market infrastructure and and the you know participants in that ecosystem are very acutely aware of what would happen if one of these central counterparties were to default in other words they don't have enough money or there hasn't been enough collateral that's been placed and there's a there's a huge financial crisis again like there was in 2008 and it's actually quite hard to quantify what effect that would have either you know monetarily or in terms of the contagion on the rest of society but everyone knows that it does represent a huge systemic risk so I think that part of our perspective is that blockchains can really help with something like this because you can actually you can create a topology of this existing environment that has true peer-to-peer interactions and you can use smart contracts to escrow collateral you know all of the same functionality that we're hearing around here over the last couple of days but in existing financial market infrastructure and I think that something like that would be able to actually contain that the propagation of risk of something like a huge default of one of these qualities I'm not gonna say much but the quality if you guys google the quality and and read about Lacroix leti it talks a lot about how you can mitigate risk in your enterprise or your blockchain solution or your startup the quality so what proofs of concept have you guys seen that will surprise us when they become commercially available what are the enterprises have cooking up that we would be surprised to see unveiled that they're that far advanced already ticketing I mentioned already the airline industry reconciliation the largest agriculture company in the world tracking of seeds and the supply chain of money on the blockchain your that was very that was very short I don't know but does everybody understand all those like what's happening with the airlines yeah the ticketing reconciliation trades and also a tokenization instead of reward points you're going to see a token created to redeem for ether dollars or whatever you want to trade it for but instead of having reward points you have to have like or membership reward points for the airline industry you're gonna see actual tokens to be in exchange and that will probably be in 2020 for example I'm most excited about about payments and how the right payments solution the right mechanics of the right payment solution could help stabilize cryptocurrency can help stabilize the price of ether and Bitcoin and it could be done kind of insidiously you know so that's to me that's what's most exciting is is the payment space still is ripe for disruption and I think when we see public blockchain like Bitcoin and ether and some of these other more mainstream Kryptos become you know more stable through higher velocity and volume you will see a lot more public blockchain applications that that touch the enterprise in meaningful ways so there has already been proof of concepts that have been done in supply chain but I think the one that's gonna surprise most people is when we start to see it popping up at our insurance whether it's home insurance or whether it's auto insurance or the smaller places like that not to all my own project but I would say that the we don't have very much hype around the utility settlement coin but it is certainly the closest thing by a country mile to central bank digital currency it's actually only sort of one step away when it goes live and I think that that the effect that that will have on the financial services industry and to be able to integrate blockchain technology into payments for example will be massive any kind of payments underlines anything that any other business does so any other industry has to have transfer value involved in it has to have payments so this is really kind of foundational I think to to enterprise cases so I mean we keep hitting on payments as a theme here go a little off script but if payments and you know for theory amore cryptocurrency users are so great why am I still using PayPal like what's holding up the payments industry to actually be effective right now because it sounds like the lighthouse example for everybody but it's got very small adoption in reality right I think its scalability that's holding it back I mean these are desk 120 thousand transactions per second and not many blockchain systems can handle that certainly not any of the fully public ones so the adoption we're gonna see in the blockchain I don't think is gonna see necessarily with publicly traded tokens but with privately managed infrastructure to provide providence and security for the payments that are gonna happen also usability PayPal super easy what do you mean by usability it's just really easy to use PayPal it comes with its trade-offs right it's centralized and you can log in with Facebook can you log in don't think you can actually it's just easy to use - you know PayPal versus Kryptos I think the differences is that PayPal was it began 20 years ago and bitcoin is 10 years old so a mass population utilizing cryptocurrency has really only started five years ago and it's not even at mass so I think what this ecosystem needs is time and I think that's fundamentally what we need this is the same thing at the in the early 2000s we just needed time the Internet the age of the Internet we needed time and if we apply time to our ecosystem and we give ourself the the time to evolve and grow as the garden of aetherium then and you guys can visit my garden up on the top floor I'm gonna plug my garden that I've been growing for the past 42 seconds show I do other things too I'm not just a gardener but the the garden of aetherium is really talking about the ecosystem and and you know the Amazon rainforest wasn't it didn't the seed didn't grow overnight so if we think about it that way and we apply time to the cryptocurrency world and I think that in ten years we'll be there will will be where pay powers and I think to both of your points actually in terms of scalability and time with the ecosystem I think what it's very important is to work out what use cases are accessible and something we can implement that potentially doesn't have the same number of transactions as visa but we it gives us time to actually grow into scalability whilst using something that has potentially you know lower volume transactions or higher value transactions or something but kind of gradually growing out from the central use cases Marino potentially ones aren't quite so highly regulated for example but can move quicker but it really is about as a community as a ecosystem working at what use cases you need first and building to those requirements and then giving you the time giving us the time and space really to continue on that R&D track to get those requirements built so I just want a shill again I'm Austin Griffin's Buffett I system here on the food trucks we're live in the future this is the sort of thing that's it's gonna get payments involved in block teams like this this is more what its gonna look like than whipping out your your treasurer to pay Starbucks for a coffee that was a popular answer oh yeah I mean I think it definitely matters that we've got to make it useful for walking around and right now it's very difficult and lower the learning curve in order to be able to have that happen it's like it's got to pass my dad's test right so what advice do you guys have for enterprises looking to make their first investments in blockchain what could you tell them to help make sure that they gain confidence and they don't get disillusioned in like I'll just come back next year next quarter or whenever so you know this is true whenever any enterprises adopting any new technology you got to consider the community you're getting into so when you pick a blockchain ecosystem a specific blockchain consider the value that the community can provide back to you if you get stuck on a problem can you go out and ask them if you build your own there might not be anybody who can help you or the people who have already encountered the problems might not know that you're running into it because you're running in your own private system so consider the community think about what what you're joining into what you can give to them and what they're gonna get back to you as you as you embark on a new project can you expand on that and say which communities you recommend so I'm sure cerium is gonna be one right yeah there's a reason an aetherium conference instead of you know some of the other conferences you know I come from the Java world and I saw what a vibrant ecosystem with people willing to build random stuff because it's fun and that's the sort of thing that I see here yeah definitely definitely community but also tooling like enterprise engineers don't have time to learn blockchain and so that's a big problem so but if you you know they just have to build they have to build what they have to build for their companies every day you know they don't have time to learn all this complicated stuff that goes into building bought for blockchain if you pick the right tools that make it easier for them and you pick the right use case that actually helps the business you know magic magic can happen you know like Tullio think of - Leo - Leo gave developers the like SMS for their applications and I think there's a breed a new breed of tools that is meant to give blockchain to developers in the enterprise that was a passive-aggressive shill yeah I believe I agree a lot of the engineers that I come into contact with they don't have time to learn how to code JavaScript because they're from a C or a C++ background they don't really have the time to learn solidity etc and I think that's a big challenge for when the c-level teams come to the innovation teams and say okay I don't care what it is you build I won't need you to build a blockchain and then these then they they pull from a handful of developers that are eager to learn and those developers start to develop something but in reality they are told to develop something but in in the real world in the startup world this is the startup inside of a corporate world and in the real world and in the startup world they're passionate you know the independent developers of the startup world they're very passionate so your code when you're looking at the code from the developers in the corporate world it's very different the mindset of the developer is very different than the mindset of the startup and the passionate developer and it's very very there's a lot of bugs there's a lot of miscommunication and there's the solution architecture isn't the way it should be so my advice is to find a sector expert if you were told to build something within your organization find a sector expert and and really dive deep into their world and try to figure out so then you start thinking like them when you're coding this beautiful piece of blockchain that the c-level told somebody on the innovation team or strategy team to build yeah I agree with everything everything that's been said I think give enterprises the same advice that I'd give developers is talk to one another the cross-pollination of ideas multidisciplinary teams making sure that you're using the right tool for the right use case all of that kind of feeds into a successful development of POC or and hopefully beyond I agree okay just have one last question a lot of enterprise development is actually happening in private chains or in consortiums have you seen any rate on ramps between those private and and consortiums to the public chains have you seen any interactive or interoperability between projects a Manor price yeah I still again I mean you're the last one so you might as well um I shield Buffett i but that was you in the conference um so one of the things to keep private and public change is to make sure they're working on the same technology a Pegasus we're building an enterprise chain that is always gonna be main that compatible so you can build your application that runs on the Constantinople fix whatever the instable changes are gonna be you can keep those current in your in your chain and on our client is built with the intents of keeping that together all the time so that's one way is to make sure that you're using the same tools it's when you have to switch tools that the friction starts happening and that's when things start to solidify into well this is just the way we do it and that's why we've always done it I'm gonna shill again sorry we've released an open-source framework called ion about cross-platform interoperability so obviously aetherium to a theorems fairly fairly black-and-white fairly cut and dry and we actually did a proof-of-concept with fabric as well which was a lot more difficult it also has given us a loss of knowledge and understanding about what the different properties of those different platforms are and it's really made to made us to start to think about what use cases they're appropriate for but I think interoperability is something that is incredibly important I know it's a bit of a buzzword but obviously you interoperability with the main nets and interoperability with other platforms is important too and I think that's something that will really help propagate blockchains generally I think part of the interoperability problem isn't just between block chains it's with existing enterprise software also existing like architectures are not very pluggable or compatible with you know with blockchain architecture it's a fundamentally different paradigm again tooling though you know can make can really accelerate adoption make things easy for enterprise developers and make enterprise blockchain possible okay well with that I think we're actually out of time so I'd like to thank all of you guys for your time and thanks for having us so anybody have any questions yeah baby we have one more question so who the who of the stakeholders who are you selling to go convince enterprises to do blockchain I usually advise companies to target the strategy and innovation teams those are the ones that are looking to build something and I also recommend that you have a business model that you sell not that you give away because once you give something away to an enterprise or corporate they'll keep asking for it and you can never bring back your value so my recommendation is to start high in the organization the c-level and innovation strategy teams and start high with your price and let them beat you down I hate to put it that way but that's what's gonna happen warning all right we're gonna wrap it up thank you very much for your time