Beyond Tokenization: Unleashing the True Power of Blockchain | ETHDenver 2020

hi everyone so what I'm gonna be talking to you about is the significance of something called the Oracle problem and specifically how it relates to the capacity that our space has to build useful things and to evolve beyond tokenization into a space that's defined by something more useful than tokens tokens are very useful but the reality is that people building things should have the capacity to build things other than tokenization of assets and and other than ownership they should be able to make smart contracts something that replaces all other forms of digital agreement now the core of this problem is that traditionally block chains have a problem the Oracle problem where they're not able to speak with external data sources what this means is that you can't build events into a smart contract so events are things like market price changes the location of goods weather data for insurance the reason our space is so heavily focused in and defined really by tokens is because that's what you can build today if you can go beyond building tokens then the space can become entirely redefined because if you look at the digital agreements out in the world they're not about the majority of them aren't about ownership the majority of them are about other more useful economic activity so as I said our space is basically defined by tokens and though tokens are very good this is a limitation that events like this can help overcome personally I think what's going to happen is is very clear you're gonna see a shift from I'm generating tokens I'm generating more tokens I'm generating more tokens year after year to I'm building decentralized financial products and those decentralized financial products begin to redefine how financial products should work and and defy is really the beginning of this trend towards using blockchain infrastructure not just for tokens but for digital contracts that do something other than ownership and transfer of ownership right now why why am I so hello why am I so confident about this idea well the reality is I've seen this happen this shift in how our space is defined two times already the first shift was from something called Bitcoin multi signature as the only smart contract to something called fat protocols where you had to write a smart contract as part of the protocol itself this resulted in months to sometimes over a year of develop in time to make one single smart contract even when related to tokenization or decentralized exchange of those tokens then etherium the the organization and the movement and the piece of software that you know over 2000 developers showed up to work on and that was able to to generate enough interest to fill this whole buildings building with smart people that generated another shift and that shift was from you know protocol based smart contracts that took months or years to make to scriptable smart contracts and that shift is very significant because it basically underpins pretty much 90 plus percent of the value creation in our industry that that isn't Bitcoin that isn't just I own Bitcoin so this shift in what people could do with blockchain infrastructure went on to redefine our industry to something that focuses on tokenization and uniquely provides that value right so that that shift was very significant and I you know I went through both of these shifts the third shift that we're starting to see now is from one where you can simply make scriptable smart contracts that are related to tokenization because that is the type of data that block chains are very good for processing natively into an environment where data and events allow the creation of decentralized finance smart contract insurance decentralized trade finance various fraud proof gaming so all the other forms of digital agreement that exist out in the world can all have the trust trustless computational benefits and and transparency of this infrastructure the only thing that's really necessary is the capacity for for blockchain infrastructure to be used around events data to consume events data to generate events data because the reality is that the majority of contracts out in the world are about events they're not about they're not about ownership transfer now what I'm here to do is is to you know partly from a selfish point of view but partly from a point of view of redefining our industry encourage you to build something that is not a token take this as a challenge to build something that is a decentralized financial product a piece of insurance some kind of digital agreement that is about an event that creates sufficient economic value and benefits from the trust minimizing capabilities of blockchain infrastructure right this is what our body of work is about this is what we seek to help developers do we seek to make all of these inputs and outputs accessible to you as developers and our sincere hope is that many long nights that we've spent on making this and bringing this to you is something that will be used to create an entirely new crop of next generation smart contracts that are not about generating a token and transferring it but are about providing people crop insurance or making a decentralized financial infrastructure that eliminates you know systemic financial risk or provides all kinds of financial products to emerging markets or the 50 other great value creating things that can come to define our space other than I generated a token by the way generated a token is cool and that's a great mechanism for enabling a lot of the things I'm talking about in these contracts but it is not the only thing that our space is or should be about now just a bit bring this into into clearer perspective I think some some examples would be helpful so one of the first examples is what is what do we mean by truly decentralized finance right it's decentralized finance which means that the end-to-end relationship between the financial product and everything that it needs to rely on is decentralized that reliance in the case of decentralized financial products like money markets lending markets derivatives basically means that you need to rely on data and that if you're going to call it a decentralized financial product or a truly decentralized financial product you should seek to provide the guarantees that define a decentralized financial product so this is one challenge that you could engage in at this hackathon you could seek to build a new type of truly decentralized financial product that implements the centralization not just in words but in practice both at the core computational level with something like etherium and at the data level with something like chain link and the data providers we give access to likewise if you want to go a level further you can build a truly decentralized financial product that is actually usable because people actually want to receive payment from it because it can send them payment in the format they want to receive this is this is another challenge that I think developers should take on in this space they are taking it on I'm seeing more and more high quality teams from traditional industries come in and build these types of products but if you're here at a hackathon and you're gonna spend two days on building something anyway why not build something really really cool that's truly decentralized and can actually pay people in a useful way I mean that's just cool I mean that's exciting I'm excited this exciting and this excites me this this it does this is more exciting than I made a token I sent the token I mean it is I mean why not give it a shot I would the good news is that this has become a lot easier we've made this a lot easier there's a lot of people in our community in our core team that have spent hours and hours long nights making huge amounts of jada data available to you on chain so that you can build something useful so whereas before you could write the solidity code and you had to write the integration and you had to have to do a lot of work to get the Oracle mechanism working now you write the solidity code in a minute two minutes half an hour you have access to all the data you need so this is a significant change in what blockchain infrastructure can provide to you as a developer it's a change that if you take advantage of it you can quickly build something much better than people that do not know about this capability and so therefore you could just build something cool quicker build something cool or quicker that's I mean that's I think that's what progress is really about here's an example of a price reference data intranet network related to gold price so you can mailed a decentralized financial product that's truly decentralized around the extremely lucrative long maybe longest-running market in the world the gold market you could do that today in in probably in in a number of hours solidity development tools have have reached a you know a very high level of quality and now you have great data so if before there was something stopping you from building a decentralized financial product that did something useful I think the reality is the people that realize that that limitation is gone or going away will build the products that do the dphi things that come to revolutionize the space and and really you know the sooner you build it like that really could be you that builds that decentralized financial product there's there's no reason it can't just like the people who built the first solidity tokens we're successful another example is insurance markets you can get insurance data from something like Noah from one node or from multiple nodes and once again paid correctly to the right markets and once again we provide an infrastructure where you could get all this weather insurance data generate all these payments in something that takes hours instead of days or weeks so this is this is once again again a significant improvement another thing that I'm extremely excited to that we were basically announcing today and making avail two people here is our partnership with the great people that off chain flaps a truly gifted team of extremely talented people that have made something called our Bertram our Bertram basically allows your contracts to reach entirely new heights of scalability and cost efficiency so if before you could not you could not cover the costs of running a certain type of contract on chain or if aetherium didn't have the scalability characteristics of a gaming contract the decentralized financial contract an insurance contract now with the help of something like arbitral and and chain links ability to provide our Bertram to you in in a decentralized node network of validators you can submit solidity code computed an extremely efficient way on a highly reliable set of validators return that computation back to something called the our Bertram contract and you know for for basically an arbitration period and then after that arbitration period that auction computation that was extremely scalable extremely cost-efficient is something is something that is almost a stress minimized as aetherium itself so I think the thing I'm really here to tell you is that the limitations that were in this space even a year ago about making decentralized financial products making events driven contracts making scaleable smart contract code a lot of these limitations are falling away and I I think the people that take advantage of this new environment that allows them to build new truly useful things will be the people that that come to build the the use cases which redefine our industry and I think you are those people I I am I am the person that works pretty much almost all the time to bring these capabilities to you and you are the extremely talented people who are going to take those capabilities and I personally believe are going to redefine the space once again by building the use cases which which truly truly come to to take us from blockchains are about those token things to blockchains are the dominant form of digital agreement that powers the global financial industry the global trade finance industry the global assurance industry in a way that trickles down and benefits the average person in ways that I unfortunately do not have enough time to explain because I have been way over time for way too long one last shameless kind of shameless plug here if this sounds right to you and you're really smart and you like remote and you're like good ideas to win in conversations about what should actually happen with the company you should really come talk to us if you meet those criteria we're hiring really good people everybody likes working with us it's a lot of fun it's great you you really if this sounds right to you you should talk to us we have a lot of open roles it's really fun thank you very much [Music] you