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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: And I'm Tracy alliwit So, Tracy, you know one way

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Speaker 1: that this year, actually this month in particular, is very

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Speaker 1: different than this same month last year. Wait, it's the

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Speaker 1: month of November. So November versus October. No, no, no no, no,

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Speaker 1: November versus November. I know it has to be bitcoin, surely, right,

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Speaker 1: everyone was obsessed with bitcoin late last year. Yeah, November

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Speaker 1: last year was when I think this sort of like

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Speaker 1: mania that was already at place for several months really

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Speaker 1: turned into an incredible just absolute euphoria, particular early around

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Speaker 1: Thanksgiving time. But at this time last year already I

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Speaker 1: think basically all anyone was talking about was bitcoined and

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Speaker 1: other cryptocurrencies, right, And I think we reached the record

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Speaker 1: for bitcoin eighteen thousand dollars or something was that in December? Yes,

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Speaker 1: I think middle of December. Now know one cares, right,

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Speaker 1: pretty much, nobody cares. Nothing is happening. It appears the

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Speaker 1: prices don't swing around like they used to. All the

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Speaker 1: speculators have probably moved on to marijuana stocks. And it's

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Speaker 1: just it couldn't feel more different. The overall environment surrounding

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Speaker 1: cryptocurrencies and all that than it did exactly a year ago, right,

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Speaker 1: And I don't know how many of our listeners ever

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Speaker 1: went to industry conferences where people would talk about bitcoin. Um.

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Speaker 1: But the trope, the cliche that you always heard there

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Speaker 1: was oh, I don't believe in bitcoin, but I do

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Speaker 1: believe in the underlying technology blockchain. Yes, people are still

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Speaker 1: saying that. Yes, people still say that, and they might

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Speaker 1: even be more confident in their assertions today because of

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Speaker 1: the sort of diminished cryptocurrency bubble and like, oh there's

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Speaker 1: still something here. We're sure of it. We don't really

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Speaker 1: know exactly how it's gonna work it, but we know

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Speaker 1: that the underlying technology is going to have all these

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Speaker 1: great applications like tracking shipping or tracking tomatoes or verifying

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Speaker 1: the provenance of pharmaceuticals or diamonds. And so people continue

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Speaker 1: to search for that problem that the technology could theoretically

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Speaker 1: be helpful in addressing. Yeah, my favorite project that I

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Speaker 1: heard most recently was Walmart putting Lettuce on the blockchain

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Speaker 1: in order to track like quality control exactly. But the

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Speaker 1: question is, do you really need a blockchain to track lettuce?

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Speaker 1: And I've always been kind of skeptical that, or track

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Speaker 1: tomatoes or ships or anything like that, or is this

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Speaker 1: really just a great buzzword where if you're sort of

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Speaker 1: like a senior level executive somewhere and you mentioned conferences

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Speaker 1: and you want to be at a conference and you

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Speaker 1: want to sound smart on a panel, you want to

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Speaker 1: have something going uh to say, oh, yes, of course,

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Speaker 1: we're actively working to incorporate blockchain. This is a pretty

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Speaker 1: open debate because first, much talk about all the people

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Speaker 1: saying blockchain not bitcoin, there doesn't seem to be many

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Speaker 1: actual practical examples yet in the field where someone is

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Speaker 1: clearly demonstrating the value of the technology now, and a

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Speaker 1: lot of the projects that we did hear about have

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Speaker 1: been quietly shelved or at least there hasn't been a

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Speaker 1: lot of tangible progress on them, or progress that we

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Speaker 1: are able to see exactly right. So then the question

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Speaker 1: is why haven't we seen more progress and why haven't

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Speaker 1: we uh seen some sort of tangible uh connection between

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Speaker 1: what people talk about a conferences to how businesses actually operate.

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Speaker 1: And today's guest will hopefully shed some light on this

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Speaker 1: question on the Odd Lots podcast this week, we have

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Speaker 1: angers championed Krepni. He used to be a blockchain leader

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Speaker 1: at e Y and help companies learn about blockchain technology.

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Speaker 1: Now he is off doing independent stuff in the crypto world,

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Speaker 1: and he has a lot of thoughts on blockchain and

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Speaker 1: how it might or might not be of benefit two companies,

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Speaker 1: and so he has experience and looking forward to getting

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Speaker 1: his perspective Angus, thank you very much for joining us.

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Speaker 1: Thank you very much for having me. So how many

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Speaker 1: conferences have you been at where someone said blockchain is

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Speaker 1: the interesting thing, not bitcoin? I I could not possibly count.

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Speaker 1: And the it's funny when you mentioned November last year,

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Speaker 1: there was a glorious two week period where what I

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Speaker 1: did was cool. Prior to that, no one had any

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Speaker 1: idea what bitcoin was. After that, people very quickly found

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Speaker 1: someone else to talk to because that was sick of

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Speaker 1: hearing about it. But it's it's been it's been a

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Speaker 1: number of years, and I've got to admit I was

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Speaker 1: at one point a blockchain not bitcoin person. But as

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Speaker 1: you sort of alluded to, when you strip away all

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Speaker 1: of the hype, how does this technology actually help? And

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Speaker 1: I've founded my my work it generally doesn't. So this

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Speaker 1: is pretty big because, as you said, you used to

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Speaker 1: be a blockchain not bitcoin person. You should talk to companies,

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Speaker 1: work with them about the idea of incorporating blockchain into

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Speaker 1: their business practices. And now you say it generally doesn't.

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Speaker 1: So walk us through this stepsode. What do companies think

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Speaker 1: is going to happen when they sort of you draw

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Speaker 1: some blockchain related technology into their business, and then what

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Speaker 1: actually happens when they try. Generally, the story is that

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Speaker 1: we've got we've got a number of entities that we

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Speaker 1: want to all coordinate our data together, and blockchains help coordinate,

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Speaker 1: coordinate data, coordinate people or entities without there being some

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Speaker 1: sort of central party. What generally happens, though, to get

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Speaker 1: to that stage, you need to form some sort of consortium,

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Speaker 1: some group of players together. You need to define some

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Speaker 1: sort of standards, you need to you need to work

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Speaker 1: out how you how you perform governance going on, and generally,

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Speaker 1: when you're doing that, you form some central body to

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Speaker 1: do all of that and um. And the thing is,

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Speaker 1: by when once you've formed that central body, you've done

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Speaker 1: all the complex coordination that's required generally in the enterprise space.

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Speaker 1: Technology addressing these problems is not the It's not the

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Speaker 1: issue it's just getting really hundreds of different stakeholders on board.

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Speaker 1: Because if you're just dealing with one entity, you know,

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Speaker 1: one large bank, you're dealing with technology compliant operation to

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Speaker 1: the front office, there are a lot of stakeholders just

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Speaker 1: in that. So when you want to build a blockchain

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Speaker 1: across all of these various entities, the tough bit is

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Speaker 1: getting all of those different parties together. Once you've done that,

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Speaker 1: once you've addressed that, this is pretty inefficient technology to

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Speaker 1: actually use to implement the solution. Right, So the sales

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Speaker 1: pitch is that I can build essentially a database or

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Speaker 1: you know, a line of information that's immutable and that

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Speaker 1: is not controlled by a single party, and that can

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Speaker 1: exist amongst entities that maybe don't trust each other. But

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Speaker 1: you're saying that in order to get to that point,

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Speaker 1: you pretty much have to have a group of entities

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Speaker 1: that trust each other and are able to coordinate in

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Speaker 1: some sort of centralized fashion exactly. And we've got a

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Speaker 1: pretty solid legal system to ensure that people can trust

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Speaker 1: each other. Right. Financial institutions form contracts with each other

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Speaker 1: all the time, even though they will be competitors in

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Speaker 1: um in some way, and and and that where the

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Speaker 1: enforcement falls back on if you create some technology to

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Speaker 1: try to re enforce that, you're going to need to

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Speaker 1: end up relying on the legal system if someone breaks

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Speaker 1: those rules anyway. So why use what's fundamentally a very

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Speaker 1: inefficient technology that was developed for a very specific purpose.

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Speaker 1: Explain this because I think a lot of people who

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Speaker 1: don't know much about the space are surprised to hear

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Speaker 1: that the technology is inefficient, because the appeal is like, Oh,

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Speaker 1: it's going to strip out all of this legacy code

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Speaker 1: and it's really fast, and it's decentralized, and decentralized sounds

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Speaker 1: like a really good buzzword, and so it's very efficient,

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Speaker 1: and we imagine that there's it's gonna like strip out

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Speaker 1: all these like gigantic server rooms. Why are blockchains inherently inefficient?

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Speaker 1: It's a funny fallacy that that hunger that's caught on

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Speaker 1: from back in the earlier days of bitcoin, where the

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Speaker 1: message was we can move bitcoin or we can perform

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Speaker 1: payments or move value faster than the current financial system.

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Speaker 1: It's more efficient in the current financial system because I

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Speaker 1: can send you will send money instantly to Tracy now

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Speaker 1: who is on the other side of the world. I

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Speaker 1: think literally on the other side, so I could I

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Speaker 1: can send money and Tracy will have it with within

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Speaker 1: ten minutes. Right, Um, that sounds great, but there's a

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Speaker 1: lot of stuff in that that's not included. There's not

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Speaker 1: the all of the transaction monitor monitoring, anti money launching,

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Speaker 1: all the operational stuff that's around any bank, right, that's

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Speaker 1: around any payment system. So people realize that didn't work,

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Speaker 1: and then they said, well, if this technology can move

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Speaker 1: payments more efficiently, what else can it do more efficiently?

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Speaker 1: And then it's sort of stuck. So that was sort

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Speaker 1: of something that hung around. Now, if you have a

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Speaker 1: look at how bitcoin accomplishes that that movement, it's it

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Speaker 1: does a couple of things. One, if I'm sending money

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Speaker 1: or sending bitcoin to Tracy, Tracy knows that I have

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Speaker 1: sent it because she can see that it's a little

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Speaker 1: bit more complicated, but she can see that I had

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Speaker 1: that balance to send, and the rest of the network

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Speaker 1: can see that I had that balance to send. So

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Speaker 1: everyone is storing all of this information right right. And

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Speaker 1: the second piece is how does Tracy know that I

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Speaker 1: have only sent that to her and I haven't also

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Speaker 1: sent it to you. There's this very complex mathematical calculation,

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Speaker 1: this mining process that makes sure that I'm not doing that.

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Speaker 1: This really seems like the key thing, which is that

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Speaker 1: it's not just that you're sending money to Tracy, it's

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Speaker 1: that everyone on the entire bitcoin network is seeing you

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Speaker 1: send money to Tracy. So it's actually wildly inefficient in

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Speaker 1: a sense. It may serve a purpose, but if it's

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Speaker 1: like if I sent you an email, but the only

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Speaker 1: way I could send you an email is if everyone

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Speaker 1: in the entire world who had an email account also

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Speaker 1: got to see that, we could just see This would

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Speaker 1: be an extremely computationally intense process. Absolutely, and when you're

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Speaker 1: when you're sending and that's a that's a good example.

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Speaker 1: If we have a look at something like email, that's

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Speaker 1: just data, So it doesn't matter if you're the only

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Speaker 1: one that gets it or someone else doesn't validate that

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Speaker 1: you received it. That's just between us. If you're talking

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Speaker 1: about value, that does matter. If people are duplicating it,

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Speaker 1: that does matter, if people are creating more than they should.

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Speaker 1: So you sacrifice a lot of that computational efficiency to

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Speaker 1: solve this very specific problem, which was what bitcoin solved

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Speaker 1: in the first place. So it's been one of these

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Speaker 1: unfortunate things where that that initial fallacy of this efficiency,

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Speaker 1: of this speed was was sort of taken and run

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Speaker 1: with it, and people forgot that this was a very

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Speaker 1: niche computer science problem that was solved using, you know,

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Speaker 1: very complex, inefficient solution. So I believe in the world

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Speaker 1: before blockchain, we would call that database sprawl, right, So absolutely,

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Speaker 1: how how much of an issue is that for a

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Speaker 1: company that is trying to do a real world application

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Speaker 1: with blockchain? And it kind of feeds into a second

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Speaker 1: question that I would like to ask, which is how

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Speaker 1: many of the real world applications or projects with blockchain

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Speaker 1: we're actually distributed in a significant way, because we saw

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Speaker 1: a lot of companies announced test cases with blockchain, but

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Speaker 1: then they would say, oh, and by the way, this

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Speaker 1: is only for us, it's only on our servers, it's

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Speaker 1: not even decentralized. Yeah, a couple of things. Firstly, any

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Speaker 1: enterprise technology transformation is very costly and requires a huge

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Speaker 1: amount of coordination. So there's in my ten years at

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Speaker 1: the firm UM, I don't think I came across a

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Speaker 1: client that couldn't have benefited from one giant data warehouse

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Speaker 1: where all of the data is reconciled all of its

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Speaker 1: console it dated. The number that had that is very few,

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Speaker 1: just because to set up something like that is hugely

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Speaker 1: costly and you're you're talking multiple years for paybacks. So

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Speaker 1: these are coordinating. What technology spend is useful and what

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Speaker 1: isn't in an enterprise is the job of the CTO,

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Speaker 1: and it's complex. A block chain doesn't change that. A

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Speaker 1: blockchain is still very costly to implement, just like any

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Speaker 1: other just like any other infrastructure. So the question is

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Speaker 1: if we could have done this previously with architecture that

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Speaker 1: we have that we had before blockchains, then why didn't

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Speaker 1: we Because I'm not sure it would change. A blockchain

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Speaker 1: is going to change that dynamic. The second thing is,

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Speaker 1: and this is worth noting, is it's neon impossible to

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Speaker 1: define exactly what people mean by blockchains. There's a common

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Speaker 1: thing that comes that keeps on coming up is that

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Speaker 1: in many definitions that people when people try to define

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Speaker 1: what a blockchain is, how it often doesn't differ from

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Speaker 1: say a Google spreadsheet UM or just an append only database.

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Speaker 1: Because if you start talking about distributed systems, well that's

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Speaker 1: a distributed database. UM. If you talk about decentralization. Well,

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Speaker 1: that's very that can be difficult to define because there

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Speaker 1: can be spectrums of that and people have different views

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Speaker 1: on exactly what is decentralization. So it's one of those

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Speaker 1: things that it's sort of got a buzzword that everyone

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Speaker 1: thinks they know what they're talking about when they say

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Speaker 1: a blockchain. But I've seen a lot of technologies out

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Speaker 1: there that define themselves as you know, as blockchains, that

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Speaker 1: work very, very differently. So it comes down to is

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Speaker 1: a blockchain just simply a chain of blocks um, In

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Speaker 1: which case it's that's just an append only database and

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Speaker 1: a pretty boring data architecture UM. But that doesn't really

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Speaker 1: address all of the clams that people say it does.

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Speaker 1: So another selling point of blockchain technology is that it's

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Speaker 1: a sort of shared database. It's replicated across participants, depending

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Speaker 1: you know, on how they want to use it. But

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Speaker 1: the integrity of the data is supposed to be ensured

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Speaker 1: because you're using you know, these mathematical calculations to verify

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Speaker 1: it each time, and everyone can see all the underlying

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Speaker 1: blocks and all of that. Is that actually true or

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Speaker 1: is it possible that blockchains can be gamed by a

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Speaker 1: bad actor? And that the underlying data can be manipulated.

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Speaker 1: The data can really almost anything in computer scidence or

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Speaker 1: in in data structures like this can be gamed. It's

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Speaker 1: just how difficult is it. A blockchain in this, in

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Speaker 1: the in the sort of bitcoin or um in that sense,

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Speaker 1: is incredibly difficult to game because the data is spread

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Speaker 1: out across a lot of participants, so you've got to

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Speaker 1: get everyone to change it. And secondly, the software that

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Speaker 1: is adding that data is run by all of those

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Speaker 1: different systems, so you've got to go in and change

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Speaker 1: that software as well. So yes, it is very, very

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Speaker 1: difficult to change that data, but it's worth noting what

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Speaker 1: you've sacrificed to do that. In at least in enterprise systems,

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Speaker 1: Essentially you are giving up governance of that data structure,

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Speaker 1: and so on the plus side, you can never change

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Speaker 1: the data. On the downside, you can never change the

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Speaker 1: data if there is an error, if the software needs

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Speaker 1: to be upgraded, if there needs to be a format change,

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Speaker 1: any any of that sort of Any of that sort

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Speaker 1: of stuff then needs to be coordinated across every single

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Speaker 1: system that's managing this. So the more complex you make,

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Speaker 1: you a technology solution using a blook chain, the bigger

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Speaker 1: the chance that something will go wrong. Yeah, well, I

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Speaker 1: was gonna say so, Like one of the things about bitcoin,

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Speaker 1: and it's a plus in a minus, which is that

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Speaker 1: if I, like send want to send you some money

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Speaker 1: or send you some bitcoin, but I accidentally like put

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Speaker 1: in the wrong address, then we're screwed. Like that's I mean,

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Speaker 1: maybe the person who if we can find that person

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Speaker 1: who got the money, maybe they'll be kind enough if

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Speaker 1: they can figure it out to reverse it, but probably

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Speaker 1: we're screwed. And so when I like hear about stuff

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Speaker 1: like we're gonna put like real estate on the blockchain,

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Speaker 1: it's like, what if, like I buy a house from

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Speaker 1: you and it turns out that at the very last

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Speaker 1: second during the closing, someone puts in the wrong address.

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Speaker 1: Either they were really screwed or we can reverse it,

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Speaker 1: in which case it probably wasn't really a blockchain in

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Speaker 1: the first place, you or a fat finger error. And

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Speaker 1: so yeah, and you so half the state. Yeah, it's Um.

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Speaker 1: The the other thing in real estate is a funny

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Speaker 1: one because that that also gets brought up because um,

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Speaker 1: how do you tie the blockchain to the actual real

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Speaker 1: world as well? Right, And this gets actually, so it

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Speaker 1: was something I want to ask, and I think it's

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Speaker 1: sort of I want to flesh out your first point,

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Speaker 1: which is that the challenge with all this stuff is

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Speaker 1: not the technology, but in getting everyone to agree. And

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Speaker 1: once you've gotten everyone to agree, then you've kind of

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Speaker 1: solved the problem that the tech is. So I'm thinking

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Speaker 1: about something like, okay, tracking lettuce on a block chain,

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Speaker 1: like the real challenges like who gets to scandal at us? Right,

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Speaker 1: you have to like, you can't have anyone go around

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Speaker 1: with a barcode and a scanner scanning let us into

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Speaker 1: the blockchain. Someone has to be like authorized participants to

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Speaker 1: go around with a scanner and their scanner is connected

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Speaker 1: to the database. But it seems like if you can

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Speaker 1: then all agree on who gets to have these scanners

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Speaker 1: and whose passwords work, then again, like you've already solved

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Speaker 1: the hard part. Absolutely, And how do you make sure

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Speaker 1: that people are scanning all the lettuces or that someone

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Speaker 1: hasn't substituted a poor let us for a good let us.

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Speaker 1: I'm not sure how big a problem. Yeah, absolutely, absolutely,

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Speaker 1: you know, counterfeit let us. So there is the data

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Speaker 1: in a blockchain in theory is perfect, but that's not

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Speaker 1: the data problem that that we generally have. It's on

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Speaker 1: the ins and out data quality doesn't happen because a

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Speaker 1: sequel server is fundamentally bad at keeping the data right.

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Speaker 1: It's wrong because the data the different formats between systems. Absolutely,

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Speaker 1: that doesn't change with the blockchain, so vegetable arbitrage aside.

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Speaker 1: I'm curious how we got to the point that we

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Speaker 1: began our discussion with this blockchain but not bitcoin idea, Like,

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Speaker 1: how did companies actually ease upon this technology as something

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Speaker 1: that was going to transform their various businesses? How did

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Speaker 1: we get to that point. It's it's a funny one

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Speaker 1: because the question comes up when I when I'll say this,

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Speaker 1: as people will say, well, are you telling me that

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Speaker 1: all of these companies are wrong? The challenge is that

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Speaker 1: when certainly in any sort of innovation, sometimes headlines are

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Speaker 1: you know, headlines are quite important to the business, and

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Speaker 1: you know, some of this will be sort of marketing strategies,

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Speaker 1: and some of this will be you know, just simply

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Speaker 1: experimentation and learning about this. If I were a major

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Speaker 1: financial um, if I were running a major financial institution

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Speaker 1: and everyone's telling me that this technology is going to

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Speaker 1: make me redundant um, I would be full to not

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Speaker 1: invest and explore this and with my work when I was,

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Speaker 1: when I was with the first moment um, you know,

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Speaker 1: with well with with all of these organizations, it makes

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Speaker 1: sense to assess this, to do your due diligence to

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Speaker 1: understand what this technology is and isn't. What's happened is

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Speaker 1: that some of that's really sort of caught on. And

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Speaker 1: so my my theory, when people start seeing press releases

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Speaker 1: from different organizations, when people start hearing all of these

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Speaker 1: grand promises, what's important is to demonstrate that you're doing something.

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Speaker 1: And there's a certain, you know, a certain level of

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Speaker 1: group think where there's a lot of looking sideways and

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Speaker 1: not necessarily looking, you know, looking underneath. I think there's

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Speaker 1: a great analogy here with the asset management industry, in

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Speaker 1: which there's a lot of risk to swimming against the

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Speaker 1: tide and you could get So let's just say there

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Speaker 1: is a world in which banking primarily goes on the blockchain.

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Speaker 1: Whatever that means. You would be taking a lot of

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Speaker 1: career risk and someone would probably get fired if you're

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Speaker 1: the CTO of some bank who didn't do that. Like

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Speaker 1: if everyone else said wow, we've we've really found a

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Speaker 1: way to like cut out all this back office and

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Speaker 1: efficiency by putting all this data on the blockchain, and

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Speaker 1: they're everyones reduced their costs and one bank didn't like

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Speaker 1: that CTO is in trouble. But if everyone jumps at

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Speaker 1: the same time into it and it doesn't work out,

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Speaker 1: then it's like, well, we invested some money, it didn't

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Speaker 1: work out, but no one gets into trouble. So for

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Speaker 1: the individual, there's a lot of pressure then to just

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Speaker 1: sort of go along with all the press releases and

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Speaker 1: all the other people. We absolutely and to be perfectly honest,

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Speaker 1: it's not that expensive to do it right, it's it

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Speaker 1: And so it's it makes sense to make that bet,

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Speaker 1: as you say, because do you do you really want

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Speaker 1: to stand up and say that all of these other

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Speaker 1: ones are wrong, because you know, on the if you

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Speaker 1: don't say that, like you could at least go on

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Speaker 1: a panel and sounds smart. And I say that I'm

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Speaker 1: only like have joking when I say that, But I

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Speaker 1: I often like wonder, like how much is that motive

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Speaker 1: ation for someone who is like a technology executive at

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Speaker 1: a bank. They're just like, you want to sound smart,

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Speaker 1: you want to be a thought leader, right yeah, And

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Speaker 1: and also you know, as um, while I you know,

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Speaker 1: I preach restraint and all with this technology, one thing

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Speaker 1: that I think it is doing, and I think this

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Speaker 1: is where a number of the projects are getting to,

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Speaker 1: is it's making institutions rethink their core infrastructure and maybe

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Speaker 1: start looking at making some of these investments that they

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Speaker 1: haven't previously because they've realized we've just been plotting along

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Speaker 1: for you know, ten twenty years, just doing minimal upgrades

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Speaker 1: to our technology because that's been good enough. But this

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Speaker 1: has made the rethink that, you know, maybe our position

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Speaker 1: isn't always going to be safe, and maybe we need

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Speaker 1: to have a real rethink of this core infrastructure, even

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Speaker 1: if it goes down the track of something centralized and

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Speaker 1: something that doesn't really need a blockchain. Has it really

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Speaker 1: sort of disrupted the technology organized nation enough that they've

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Speaker 1: thought about new ways of restrctfrastructure. So okay, so maybe

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Speaker 1: it's forcing some institutions to think about their technology infrastructure

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Speaker 1: in a more holistic way. But I have to ask,

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Speaker 1: do you see any real world application for blockchain technology

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Speaker 1: where it would actually a work and be makes sense?

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Speaker 1: Private block chains? No? The one thing or at least

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Speaker 1: there's nothing that I can see right now. But look,

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Speaker 1: I could be you know, I could be wrong. There

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Speaker 1: is a reason why bitcoin was designed as a very

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Speaker 1: simple technology in that it only really transferred value and

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Speaker 1: had some very small, simple bits of logic for the

401
00:24:51,680 --> 00:24:56,200
Speaker 1: reason that if something goes wrong, um, it's very difficult

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Speaker 1: to change. So you want to limit the number of

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Speaker 1: things that can go wrong consequent lee applications for this technology.

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Speaker 1: If you're not talking value transfer, you're really talking about

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Speaker 1: time stamping, right, or storing data in a way that

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Speaker 1: it can't be changed. You're not necessarily talking about you know,

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Speaker 1: big complex logic or anything anything like that. You're talking

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Speaker 1: value transfer or time stamps of data making sure that

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Speaker 1: something was at a particular state at a particular point

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Speaker 1: in time, and that can be valuable. The thing is,

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Speaker 1: when you're looking at that sort of time stamping, you

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Speaker 1: can do that on a public blockchain, and it would

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Speaker 1: probably be cheaper than all of them, than all of

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Speaker 1: the complications around setting up your own That distinction you

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Speaker 1: make between a private blockchain and a public blockchain For

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Speaker 1: people who aren't familiar with those terms, the private blockchain

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Speaker 1: is essentially like the consortium of lettuce growers, and a

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Speaker 1: public blockchain is like a bitcoin or an ethereal. Yeah. Yeah.

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Speaker 1: The the idea was the bitcoin or ethereum you could

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Speaker 1: send around value or do other sorts of things. But

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Speaker 1: to do that, you had this whole mining process that's

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Speaker 1: had the computational problems to solve. Uh, to incentivize people

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Speaker 1: to look at this data the private blockchains, I said, well,

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Speaker 1: if we all know who each other are, we're incentivized

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Speaker 1: to cooperate, so we can do away with the mining.

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Speaker 1: So I guess to sort of sum this up, the

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Speaker 1: maybe like okay, obviously quite bearish on the sort of

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Speaker 1: private blockchain enterprise blockchain stuff. Within the public blockchain world,

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Speaker 1: there's still massive debate about whether anything at any value

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00:26:42,400 --> 00:26:44,960
Speaker 1: besides bitcoin, or whether there needs to be anything besides

431
00:26:45,000 --> 00:26:48,560
Speaker 1: bitcoin or ethereum. Now you have a you know, the

432
00:26:48,600 --> 00:26:52,240
Speaker 1: last couple of years, this Cambrian explosion of all coins

433
00:26:52,320 --> 00:26:56,320
Speaker 1: trying to do something different. Stable coins are in this year.

434
00:26:56,720 --> 00:26:59,080
Speaker 1: But you said something very interesting at the beginning, which

435
00:26:59,119 --> 00:27:03,439
Speaker 1: is that, so what bitcoin was created? The technology is

436
00:27:03,560 --> 00:27:07,399
Speaker 1: very complex or sorry, there's a very inefficient, cumbersome to

437
00:27:07,480 --> 00:27:11,880
Speaker 1: serve a very narrow specific use case. As you look

438
00:27:11,880 --> 00:27:15,040
Speaker 1: at the crypto blockchain lands kept going forward, do you

439
00:27:15,080 --> 00:27:20,200
Speaker 1: see any other use cases besides essentially that essentially narrow

440
00:27:20,440 --> 00:27:25,280
Speaker 1: value transfer from you to tracing. There could be, but

441
00:27:25,400 --> 00:27:28,480
Speaker 1: I think that that builds on that base of value transfer.

442
00:27:28,880 --> 00:27:31,480
Speaker 1: So if you have a look at the Internet, we

443
00:27:31,600 --> 00:27:35,800
Speaker 1: didn't We didn't get all of the fancy apps and

444
00:27:36,160 --> 00:27:40,600
Speaker 1: social networking and all of all of these applications without

445
00:27:40,680 --> 00:27:43,439
Speaker 1: just getting a web browser an email. Right. There was

446
00:27:43,480 --> 00:27:46,160
Speaker 1: friends to back in the nineties, and there were IoT

447
00:27:46,280 --> 00:27:49,280
Speaker 1: devices and a number of other sorts of things that

448
00:27:49,320 --> 00:27:52,880
Speaker 1: we have now. The dot com boom is is uh,

449
00:27:53,080 --> 00:27:55,760
Speaker 1: you know, it's the famous period where where people were

450
00:27:55,760 --> 00:27:58,720
Speaker 1: developing a whole lot of stuff, but fundamentally there wasn't

451
00:27:59,000 --> 00:28:03,040
Speaker 1: There weren't enough pill on board using that just core

452
00:28:03,280 --> 00:28:09,640
Speaker 1: applications and decentralization you mentioned very exciting buzzword. I don't

453
00:28:09,680 --> 00:28:12,520
Speaker 1: think your person on the street really knows or cares

454
00:28:12,560 --> 00:28:15,320
Speaker 1: what that is at the moment. But what we do have,

455
00:28:15,440 --> 00:28:20,120
Speaker 1: and um, I've seen you make this point before and

456
00:28:20,359 --> 00:28:24,960
Speaker 1: it's it's absolutely where I stand with this. Value transfer

457
00:28:25,440 --> 00:28:30,560
Speaker 1: at the moment is something that bitcoin censorship resistant value

458
00:28:30,600 --> 00:28:36,680
Speaker 1: transfer or storage is the thing that bitcoin or these

459
00:28:36,680 --> 00:28:40,080
Speaker 1: other cryptocurrencies can do that no other system can do.

460
00:28:41,000 --> 00:28:42,920
Speaker 1: And there are parts of the world where that's important,

461
00:28:43,600 --> 00:28:46,520
Speaker 1: where you don't have the choice to use a traditional

462
00:28:46,560 --> 00:28:51,560
Speaker 1: financial system. So in my view, that's really where the

463
00:28:51,640 --> 00:28:55,240
Speaker 1: benefit for this is. You've got countries Zimbabwe, Turkey, Iran

464
00:28:55,360 --> 00:28:58,880
Speaker 1: where people value a store of value that's away from

465
00:28:59,160 --> 00:29:02,959
Speaker 1: that's away from the government. In the developed world, people

466
00:29:03,360 --> 00:29:06,880
Speaker 1: like to bet on commodities and people would like to

467
00:29:07,880 --> 00:29:10,600
Speaker 1: bet on the future. And I think that's the application here.

468
00:29:11,080 --> 00:29:17,200
Speaker 1: So until we get that real adoption of that value transfer,

469
00:29:17,640 --> 00:29:20,120
Speaker 1: which happens by solving a need that people actually have,

470
00:29:21,640 --> 00:29:24,800
Speaker 1: I question the other applications because in a lot of

471
00:29:24,840 --> 00:29:31,360
Speaker 1: cases you can do decentralization or create distributed applications without

472
00:29:31,360 --> 00:29:37,200
Speaker 1: a blockchain. So a blockchain doesn't really change that paradigm.

473
00:29:37,280 --> 00:29:43,520
Speaker 1: So are you you are now bitcoin not blockchain? Yeah? Yeah,

474
00:29:43,680 --> 00:29:47,240
Speaker 1: And and the you know, while while bitcoin has the

475
00:29:47,280 --> 00:29:49,960
Speaker 1: network effect and is the is dominant at the moment,

476
00:29:50,360 --> 00:29:53,160
Speaker 1: whether that is the one that's going to be going

477
00:29:53,200 --> 00:29:56,160
Speaker 1: to be dominant in future and more open about but yes,

478
00:29:56,320 --> 00:29:58,840
Speaker 1: without that, I think it just all comes down to

479
00:29:58,880 --> 00:30:02,560
Speaker 1: censorship resistant you transference storage, in other words, just a

480
00:30:02,600 --> 00:30:06,080
Speaker 1: digital commodity that's away from government. And I hear this

481
00:30:06,160 --> 00:30:07,680
Speaker 1: a bit when I talk to people. They say, look,

482
00:30:07,720 --> 00:30:09,480
Speaker 1: I don't really think that bitcoin is going to be

483
00:30:09,520 --> 00:30:13,120
Speaker 1: a thing unless maybe you're in the developing world. My

484
00:30:13,200 --> 00:30:15,480
Speaker 1: view is I sort of agree with that, but the

485
00:30:15,520 --> 00:30:19,160
Speaker 1: developing world is the world's population. That's a reasonable market.

486
00:30:19,920 --> 00:30:23,760
Speaker 1: On that note, great conversation, Angus Champion to Kutny, thank

487
00:30:23,800 --> 00:30:47,680
Speaker 1: you very much for a coming on. Thank you Joe's Joe.

488
00:30:47,760 --> 00:30:52,280
Speaker 1: I thought that was an absolutely fantastic conversation and really

489
00:30:52,400 --> 00:30:55,560
Speaker 1: encapsulated a lot of the criticism that we've seen about

490
00:30:55,600 --> 00:30:59,600
Speaker 1: blockchain throughout the years in a really relatable way. I

491
00:30:59,680 --> 00:31:02,280
Speaker 1: could agree more because you just see all these press

492
00:31:02,320 --> 00:31:05,280
Speaker 1: releases and people trying to sound smart and all this

493
00:31:05,400 --> 00:31:07,760
Speaker 1: obvious stuff, and you just have so many questions and

494
00:31:07,840 --> 00:31:10,320
Speaker 1: it's like, look, if you're gonna scand the lettuce, like

495
00:31:10,360 --> 00:31:13,080
Speaker 1: who's gonna scandal lettuce? And if anyone can scandal let us,

496
00:31:13,160 --> 00:31:16,200
Speaker 1: Like what are you really accomplishing? And if you have

497
00:31:16,520 --> 00:31:18,800
Speaker 1: a sort of white list of people who are allowed

498
00:31:18,840 --> 00:31:20,880
Speaker 1: to scan the lettuce, then why do you need a blockchain?

499
00:31:21,200 --> 00:31:23,680
Speaker 1: All these questions I've had in my head for so long,

500
00:31:24,080 --> 00:31:26,560
Speaker 1: and it's great to hear from someone who has been

501
00:31:26,640 --> 00:31:29,200
Speaker 1: talking to companies and involved in it for a while

502
00:31:29,600 --> 00:31:33,840
Speaker 1: basically saying, yeah, the scandal Lettuce problem really is a problem, right,

503
00:31:33,880 --> 00:31:36,360
Speaker 1: because if you can build the consortium, you can build

504
00:31:36,400 --> 00:31:39,640
Speaker 1: the consensus to do that much, then yeah, you're sort

505
00:31:39,680 --> 00:31:41,920
Speaker 1: of just throwing technology on top of it for no

506
00:31:42,040 --> 00:31:44,760
Speaker 1: reason at all. But I thought the conversation as well

507
00:31:44,840 --> 00:31:48,000
Speaker 1: on that point about why companies insist on doing this

508
00:31:48,360 --> 00:31:51,480
Speaker 1: was really interesting and the notion that you know, if

509
00:31:51,560 --> 00:31:54,320
Speaker 1: everyone else, if there's a chance that everyone else is

510
00:31:54,400 --> 00:31:56,880
Speaker 1: going to do this, you don't want to be the

511
00:31:57,000 --> 00:32:00,200
Speaker 1: one left out. And but that said, you know that

512
00:32:00,280 --> 00:32:04,280
Speaker 1: old saying about how you never got fired for buying Microsoft, Um,

513
00:32:05,000 --> 00:32:07,000
Speaker 1: do you remember that? It is weird to me that

514
00:32:07,120 --> 00:32:11,320
Speaker 1: this technology that came from this mysterious bitcoin white paper

515
00:32:11,920 --> 00:32:16,560
Speaker 1: that was basically designed, you know, for circumventing the existing

516
00:32:16,680 --> 00:32:22,280
Speaker 1: financial system got adopted so readily by so many sort

517
00:32:22,320 --> 00:32:26,800
Speaker 1: of white chee corporations around the world. Well, maybe no

518
00:32:26,920 --> 00:32:29,640
Speaker 1: one will get fired for talking about it, but maybe

519
00:32:29,680 --> 00:32:31,760
Speaker 1: the first person to get fired will be because they

520
00:32:31,800 --> 00:32:35,440
Speaker 1: actually full up to put their words into action and

521
00:32:35,560 --> 00:32:38,720
Speaker 1: then when their entire business system grinds to a halt,

522
00:32:39,160 --> 00:32:41,320
Speaker 1: they will be fired. But yeah, I totally agree, and

523
00:32:41,360 --> 00:32:43,800
Speaker 1: I had the exact same thought about you never get

524
00:32:43,880 --> 00:32:47,360
Speaker 1: fired for buying Microsoft or IBM or whatever it is.

525
00:32:47,720 --> 00:32:52,000
Speaker 1: That is just such a powerful business incentive. And we

526
00:32:52,200 --> 00:32:54,720
Speaker 1: think about, you know, if you take the sort of

527
00:32:55,880 --> 00:33:00,120
Speaker 1: sort of neo classical view of economics and business of

528
00:33:00,320 --> 00:33:05,160
Speaker 1: rational actors in the economy making decisions based on profit

529
00:33:05,240 --> 00:33:07,560
Speaker 1: and losses and stuff like that, but then you realize

530
00:33:07,600 --> 00:33:10,240
Speaker 1: that in the real world people are just scared to

531
00:33:10,360 --> 00:33:12,520
Speaker 1: not do what other people are doing. You get a

532
00:33:12,640 --> 00:33:14,960
Speaker 1: much sort of much more honest sense of about it

533
00:33:15,080 --> 00:33:18,640
Speaker 1: of how business actually works. Yeah. Absolutely, and you're right.

534
00:33:18,680 --> 00:33:21,160
Speaker 1: I think it was you never get fired for buying IBM?

535
00:33:21,480 --> 00:33:26,160
Speaker 1: Wasn't it quickly one forgets? Yeah? Alright, Uh well, this

536
00:33:26,280 --> 00:33:29,400
Speaker 1: has been another edition of the Odd Thoughts podcast. I'm

537
00:33:29,440 --> 00:33:32,200
Speaker 1: Tracy Alloway. You can follow me on Twitter at Tracy

538
00:33:32,280 --> 00:33:35,360
Speaker 1: Alloway and I'm Joe Why Isn't All? You could follow

539
00:33:35,440 --> 00:33:38,600
Speaker 1: me on Twitter at the Stalwart and you can follow

540
00:33:38,720 --> 00:33:42,200
Speaker 1: Angus on Twitter at Angus Champion, and be sure to

541
00:33:42,360 --> 00:33:46,360
Speaker 1: follow our producer tofur Foreheads on Twitter. He's at foreheads

542
00:33:46,440 --> 00:33:50,000
Speaker 1: t as well as the bloomberg head of podcast, Francesco

543
00:33:50,120 --> 00:34:06,600
Speaker 1: Levy at Francesco Today. Thanks for listening year