Usman: What we're going to do is actually move into the next panel on identifying use cases and to that end if I can call up Parna Sabat-Stephenson. She's a partner here at Gowlings, one of our key technology lawyers. Also Marc Lijour who is solutions delivery lead at ConsenSys. Then also Karim Hamasni who is development lead Crypto Asset Innovation for RBC Global Asset Management. Then also Jeremy Chan who's a founder of the Jonah Group. So, Parna.
Parna: Thank you, Usman. We're going to start off by actually asking you guys to tell us a little bit about what it is that you do and how do you come into this space. Marc, go ahead.
Marc: Thank you, Parna, and good morning everyone. I'm Marc Lijour. I'm from ConsenSys. I'm coming from the perspective of the deploying IT applications for enterprise. That's what we do at ConsenSys. Originally a venture … We've about 50 different startups in ConsenSys founded by … and it's about deploying capital and now we're going to the enterprise market and co-venture with our partners to create the digital infrastructure of the 21st century.
Parna: Thank you. Jeremy.
Jeremy: Hi There. My name is Jeremy Chan. I'm one of the founders of a software development consultancy called the Jonah Group, here in Toronto. We work with custom enterprise solutions from medium to large sized businesses, including banks, insurance companies, health care companies. Jonah is about 131 people and I have two co-founders and we do custom solutions for those companies.
Parna: Thank you. Karim.
Karim: Good morning everyone. My name is Karim Hamasni and I'm the development lead of Crypto Asset Innovation at RBC Global Asset Management. My day to day role is to do POC's in an innovation sandbox. There's a number of challenges facing institutions to get into the crypto asset space and my team is tasked with just exploring potential solutions to these challenges. I got into crypto back in 2013. I was mining it at a time just for a personal gain and I was the guy at the office that wouldn't stop talking about Bitcoin. When a need for some innovation projects arose I was naturally the guy that fit in. I'm a developer by background so I'm just really glad to be working in this emerging technology space. Thank you.
Parna: When I was actually looking at your title it occurred to me a couple of years ago no one would have imagined that one of our big banks would have someone with your title and role and here we are today. We had this great presentation from Hilary as to what can be done with Blockchain and all the really cool things that are happening out there. But I think a lot of people are asking themselves, "Well, how do you really identify how you can have use cases and what you can do in your own business." With that, first I think it's important to actually think about what Blockchain can be used for and, perhaps, what are instances which not such a good idea to be using Blockchain. Karim, do you want to start off with that?
Karim: Sure. Absolutely. The first question to ask yourself on whether or not Blockchain is a good use case for your business is whether or not a data base can serve the use case better. When it comes to storing data Blockchain is actually a very inefficient data base. It takes a lot of processing power. It's clunky. It's relatively slow. We have scalability issues. If your use case can be better served with a data base then Blockchain is not the right answer for you. Another major thing that you want to look for in Blockchain technology is whether or not you trust the counterparty in the business case they're using it for. Blockchain is best served when you have two parties trying to do business that don't necessarily trust each other. Then you can off-load that trust into the Blockchain. Traditionally we'd have to employ intermediaries, or middlemen, to handle that business case between the two counterparties and we'd all put our trust into that middleman. But the Blockchain is a really great way at disintermediating that trust and letting code control the business transaction.
Parna: Jeremy, do you want to add to that?
Jeremy: Sure. I think much has already been said about how to identify these use cases. I think one thing that might be missing is that when you want to motivate a collaborative behaviour between arm's length parties. I think this is the real social innovation behind Bitcoin which went by in Hilary's presentation quite quickly but it's a really important notion. The killer app for the Blockchain to date has been Bitcoin and that's why it's been so successful. It's because there's the participation in that consensus algorithm allows you to earn a reward for doing that. There's an incentive to validate the data on the chain and to make sure that the data is not compromised. The technology gives you a part of that but then there's this incentive portion that allows you to brings parties together who otherwise wouldn't collaborate with one another.
Marc: I'm going to build on that and you can find actually online some very good flowcharts that take you to ask yourself 4 or 5 key questions about is Blockchain a good thing for what I'm trying to do. I'd like to go one step back and look at the very big picture which is the mindset. The mindset behind this type of technology, which you might have sensed through Hilary's presentation, is that helps you to think differently about the world. Do you see the world as Napoleon or antique role kind of model where you have the boss on the top and everybody has to follow and everything is controlled by different layers of bureaucracy. Or do you see the world as cooperating actors that are interplaying with each other each bringing some kind of value to the whole system. This is what modern technology allows us progressively to do. Whether it's server less infrastructure. Whether it is Blockchain. This is what we can design and implement today. But first, from the business side, we need to ask question. What kind of system am I building and what exactly I'm trying to do. In the Walmart case, I'm just going to finish with that example, in the Walmart case Walmart is basically the leading providing in the world. Then I say, "Well, I want to force everybody else to come to me." Which is fine. In other cases some of the smaller players might want to say, "Well, what if we have a common infrastructure that covers the planet and everyone can act and interplay in a fair way where no one has an incentive, or an advantage, compared to the others." For example, the fish application we have. At ConsenSys we have the tool called Viant that we work with GSK and some leading packaging industry and there is a fun video on YouTube to watch called "Bait to Plate" that shows exactly the same thing you can design with the tool your own value chain, if you want to.
Parna: So you go through the process first and then you determine perhaps Blockchain could be a good thing for what I'm looking to do. From there how do you actually identify specific use cases? What is the thinking process that you go through? Karim.
Karim: Certainly. You really do have to recognize who you're doing business with and then work with them to play ball. To get into this collaborative environment, as Marc was alluding to, and then see what kind of efficiencies you can gain by disintermediating the trust from the middlemen that you'd normally put your trust into. Essentially, that's it. You've got to make sure that the other partners that you're working with are collaborating with you and that you can gain some efficiency by working in a level playing field.
Jeremy: Yeah. I would say that you're going to have to get a lot more efficiency then you need from searching the Blockchain just because the architecture of a Blockchain application is quite a bit more complicated than traditional applications. You have to make decisions like what will be the transaction rate, how often do I need to see that a transaction has occurred. You have to be able to know what data is stored on chain versus off chain. There's a lot of different considerations that you have to make so when you're coming up with your business case, not that there aren't these cases, but there has to be a significant jump in efficiency, as you're saying. Also, I think one of the most important things to consider is whether or not you really want to be acting as an intermediary and just saying it's a Blockchain application to get that Blockchain machine that everybody's talking about. Or whether or not you really want to participate in a collaborative network such that you are on a level playing field with everyone else. In the Walmart case, they're forcing everyone onto this Blockchain, really it provides a service to the consumer. In other words validating the lettuce, the origin of the lettuce, as Hilary was saying. But it's not really a level playing field. They're making people who want to supply to the company go onto this chain. I think that once you have competitors in that space you'll see something more collaborative emerging from that.
Marc: So one thing I think we should all agree on is that Blockchain is not the new toy that you have to run and implement today. It would be the biggest mistake. Blockchain is another tool in your toolkit that you can use. If the leader in your organization you should rather think about how do I redesign by business, engineer my business, digitize my business, what else can I digitize? When I was advising CEO's at Cisco what we were telling them is the story of internet of everything. Everything's being digitized and we can help you digitize your organization. Which means don't put a website on top of it without changing anything because it will achieve nothing. It's about re-engineering your organization to leverage technology in such a way that you create new lines of revenue and that you save money somewhere else. With Blockchain its really this to the power of 10. Because it allows you to digitize your value chain. Your entire network of supplier and clients and provide efficiency at that level. It will be a really bad idea to implement Blockchain within the wall of your organizations. How ConsenSys goes about it, we are coming from the point of view of a … We look like VC or private equity that have 50 startups and a lot of products, portfolio that we can deploy and use, but with a con-searching arms solutions, which is about 25% of 1,200 people across 35 countries, we are going to enterprise to find those use cases. You're trying to find those C level individuals, business leaders, who are want to take advantage of the next wave of technology innovation. We bring to the table technical expertise and money to co-invest with them and have skin again. We are looking across industry. What are the best opportunity with those business leaders.
Jeremy: Just to expand on that for a second.
Parna: Please go ahead.
Karim: I think it's important that when you're trying to identify the use case for your business that there's one aspect that has to be there that you are collaborating with a lot of other parties. You need to in order to generate these efficiencies that you're looking for. As you were just saying, within the walls of your business, if you're the only participant why would you implement a Blockchain? It makes no sense. Even with a couple of participants, especially if it's a public chain, you want to have a lot of participants because on public chains the number of participants in your network are really what guarantee the security and the immutability of the chain.
Jeremy: Can I answer that as well?
Parna: Yes.
Jeremy: So when the internet first came out a lot of people had fears about what open access to information would lead to. A lot of companies rushed to create intranets. Although intranets do a have a lot of value we didn't see the global transformative power until the internet really blossomed. The internet opened up that collaboration. The same kind of logic can be applied to Blockchains. A lot of companies are rushing to build private Blockchains within their organization and they have very limited use cases. We won't truly see the transformative power of Blockchain until we have that open collaboration that expands the world.
Parna: Something you mentioned Marc. You touched on the fact that you identify revenue generation and efficiencies that can be achieved. A comment that I hear often from clients is at an executive level people are looking for revenue generation. They're not as interested in use cases where you're achieving efficiency and perhaps saving on costs. Is that sort of your experience as well working in your own distinct world?
Marc: Yes. Yes and no. You have to go a little deeper than that because if you're looking at revenue generation, and that's all you're looking for is revenue, you might actually fall into a couple of traps like those ICO's and get really into trouble, if you're going too fast that way. Because there is so much to fix and redesign in terms of laws, regulations, I think the next panel is going to touch on that.
Parna: I should say perhaps revenue generation in the context of enterprise. More like implementation of Blockchain and enterprise that would lead to revenue generation versus cutting costs.
Marc: Right. So just following my line of thought there, on the other side of cost savings there is, yes less sexy, but when you think about coordination of different actors, if you will. Remember Blockchain is really about how do we bring these different actors to play together. Doing so you digitize kind of the world supply chain, in a way, and now you know it's just in time and all those things. So Blockchain brings that to another level, and it also creates efficiencies for sure, but it also creates a new economy where some actors are being removed, for sure. Like Hilary talked about Silicon Valley. Not to become them but why should we pay 30% on every single transactions for transportation or anything? This has created dissatisfaction. You're finding a better way to do things. We remove some actors, save some money there, and create a new economy that will create some value somewhere else. This is what it is about.
Karim: Can I add to that point as well?
Parna: Yes.
Karim: The barriers of entry right now to get into Blockchain technology are relatively high but they get broken down more and more every day. As soon as those barriers of entry get broken down you just opened your market up to many, many more people that can now participate in this new economy that Marc is alluding to. We are very much in the early days. Just like we were in the internet and it did take time to ramp up. But one day I very much feel that many people globally are going to have access to the Blockchain which is going to immediately give them access to your business.
Jeremy: I'd say that in comparing the Uber ride sharing service with, I think it was Eva that Hilary was talking about, and as you noticed on both slides Uber is taking 30% and people didn't like that. But then there's this 15% that goes to Eva, or the co-opt, they've kind of renamed it a co-opt. But they're still taking a fee. I think the thing is application developers, like Eva or Uber or whatnot, will still want to take a fee and people will have to pay that fee in order to access the service. But the difference is it will be a much fairer fee because it will be a much more open economy. Don't expect that you won't pay fees.
Parna: Now we've identified use cases, how do you get going? How do you get the stakeholders involved? And of course at what stage do you get legal involved? In your personal experiences.
Jeremy: Speaking for the Jonah Group we get involved when a customer comes to us and says, "Hey we've got an idea. Can you help us out?" It's really difficult. We've got a set of technologists who are really interested in playing with the technology and doing something with it. But we don't have real world problems to work on, as yet, because we're a consulting organization. We try to basically meet companies to do an audit of some of the issues that they're looking at and see if the Blockchain, we have a way of going through, there's a decision tree, and whether or not Blockchain is appropriate for that. Often companies don't want to invest a whole lot of money at the start when they don't really know what will come out of it, so we create a sandbox with the company to that, to take one of their real world problems and marry it with our technology people and just do some free consulting work. You really do need just a little good will sometimes to kick these things off.
Parna: Interesting. Go ahead Marc.
Marc: Like I was saying we are working a lot with C level executives and people who actually have the reign on their companies and can make decisions and investments with us. We are focusing on the strategy things. It's all about deploying capital so we have a very long term view. Therefore, we want to be very strategic. Those technical projects like, "I need an app" or "I need to solve XYZ" we'll likely not be involved. We're deferring these. Providing that business to our consulting partners. The big four consulting companies that are doing fine job with that. We are focusing on long term investment, opportunity, creating new business models and bringing our expertise is pretty firm on doing that.
Parna: Karim?
Karim: I can't necessarily speak for what we're doing at RBC. My work is not so much driven by business goals but more just testing of the technology. But I think what we're looking for is we're looking for those leaders in the space that are going to get everyone motivated to enter the space. As soon as a large company starts to set a bit of a standard practice, as to how to interact in this collaborative environment, you're going to see that the people that they do business with join in as well and collaborate on this platform, and so on and so forth, and then it'll start to grow. We're still very much in the early days but there are some companies such as ConsenSys that are really proving out the technology and getting the attention of those C Level executives to enter the space. Once that happens I think you're going to start to see a lot of organizations recognize how the collaborative nature can benefit their business and then analyze those use cases.
Parna: So of course, speaking from the legal standpoint, we often find that by the time that we get consulted quite a lot of effort has gone into, on the technical standpoint and business standpoint, in testing the use case.Yes?
Marc: Let me second that. We're looking at Blockchain projects or projects we're doing which has some elements of Blockchains but has a lot of other elements of everything else. It's about an IT project, and like any good IT project, you want to involve the security guys, your lawyers, everybody upstream, as upstream as you can, so that you actually design the right thing the right way from the get go, rather than trying to fix things later on.
Parna: Right. This is exactly how we'd like it to be. The reality of it is that if we are consulted too late there may some challenges in implementation and that's not really something that anyone wants to hear when they're too far down the road on something like this. Hilary alluded to some of the issues. For example, GDPR, or other issues you will be hearing more on a legal panel as well shortly, and those are the things that really need to be considered early on as you decide is this the right use case in the first place. So, now you've got everyone involved. What are some of the challenges that you guys have faced? Go ahead, Jeremy.
Jeremy: Sure. I mean there's a whole host of challenges. I'm just going to call out a couple of them. One of the things that surprised me was executing applications on the Ethereum network. Requires something called Gas which is something that you have to buy in order to do that. But the volatility of the price of Gas is extremely high. If you can imagine it's a very odd situation where you don't even know whether you're going to be able to necessarily afford to run the application that you have built on Ethereum because of the volatility of the price of Gas. That was a new thing for me. The second thing was that storage on a Blockchain is incredibly expensive. Storage in a data base per gigabyte is super cheap. But on a Blockchain everybody's got a copy. It's validated and immutable so, I had no idea, but the price of storing it as of this past summer, a gigabyte of data on a Blockchain is about a million and a half bucks on the Ethereum network. You really just can't throw data on the chain willy nilly. You have to be very judicious about where you put things and what you store off chain and then what does that mean? For the off chain data how is that managed and who has control of that? The last thing I want to say is everybody's looking at the amazing things that Blockchains can go but there's this interface between the virtual world, or the digital world I should say, and the real world. There's a difference between enforcing the providence of a truckload of lettuce, let's say, on the chain versus enforcing it in the real world. Just because it says this is happening on the chain doesn't mean that that's happening in the real world. From a perspective of ownership, or providence, or whatever it might be.
Karim: Adding to that if you do tokenize something like a land deed you still need the rule of law to enforce your ownership rights. The bridge between the real world and the Blockchain world is definitely a challenge. Also when it comes to key management, that becomes a challenge as well. If you ever lose your private key then you might lose control over the assets that you claim right to. So far digitally native assets have worked the best on the Blockchain. Things like cryptocurrencies or even something like cryptokitties which falls within the cryptocollectibles realm. Those ones immediately tackle ownership of digital assets because we still haven't necessarily solidified how we are going to tackle the ownership of physical ownership in the real world.
Marc: There are all kind of challenges to be harnessed because it's so new technology. We're not seeing the end of it but it's typically, I see, some kind of inflection point in where things are moving to approach it very quick. I would cite regulatory issues. For instance we have products to do custody, to do issuance of bonds or loans or any kind of financial instruments, but you can imagine that the regulator's opinions about how things should be done, and our partner or clients they also have some concerns about sticking their neck too far out the window sometimes. These are the regulatory issues. Now on the technical issues we certainly have a lot of technical things. You draw a map ahead of us to fix things and make things better. It's no different from any other technology. I was just thinking the intranets, the domain name system that basically transform Google to an IP address, and when you type in "mycompany.com" it will look for the right IP address behind the scenes. What used to be a file that people would go in and add their things manually in there for the entire intranet of the time. It feels a little bit like this still. We have three main Blockchain technology for enterprise. Ethereum, Hyperledger and Corda R3. We believe that Ethereum, as the largest community, 30 to 40 times larger the second best. We invest a lot on Ethereum and but we don't do only Ethereum. We actually have hired a lot of people from R3. We have hired the co-designer of the Hyperledger platform, John Wolpert. So we are very familiar with the technology for enterprise and Ethereum as a public Blockchain but it also can be the deployed internally as a private Blockchain. There's a whole kind of variation for Ethereum for enterprise and ConsenSys also just released a new client which is the thing you use to get online, if you will, for the enterprise market on Java's tech. In terms of things that are happening next there is specifications with the enterprise if they're in alliance with the largest Blockchain associations. 600 companies with the big banks in there, Cisco, Microsoft. Scaling, people working on different technology to make payment as fast as Visa and MasterCard. Unfortunately, also, Ethereum is some kind of single threaded computer which means only one program can exist at a time on the entire world which is a waste. So people are working on sharding. There is this Beacon chain coming up. Lots on the technology but a lot of smart people are working on it. With the regulator, like you mentioned GDPR, some of our team has just released a report on GDPR for the EU Commission as part of the Blockchain Observatory and Forum in the EU.
Parna: So if someone from the audience comes up to you after this session and says, "I want to get going. I have a use case." What would your advice be? What is your top 10?
Marc: If you're going from scratch and have a use case definitely assemble a team in your company. You cannot rely on anyone from outside to tell you what to do with your business. Assemble a team, a little center of excellence, as a kernel or as a stop or a seal or something. Let them do the homework. Let them read books, go to conference, talk to all the providers out there and let them make their own assessments. That would be the first step.
Parna: Jeremy?
Jeremy: That's really great advice. I mean it's still exploratory in nature this world. You really do have to have a group of people focused on it and experimenting in a sandbox, I think. I think I would try to make sure you had people from all walks of life. One of the things that happens with smart contracts, with contracts I should say, typically lawyers write contracts and then they interpret the contracts and the intent of those things, but when you write a smart contract it may be the case that a lawyer may not be able to interpret what the intent of that computer code is. You really do have to have your legal team working with your technical team. Putting together those kind of multi-disciplinary tiger teams.
Parna: Karim?
Karim: As Marc alluded to earlier you really have to see what kind of impact this will have on your whole business. The internet changed the way that we have to look at our business all the way down to the core. If you start to employ Blockchain to run many of the functions of your business it's going to have to change the way that you run your business. Down to the core as well. You have to evaluate, not just the idea and the specific use case, but what kind of ripple effect that will have throughout your enterprise.
Parna: We have one more question before we move on to questions from the audience. Where do you think we are in terms of industry and adoption at this stage?
Marc: Financial services definitely had investing a lot of money. I think there is a Newsweek article of, I think "Facebook" is in the title, but it's really about the story of Blockchain. It's about the local history in Toronto as well. With some numbers from IDC and some other analysts, I think, calling from top of my head right now, I think they're saying 500 million dollars investment by FI's. Definitely there's a lot of activities that we've been working with monetary authority of Singapore. Lots of projects there. More projects coming down the pipe. We've done the Central Bank of South Africa. There's a report of 80 page long explaining how Ethereum has been tweaked. We tweak Ethereum to make it go faster and be complianced here with the banking regulations. There is a large trade financing project with 15 of their largest banks including City Bank, ING, Shell for oil and gas, that's going strong. There is a project in the Philippines, 80 banks relating island banks to provide money to islanders. Which technology we use is now also available for everyone to use on Amazon web services, on the market place. It's free until the end of the year. It's a Blockchain as a service where anybody can fill a form and build a consortium of, let's say, banks or whatever you want to do online for free until the end of the year. As a trend, definitely all industries are being impacted. Financial services are first and bolder and in terms of geography, Asia, is running with the bull there. Several others of magnitude, what Asia is up to, is way ahead. The sense of urgency, let's put it that way, is not the same here. In the Western world.
Jeremy: I'd say from a technology perspective it feels to me, as a technologist, that we're quite early days. The way that one of our people puts it Ethereum is at version 1 but it's version 1 of a number of version 1 things. You have the Ethereum virtual machine version 1. You have the solidity language version 1. The ERC20 token. Then you have your first smart contracts and applications that many things are going wrong on. It feels like what version 1 feels like, to me.
Parna: Karim.
Karim: Yeah. The analogy is often tossed around that we're in the 90's, where the internet was. And as cliché as that is it kind of is true. The bubble term was tossed around then and the bubble term is tossed around now. What's really interesting is that every technology that's worthwhile has had had a bubble. In these bubbles you find that a lot of investment comes in and develops the foundation. That ends up leading us into the growth phase where things become solid and they become worthwhile. As we wait for the dust to settle we're going to start to see these foundational technologies within the Blockchain space start to take a foothold and begin to do the actual work that's going to lead to the transformative technology that Blockchain offers us.
Parna: Someday you'll be saying, "That I actually attended a session on Blockchain at Gowlings and believe it or not people were full in the room and talking about this." We're going to open it up to question. Please don't be shy. Any questions you may have for our panel of experts? Please.
Audience: On the use cases that you mentioned in the … world, how probable is it that you can actually …
Jeremy: Sorry, what was the last part?
Audience: Example …
Jeremy: I think so. Yeah. It depends on how you write the code for that application. So certainly if you want to write something that restricts someone's ability to perform operation X based on their identity on the chain you can do that.
Marc: In our conversations with the SCC, the regulator in the US, actually that's something I understand they're getting really excited about. The ability to enforce in the security itself a good behaviour that you cannot work around. If you have to be vested a certain period of time, for example, then you are vested a certain period of time and the system will enforce that. That could be an example to you.
Jeremy: That was one of the things, actually, a high profile hack of the Ethereum platform, the DAO hack, the hack occurred but there was a rule that didn't allow the ether to be drained from a certain account for a period of 30 days, or something like that, that was within the contract which is what allowed them to get those funds back in the first place. Wasn't without controversy.
Parna: Any other questions? Please, go ahead.
Audience: You're talking about Blockchain but have you seen any other similar crypto technologies that you've been looking at that have the same implementation or stuff coming up like a DAG?
Jeremy: Any similar crypto technologies?
Audience: Like a DAG.
Jeremy: I'm a little familiar with IOTA which is a DAG. The growing pains that IOTA has is it really needs a lot of participation for it to be secure. As the DAG grew out they had to have these master nodes to help run the network which added centralization in it growth phase. They still haven't solved for the master nodes that are required. So there's still a lot of centralization within DAG's today. If DAG's hit mainstream, and they grow more then, they can eventually decommission those master nodes and then they can let the network run itself. How a DAG works, I'll just give a quick little run down, is every participant on the network kind of connects together in a mesh. Distributing that connection, and making sure that the data flows and doesn't congregate into individual nodes, they had to have segregated master nodes that they set up. It is technical question. I don't think we have enough time to go through all the technicals of it today. But so far Blockchain has been the most reliable use case of distributed ledger technology and DAG's still have some time to prove themselves up.
Marc: It's implemented which is you can see run now and you can do test and do actual have facts about it. You have these new Blockchain or alternatively Blockchain technology coming every time and people get excited. One of the last ones was EOS. There was a third party study that actually did burnt a lot of those, let's say expectations or claims from EOS, their report is online. The DAG also, the fact that you could go with that master node, some people argue that you'll never be able to get out of there. Until you do it, or you can prove it with a math, then I guess the question is up in the air.
Audience: I'm sorry. I didn't mean it to be too technical. I think the answer is you haven't seen anything emerging that's challenging a Blockchain form at the moment.
Jeremy: That's correct. Yeah. Like he mentioned, he brought up EOS, which is another type of Blockchain. But they wanted to sacrifice decentralization for speed and throughput. They designed it so that they would have 21 minors, so to speak, that would run the Blockchain. They thought 21 participants to run the Blockchain would be enough decentralization but what they didn't account for was a lot of these 21 block producers, as they're officially called, were colluding with each other. Surprise, yeah. So, EOS is turning out to be more vapor ware. Now we're looking back at the Blockchain model, where we do have issues with throughput, but we do have all those really beneficial characteristics that we want out of a Blockchain that are still intact. There are going to be challengers that come up and try to fight the current Blockchains but so far none of them have been successful enough. We have yet to see if anyone can come up with anything viable. It's still the early days. Like you said, Ethereum is working. Bitcoin is working and they are so far the most immutable ledger systems humanity has ever created.
Karim: I think as well, there's a couple of different aspects to what we are calling Blockchain systems, and you might not need all of these things. One of them is this immutability property which comes from the way the public key cryptography worked on the chain and the instantiation of the data in a chain. History is preserved but there's also the distributed ledger property and there are other technologies that don't have immutability but they have distributed ledgers. It really depends on what you're interested in.
Parna: Yes.
Audience: For a lot of us that are old school I'd like to see a couple of examples of things that really work. Maybe a … industry oriented like will Blockchain work for all of the people who are buying and selling properties? Just as an example. But it seems to me that for a lot of us we need few easy applications that are applications in every business like mergers and acquisitions or finance. But I haven't seen any easy things come out of the Blockchain thing so far.
Parna: Specifically, in real estate, I think that actually currently is being tested quite a bit. In Africa, for example, quite a few jurisdictions are looking at it. I think it's early days but it will be coming hopefully to satisfy everyone's need for proof.
Marc: We're working on treating Africa with one of those opportunities with the president of a country. There's a particular application that exists also here that we have deployed in Dubai. It's called Meridio and what it does it securitize a piece of real estate and then allows you to buy very small pieces of, let's say, unit then you can go. But for the user you go on your app or website and you basically see all your investment, how this unit performs independently. Money coming in. Money coming out and there is a secondary market where you can trade these little tokens with other people who want to buy them. It's working. They bought a building in New York, I understand, but it's still very small scale. To your point, I think the future of Blockchain is going to be, where you're going to see Blockchain is where you open your app store and you say, "Read more" and you have all the specifications in there. Say, "Okay, use this SSL means you can go on the internet securely and nobody's listening to you between your bank." You have SSL, Blockchain, all the good things, but people don't care about Blockchain. Nobody wants to use Blockchain except the engineers. Just need to know that it's underneath making things more secure. In terms of large scale applications, today, no. To your point there is not really large scale very popular applications I can think of. Except maybe cryptokitties, Bitcoin, but still Bitcoin's not want they want.
Karim: What's really interesting about Blockchain technology is that it led with the technology first and user experience is now starting to catch up. Right now when a company commissions a new product, when it comes to tech, they always leave with a design thinking strategy and try to nail down the user experience and then get the tech to follow. But like the internet it led with a tech. It took us awhile for us to get used to the a with the ring around it as the "at" symbol. In fact there was a video that I've seen where the hosts of the Today Show were arguing what that symbol even means, in the early days of the internet. Blockchain is very much like that too. It's led by engineers. I was just at a developer conference where one of the biggest issues they were trying to tackle was the user experience for Blockchain so that it is easy enough for the average person to use. It's not there yet but there is a major push, a major drive, to get that user experience to where it needs to be. So that it breaks down that barrier of adoption and then regular people can start using it effectively.
Parna: Go ahead.
Audience: Blockchain nice and wonderful from a social internetworking perspective when … One of the things we that we got with sort of a large centralized technology firms is accountability. You have somebody to go after should there be a bug in your code. It doesn't really have a contract working the way it's supposed to. Where are you seeing those roles coming into play? Would it be decentralized communities of Blockchain and where do you see professional services firms coming into assist or not assist in this new emerging web-scape?Marc: One thing that's starting to happen is commoditization of some very, very, the dumbest legal services like contracts. We are working with Rocket Lawyer. Is something like Legal Zoom in the US where people can go and basically buy a very simple contract, employment, Will or whatever that is and it's powered behind the scenes by the Blockchain with a technology called up in law. That's actually been used by McCarthy Tetrault here, sorry for my French, to launch a loan on the Blockchain. Some of the mechanics of agreement, digital signature, proof that an agreement has been made and turning it into something that executes automatically in the IT systems. There is a lot of Blockchain in there. That's happening. So for legal firms there is a lot of work, I can see volume increasing of those kind of things, as you make things more seamless. It's going to be a lot of work into reviewing this contract, providing legal advice but the biggest … I think when you are in the decentralized world, is when you used to have to do like say a multi-company agreement, you need to have 12 lawyers from here, 12 lawyers from there, 12 lawyers from there, to agree on the same document. I had the same conversation last week on a panel with somebody from IBM and he was saying, "Well, it's really hard to get 20 lawyers from different companies to agree on every single paragraph." When you can start decentralizing this and you bring your decision in-house you can agree on the contract from your end. Then interface with the rest of the world based on the conditions that you agreed on. That was something interesting. Now if you look at AI, from the IBM's point of view, AI is kind of helping also in finding some coordination and never gets to 100% agreement either. But the technology's kind of finding a best effort kind of thing. Which is important. There are technical advances that you have to take into account in the legal profession, which I'm not the right person to tell you where your profession is going to go, but definitely it's going to change a lot of things. Making some certain things easier and some people like you, and last week, like, "Maybe lawyers should learn how to read code."
Parna: We've have been having a lot of discussion on our front as well. There's no doubt that there will be new players coming in but at the same time there's an evolution that will happen for law firms, such as ours, which is why we're responding with the large practice that Usman referred to as well. We see evolution and we want to be ahead of it from that standpoint. No doubt. Also, you mentioned some of the consulting firms, for example. They have already, a number of them, large sophisticated Blockchain groups anywhere from the technology implementation, the POC's that we're currently talking about to the auditing side of things as well. It's something that all of us, collectively in the business world, we are certainly responding to and recognizing that the rapid evolution of the technology and how foundational it will be for us as well.
Jeremy: I think I can add to that. It's a philosophical question, as Marc was kind of referring to right at the start, do you want to have a central authority to appeal to? Is that who you are? Or are you a person who wants kind of more decentralized authority. If so you'd be against any kind of centralized action on a system like a Blockchain. A lot of the technologies have got technologists that were involved with Bitcoin in the early goings, they're attracted to it because there is no one to appeal to. You are your own, you know, you're responsible for actions on the network. That's an appealing thing. Whereas to large institutional investors, or investors, of any kind that might not be so appealing. You're going to have different governance structures to serve different communities.
Karim: This might be a general answer but one of the major appeals to accountability in Blockchain is the fact that a lot of what happens on the Blockchain is transparent. I know Hilary mentioned that a lot of the times when you send a charitable donation around the world a lot of it gets taken away before it hits its final destination. But now with the Blockchain you can track a donation all the way through to its recipient and it can hold accountable every party along the way. Having this kind of open infrastructure that you can audit will hold people accountable to doing the right thing on a Blockchain when they know that more eyes are on them.
Parna: Was there a question there as well?
Audience: If you look at … Amazon, Facebook, Google, they have access to enormous amounts of capital and they have very smart people working for them. They have to be looking at this emerging technology with big eyes. If you were advising them what would you advise them to do to maybe get ahead of this, maybe own it, if you were sitting in their … group? Trying to turn this into a position. What would you advise them to do?
Marc: I don't know that I have any advice for them. I mean, they're at the center of centralized economy. There's a book. I've forgotten the author but it's called "Life After Google" and it was the same author who wrote "Life after Television" thirty years ago and many of the prophetic thing that he said in the first book he's now predicted again. What he's saying is that the time of Google and Facebook and whatnot is just basically over. Obviously they don't want to hear that so a lot of these large companies are going to be spending a lot of money trying to maintain a position of central authority over data and whatnot but I think they're not going to be able to do that. They're going to have to get into another business. Which I'm sure they will it's just not going to be the business of buying and selling your personal data, for instance.
Karim: I can speak about Facebook specifically. I know for a fact that one of their top executives left his initial post to work on a Blockchain project within Facebook. He also sat on the board of directors for Coinbase and had to leave his seat on the board of directors because of a cited conflict of interest. So we know that they do have a worm and they are working on something. An opportunity that I see for a company like Facebook is to empower users with control of their own data. To build a Blockchain infrastructure that allows people to monetize their data for the ads that Google serves up for them. There's a lot of projects that are looking to compete with Facebook in this regard. One of them is called basic attention token were people can monetize their data. I think if Facebook wants to survive in a disintermediated world they need to follow a similar pattern and start to the empower their users more rather than look at them as a commodity.
Parna: Some of them have started making offerings, as well, as you mentioned. Blockchain as service, for example. That's something. They're already there. They're responding.
Marc: That's something that is very easy for them to do and they already started a long time ago using their massive infrastructure to run things in the cloud and let people run the applications on their things. They could provide more sophisticated services, I guess, on top of that like Google has done for AI. That would be a way. I'm not thinking too much in Google's or Microsoft head because I think we need to really decentralize the web. Remember that time when you had a computer under your desk and everybody had a webpage basically running from home and the idea of Tim Berners-Lee was actually I can connect to his computer and to a computer from China, from all over the world. It was really creating a mesh in a peer to peer information. Today seems that we're living a perversion. Like a nightmare where you can count on one hand where the data is which I think, it's dependent on the one hand, and too far that way. I'm just hoping it goes back the other way.
Jeremy: To add to that internet analogy a little bit. What's interesting is I saw a demo from the Internet Archive who's goal it is to just archive the internet because they feel that that information should be readily available to all. But they're facing challenges with censorship in various countries around the world. Where there site is simply being blocked. So now they're experimenting with a decentralized version of the internet archive that when you log on, you create your own node an you're sharing with other nodes around the world and that gets over that censorship. We're finding that the internet, because of these major incumbents that are running the internet and also governments that can step in are able to censor people from the data. But where it's going with decentralized systems is that you do limit that censorship resistance and you allow the data to be readily available to all. It's taking the power out of the hands of major players like Google and so on.
Marc: I think one legal battle that I'm seeing and is very anecdotal, from my perspective, but in Asia we have some clients in the telecommunications space. Usually they know a lot of people. They start making the case that people should know about the data, know about the data that's being inferred or find out about them, and be given an options to actually go and sell data. If they want to make a buck on it the people should actually be involved, agree and also get some money back. So it's about more fair use. But behind all this there is a lot of legal conversations about who owns the data. I hope that we're going to refine a little more about this and go into little deeper into what's identity, what's privacy, what are human rights in the new context and I can't wait to live in a better world. Maybe not to be part of that but have good lawyers that can help us.
Parna: It is the new goal no doubt.
One last question.
Audience: Can we just go back to the example with Uber. Obviously … technology but can you explain why putting that data on Blockchain will drive down the incremental amount that these companies like Uber alternative will earn? Why is it the fact that because the data's on a Blockchain you are going to actually necessarily drive down prices?
Jeremy: Because if it's on a Blockchain you'll be able to see where all the payments are going. Hundred dollars comes in this way. Twenty-five dollars goes to the driver. Seventy-five goes to Uber. You're going to be able to see that.
Audience: It's just the social pressure.
Karim: It's beyond that too because Uber's the middle man in the transaction between the rider and the driver. If the interaction between the rider and the driver can be off-loaded to a smart contract then you cut out all that infrastructure that Uber built in order to pair that driver with the rider.
Karim: Somebody's going to have to write that smart contract.
Jeremy: Someone will and they oftentimes write a little bit of a fee shaver fee insect contract.
Karim: But you'll be able to see how much that is, right?
Jeremy: You can check that contract yourself. It's readily available on line. It's transparent and you can make sure that you agree to the terms of the contract before you send any payment to it in the form of digital currency.
Marc: This is key to really understanding what's going on there. Like Uber that provides very few but very essential services. Matchmaking. Securities. So something fishy happens you can trace back people. All of this is to enable this peer to peer economy. I wouldn't jump in your car because I don't know where you are. You don't know where to pick me up. I'm not too sure if I really want to go into your car. I don't know you and you don't know me. So Uber provides that. Better technology could solve those problems and Blockchain solved actually some of these problems.
Jeremy: Another thing too, about who do you know who to trust on the Blockchain. If you don't have Uber intermediating that relationship between the driver and the rider there's reputation systems that are built on the Blockchain. Because the Blockchain is immutable people have to earn their reputation and nobody can go back and clean it their history. That's another promise that Blockchain offers is developing these reputation systems so you know who to trust in this decentralized world.
Parna: Gentleman, thank you for sharing your insights with us. As you can see with all the questions we've had everyone's found this incredible interesting. Thank you for that.