BLOCKCHAIN The Audacity To Break Into A New Economic Period [RE] - - PowerPoint PPT Presentation
BLOCKCHAIN The Audacity To Break Into A New Economic Period [RE] @richieetwaru scope of todays conversation Bitcoin Blockchain v.s. Just an instance of the blockchain Where is commerce globally Requires miners, and personal
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v.s.
Bitcoin Blockchain
Just an instance of the blockchain Requires miners, and personal computing power Relies on “proof of work” Where is commerce globally Understanding blockchain Where does commerce go next
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2000 - 2020
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Competitive greenfield
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1960 - 2000
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Competitive greenfield
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Democratizing Credit Compressing Distance Industrializing Trust
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2020 - 2040
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Drivers license issued 001 1996 First speeding ticket 002 1997 License renewed 003 2001 Stop light violation 004 2003 Driving while intoxicated 005 2003 License suspended (6 months) 006 2003 License reinstated 007 2004 Second speeding ticket 008 2013
005 2003 006 2003 007 2004
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Drivers license issued 001 1996 First speeding ticket 002 1997 License renewed 003 2001 Stop light violation 004 2003 Driving while intoxicated 005 2003 License suspended (6 months) 006 2003 License reinstated 007 2004 Second speeding ticket 008 2013
DMV NYC Police Dept. DMV - Online NYC Police Dept. NYC Police Dept. NYS Court DMV NJ State Police
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“Trust me, you can trust me.” “Easily test if I am trustable.”
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Data that can be exchanged 1:1 without intermediary Financial Data Identity Data Reputation Data Inventory Data Market Data Agreement Data Corporate Data
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DMV NYC Police Dept. NJ State Police Richie’s Personal Copy
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VS
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“I need to know you to transact with you” “Your trustworthiness is publically available
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New trading partners at low cost and high confidence Those that I already know and already trust Those I already know but don’t really trust as yet Those that I don’t know and as a result don’t trust Those that I don’t know that I don’t know as yet
Intra-organization Inter-organization & intra-industry Inter-industry and intra-geographies Inter-geographies
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New data sets that can be trusted at low cost Unfamiliar partners transacting in intimately New information ecosystems New business networks
New market structures
Blockchain is emerging as the exponential agent for IoT and AI
Blockchain IoT
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Things In My Body Things On My Body Things I Carry Around Things Around My Body Things In My House Things That House Me Things That Transport Things That Help Commerce Things At Work Things That Build
Digital Health Wearable Clothing Connected Homes Smart Cities & Transportation Supply Constellations Industrial Internet Invisible Computing Smart Consumer Electronics Connected Government
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Internet of dumb things Internet of chatty things Internet of
Internet of useful things Internet of smart things WHAT CAN THEY DO Things that are connected digitally Things that can have conversations Things that can execute instructions Things that can report
Things that can engage and add value WHAT DOES IT FEEL LIKE Light sensor can
absence or presence of light Camera connected to a tall building Controller that can change the temperature in a house Sensor in trunk of car learns from calendar that you are driving to golf game, notices the golf clubs not in trunk Sensor on mattress or bedroom to know that a person did not have enough rest at night WHAT IS AN EXAMPLE Sensor to see if a light is on or
Lens that can report back remotely what it sees Thermostat that can be told to change the temperature in a house Network of sensors verifies that golf clubs are still in the garage, and orders a pickup service to bring your golf clubs to the course Sensor communicates with admin & calendar, moves an 7AM meeting to 8AM, and informs alarm clock to allow human one more hour
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New data sets that can be trusted at low cost Unfamiliar partners transacting intimately New information ecosystems New business networks
New market structures
Blockchain is emerging as the exponential agent for IoT and AI
New-er information ecosystems New-er business networks
Trusted Commerce
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Finance Data Identity Data Reputation Data Inventory Data Market Data Agreement Data Cooperate Data
TRUST 1A 2A 3A 4A 5A 6A 7A CONSENSUS 2A 3B 3B 4B 5B 6B 7B AUTONOMY 3A 4C 3C 4C 5C 6C 7C
Figure 1: Blockchain Institutional Revolution Maturity Model
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Democratizing Credit Compressing Distance Spotlighting Fraud
Experience & Engagement Trust & Transparency Price & Quality Basis of Differentiation
Survival of Incumbents
Schizophrenic Loyalty Low Loyalty To Untrusted Brands Loyal to Incumbent Brands State of Customer Loyalty
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There is need for multiple types of companies to be interested in the state
Some datasets are only important to one party, or a small fixed number of parties who have worked with each other a long time, hence very clear and trusted processes are in place to enable multiple well-known parties to access the same dataset
Types of companies greater than 25? Normal distribution of company sizes? Data equally important to all company types?
TOTAL 1 2 3 4 5 6 7 8 9 10 3-10 Unlikely Likely
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Multiple parties can write new records to the dataset
While some datasets are viewed by many parties, it may only be written by one party. In some cases,
Types of companies greater than 10? Amount of times per day is greater than 12? Some parties have permissions that others don’t?
TOTAL 1 2 3 4 5 6 7 8 9 10 3-10 Unlikely Likely
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Each new record is additive, and changes derivatives from the entire dataset
The aggregates derived from the dataset is of primary importance, and said derived aggregates changes with every new record. For example, the price of a stock, each new record is important as it tells the most recent price. While a derived aggregate such as average price over a period of time can be useful, its secondary.
New records can be added daily? New records create important derived data? 50+% of participants must know derived data?
TOTAL 1 2 3 4 5 6 7 8 9 10 3-10 Unlikely Likely
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The parties that can write new records may be in competition, conflict, or low trust with each other
If all parties have the same goal, exposure and intent, it may not be a good blockchain use cases, as the behavior of each party is already aligned to good data.
There can be private and public sector involved? There are large existing intermediaries? Less that 50% of the parties share common goals?
TOTAL 1 2 3 4 5 6 7 8 9 10 3-10 Unlikely Likely
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Rules to validate the sanctity of new records can be different from one writing party to another
When records are written, rules are applied (beyond CRUD) such as business rules, or industry regulations and they need to be applied uniformly to each writing party; not left up to interpretation.
Over 50% of rules have changed in 10 years? Regulations are different in geographies? Something to be gained by parties breaking rules?
TOTAL 1 2 3 4 5 6 7 8 9 10 3-10 Unlikely Likely
To Blockchain or Not to Blockchain
Wha hat cons nstitut utes bi billion n do dollar blockcha hain n bus busine ness cases
The core difference between an on-chain business and an off-chain business is the way data is managed. Blockchain is not a raw material such as silicon, plastic, iron
For example, one cannot manufacture an aircraft using blockchain to replace aluminum or leather, instead all of the data that represent how, when and with what the aircraft was built can be put on-chain so that the airline purchasing the aircraft has a trusted dataset longitudinally created on a blockchain by multiple participants and people who manufactured the aircraft. While a dataset like this is possible to assemble today and sell with an aircraft, it is not done because of the complexity of integrating multiple participants and people, and the absence of a method to guarantee that the data representing the aircraft’s manufacturing history was not manipulated before provided to the airline in the time of sale. Providing an immutable history of the how, when and with what of an aircraft at the time of sale is not a billion dollar blockchain business cases. It is a business case for blockchain, but would not create a billion dollar of valuation in the first year if launched. Creating the systems to make sure that data representing the operation of the aircraft continues to be on a blockchain, and the data representing the servicing
can all be easily and in real time uploaded to a blockchain by dozens or hundreds
passengers is more of a billion dollar blockchain business case. Here this dataset can then be used to determine pricing of a flight (safer airplanes are more expensive to fly in), airline safety and compliance to government agencies, and predictability of breakdown for logistics and preemptive service scheduling are attributes of a billion dollar blockchain business case. This example illustrates that billion dollar blockchain business cases are more likely to be a change in the method of commerce between multiple participants
(private, public, and people) to change the way they use data to trust each other, and the transparency that exist between trading entities in a business ecosystem. But how do we find these business cases? For a long time we have been building businesses as islands in an ocean of opaqueness, and low trust. There are not many good examples (as yet) and no emerging best practice. This paper is an attempt to trigger the revolution to Trusted Commerce.
BBBC Scoring System
There are 10 principles of a billion dollar blockchain business case here to be evaluated, and each principle has three questions that can be scored from 1-10. The score range is then between 30-300. Bellow 100 is a dead no. Between 100- 200 requires more research and inspection. Anything over 200 can be a billion dollar blockchain business case, the closer to 300 the better.
parties who have worked with each other a long time, hence very clear and trusted processes are in place to enable multiple well-known parties to access the same dataset Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Types of companies greater than 25? Market sizes of largest company type less than 5X smallest? Dataset equally important to each company type? TOTAL 3-30
Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Types of companies greater than 10? Amount of times per day is greater than 12?
Some parties have views/perspectives that other parties don’t have? TOTAL 3-30
derived aggregates changes with every new record. For example, the price of a stock, each new record is important as it tells the most recent price. While a derived aggregate such as average price over a period of time can be useful, its secondary. Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 New records can be added daily? When a new record is added, the aggregate derived is very important? Over 50% of the participants need to know about the new aggregate derived after a new record is written? TOTAL 3-30
with each other
blockchain use cases, as the behavior of each party is already aligned to good data. Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 There can be private and public sector involved?
There are large existing intermediaries? Less that 50% of the parties share a common stated and agreed goal/outcome? TOTAL 3-30
to another
rules, or industry regulations and they need to be applied uniformly to each writing party; not left up to interpretation. Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Over 50% of rules have changed in 10 years? Regulations are different from country to country? There is financial incentive to be gained by some parties to break the rules? TOTAL 3-30
participants
perspectives on what a record should be are unresolved. When conflicts cannot go unresolved before the next record can be written, you have a good blockchain use case. Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Conflicts in records can happen hourly? Conflicts must be resolved within 24 hours?
When conflicts occur, there is not single person that can resolve it? TOTAL 3-30
frequently, or infrequently. The more infrequently the rules change, the better blockchain use case you have. Frequent changes in rules can be coded in smart contracts, however this can create unnecessary overhead when compared to a centralized database, as the rules are deployed into the distributed network as well. Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Rules are clear, published and agreed on by over 80% of parties? Rules are changed usually by government/regulatory trigger? When rules do change, they are variables to a formula, not the formula itself? TOTAL 3-30
that, when a single control entity or function is entrusted with the sanctity of important data, the imbalance in power usually breathes fraud Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 A single entity has the power to cripple an entire
the network?
Multiple single entities/intermediaries currently exist? When the single entity fails, there is material the history
must be preserved/rebuilt? TOTAL 3-30
contracts and well document processes to maintain the sanctity of a dataset, when this is not the case, it can get very difficult and a blockchain can help Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 The size of the network is larger than 100
There are human “endpoints” considered to be in the network in addition to
The network size can vary up
TOTAL 3-30
participant can be a complex and burdensome overhead to manage. Blockchains uses the method of public and private keys to facilitate this at scale Unlikely ß------------------------------------------------------------------à likely 1 2 3 4 5 6 7 8 9 10 Over 50% of companies, would want over 50% of the data kept private?
There is a need to issue, manage, and revoke the permission of organizations
access to private data? The public data is important to all organizations and human end points, and should be in real time? TOTAL 3-30
Author
[RE] Richie Etwaru Patron Saint of Trusted Commerce | Blockchain Futurist | Adjunct Professor | Serial Entrepreneur
Richie Etwaru (born January 2, 1976) is an American business executive, author, global keynote speaker, adjunct professor and patent holder who specializes in the next era of commerce termed “Trusted Commerce”. He has held c-level roles at Fortune 500 companies for two decades, and serves as advisor to venture capitalists, startups, governments, academia, and large organizations on transitioning to Trust Companies. Richie’s book Blockchain Trust Companies, Every Company is at Risk of Being Disrupted by a Trusted Version of Itself (2017) is used by universities, consulting organizations, and governments, and his TEDx talk Blockchain Massively Simplified has been viewed almost 1 million times. li: linkedin.com/in/richieetwaru/ t: @richieetwaru e: retwaru@gmail.com