Event Recording

Sebastien Meunier - From Exploration to Implementation – Preparing for the Next Steps of Blockchain

Name: Sebastien Meunier - From Exploration to Implementation – Preparing for the Next Steps of Blockchain
Uploaded: 2016-05-22T12:00:00+02:00
Duration: 21 min 37 s
Description: Blockchain technology is certainly at the peak of the hype cycle. In this keynote, Sebastien will give you the keys to understand the reality of blockchain beyond the myths and anticipate the next steps.

Sebastien Meunier

Management Consultant

Chappuis Halder & Co.

Posted on May 22, 2016

Video Description

Blockchain technology is certainly at the peak of the hype cycle. In this keynote, Sebastien will give you the keys to understand the reality of blockchain beyond the myths and anticipate the next steps.

Show Transcript

Thank you very much. Thank you. Good morning, everyone. So in this presentation, I'm going to provide an overview of the current state of the blockchain technology and how it, how it will evolve, how it might evolve and how to prepare for the next steps from a business perspective. So I guess everyone, as all of you know, Bitcoin was created and went live at the beginning of 2009 and it has grown very successfully since.

So let, let me ask you a series of questions. Who, who in this room owns Bitcoins today? Please raise your hands higher. Higher. I can see any so very few people. Okay. So actually, so it's, I was going to ask how many of you have actually used Bitcoin to buy actual products and services, please, again, raise your hands.

I mean, not just trading really buy services. We have one, one person, anyone else?

Okay, interesting. So now Bitcoin, the valuation of Bitcoin is pretty much 7 billion, but at the beginning, at the end of 2014, people started to focus on the, on the underlying technology, the blockchain, and it has been a very hot topic in 2015 and, and, and currently, so the interesting question is will the hype disappear? Will it deliver it? Its promises. People are very divided on the technology.

So this, these are actual headlines from newspapers articles. So some people believe, you know, blockchain can change everything, pretty much everything, you know, disrupt disruptors, you know, solve child poverty. And it could even have saved layman brothers. And by the way, it can also make coffee. And of course, some people are more, you know, cautious about the technology and they don't think it can do pretty much beyond the current Bitcoin blockchain. So now let's have a closer look at where we stand. So very brief reminder.

So the Bitcoin blockchain is a very powerful system because it allows it's a public and permissionless system. It means that anyone can access to the history of transaction. Anyone can participate in the network, but at the same times it is secure. So it was designed for one purpose to avoid, to solve a double spending problem and to allow peer-to-peer exchanges of Bitcoins. And for this purpose, it's pretty strong, but it is, it is also a trust system because it, it ensures the trust between participants and without the need of intermediaries.

So that's really the breakthrough and the, the, the interesting feature. So beyond the Bitcoin blockchain, the, the ecosystem has expanded. So now you have, of course, so alternative cryptocurrencies, many of them, they were designed to overcome some limitations of the Bitcoin. So for instance, they use different consensus protocol. They use different infl inflationary models, or they can, they allow to store more data on chain, but actually none of them has been, has become, I mean, a serious competitor to Bitcoin so far.

Then you have some specialized networks that are built for specific use cases or mostly payments such as ripple, ripple is quite successful. And so, you know, and it's actually having a lot of business, you know, in a, in a growth settlement, FX re maintenance, stellar is also a network offering payment services. And of course you have also Ethereum, which allow to, you know, to, to smart contract capabilities. So smart contract is an automated, you know, it's, it's an automated program. Every node in the network will execute, you know, the, the clauses of the, of the contract automatically.

So it will it's, it allows to enforce contracts on the chain. So it's, and it allows you to build distributed applications. And then you have also the private distributed ledgers here. We're talking about frameworks toolkits that you can use to build your own blockchain, basically the most famous ones or block areas, chain that you have many, many, many toolkits that allowed to do. So. Another way to look at the, the blockchain ecosystem or distributed ledger technology is to have like this stack view.

So from bottom to top blockchain technology, you know, it's based on building blocks actually. So that allow you to build, you know, to, to, to, to, to implement how the network, how the nodes in the network communicate together, how to settle transactions, the consensus protocol, how to manage assets And how to implement the business logic.

So some, some providers offer the full stack and some services can be used on top of other services. So for instance, we can Woodstock is, is built, is designed to, to allow smart contracts on a Bitcoin blockchain and some applications, and you, and then on top of that, you can have distributed applications such as, you know, travel, which, which offers KYC service on the blockchain. Then you have the, the toolkits are just talked about it, that that are more like, you know, bricks that you can use to build either your own network, or you can offer services on top of existing networks.

And some technology providers such as micro Microsoft or Amazon quite recently offer social services integrated in their cloud. So as, as we, as we see the ecosystem is becoming more and more complex. And one of the key topic that were discussed last week at consensus in New York was the standardization, how the different layers communicate together, how the different protocols can interact.

And, and again, the community is quite divided. Some people think we should define standards approach to foster adoption and to allow developers to work in, to work in a more efficient way. But some people also think that it's too early and we have to let, like, you know, like we say, a thousand blockchain blossom and that later the most successful implementations will be the, will become the standards. And actually what I think what I think or so is it's, for some cases, actually, you don't need a tech, you know, you don't need a technology standard, you need a business standard.

Sometimes for instance, in financial industry, for some, you know, securities, you don't even have a standard way to describe security. So how you can build, you know, a technology solution, if you don't even have a business standard.

So that's, that's, that's quite a hot topic. So the system, the ecosystem is complex and actually we don't really know what will be the end game. We could have, you know, competing networks in the future, pretty much the same as we have today. So different various public rails that with different features and private ledgers that can connect to the public ledgers as required. We can imagine also another scenario where the ecosystem will be driven by standards.

So for instance, in the financial industry, we could have like a network to manage payments, one for, to manage the transfer of securities and another one for identity, another one for, for, to think about health, to manage the health data and services, et cetera. And we could also have like a universal, just one public chain that would be, you know, if we imagine that we have, it would be a layer on top of the T C P I P you know, internet protocol.

And that would be kind of, you know, a new internet where every node in the network, instead of just routing the information can also process the information, store the information. So that would be like computing network. That would be, that would be pretty powerful.

I think, in, in the app you might have a, a poll. So I think it's interesting to get your, your view on what do you think will be the end game. So if you can just take 10 seconds to, to, to vote, that will be interesting. All right. So we don't know the end game, but of course we can try to preview the next steps. So if we say that let's say four or five years more, we will have like a mainstream, you know, or use cases and major disruption in some industries.

I think in between two to three years, we will start to see, you know, global standards emerge partnerships between businesses and technology providers, large partnerships, and the disruption of small markets. And from now to 18 months, we are currently in the phase of experimentation. So a lot of businesses are experimenting, launching, you know, proof of concepts, trying to build standards and, and some, in some, some niche innovation are emerging. So what it means from a business perspective is so first, So there's no silver bullet, right? We are still in, at, at the early stage.

So the, I mean, the key is just to, to, to be aware of what's happening, you know, to, to, to be aware of what's happening means to, to, to read the news, to, to organize market watch, just to organize trainings experiment, and by experimenting. I mean, first of all, identify relevant use cases and launch, you know, proof of concepts, collabo collaboration is key.

So you have to meet the ecosystem, meet the startups, meet the technology providers work in consortiums in work groups just to be involved in the ecosystem because then you will be ready when, when standards will emerge and when the disruption will come. So when you, you are more aware and you experiments and you collaborate, then, then you can really anticipate the change, you know, plan ahead. So because there for some, you know, the impact will be huge in terms of it, the integration into the it legacy in terms of processes, organization governance.

I mean, the blockchain technology is a technology. It's, it's, it's an enabler.

So, but the, the, the main focus should be really a business focus and it will have a huge impact on business models and organizations governance, And of course develop the strategy. So when you, when you know what's happening, when you are try to anticipate things, then you can really plan ahead and you'll define your budget, your priorities, how you're going to work to be involved in the ecosystem. Do you want to be a leader? Do you want to partner with leaders, you know, really think about if you wanna do inside or partners.

So I guess I want to emphasize the, the, the identification of use cases. So when, when all you have in mind is blockchain, everything looks like a blockchain use case. That's a famous saying from the 11th century, but it's actually pretty current.

So the, I think most of the U risk cases that you read about are not relevant, some of them are relevant, but not really disruptive. If you think about blockchain.

I mean, the key, the key feature is decentralization is a network effect. So one of the main, I mean, one of the key, one of the way to implement blockchain technologies is really to work at an industry level when you have a lot of participants that makes sense.

And then, then the disruption will be for intermediaries in this particular area. And for the participants, it will be just another way to do the same business more efficiently. You can also leverage existing public ledgers, for instance, to store you can store proofs.

I mean, proof of anything, basically on the, for instance, on the Bitcoin blockchain. And that's that's, that can be, that can be powerful because you can really store information outside the firewall in a secure way, and share this information between clients and businesses. And you can also leverage Ethereum to build distributive applications. So for this, you know, it could, it can go from an announcement to existing services, to really more disruptive, you know, use services.

You can really create, think of new, new, new services such as, you know, the dis distributed autonomous organization. One, you know, this, there was a crowdfunding just quite recently, and they were quite successful.

So I mean, many, many startups are thinking about how to build, you know, new, new businesses, new services in a decentralized way. And then if you think about implementing a blockchain at a group level, I, I think for most of the use cases, doesn't make sense.

Of course, it, you can use it to, to bring efficiency, you know, to have less reconciliation, you know, one ledger share between between different entities worldwide. That's true. It can bring efficiency, but probably you could do, you could do it with another technology. So I think some use cases maybe still might make sense, but really have to think.

I mean, you really have to think about it. So the, I mean, the ways to, to work with distributed leisure, internal experimentations, that can be very tricky because you need the skillset. So it's difficult to build the skills from inside. And actually, so one of my clients, they really, they really, they, so they had a budget and two developers were really building their skills, practicing on the technology. But as soon as they, they were mastering the technology, they, they, they just resigned.

So that's difficult to build the, the skillset, unless you have a, really the budget and the scale. I mean the size.

So if you, you have a lot of budget and you can have a large team, you can do it before small organization. It can be very difficult market watch, okay. To sponsor, you know, accelerators, like I said, to be involved in ecosystem, meet startups, meet technology providers, meet developers that can help participate to, to work groups, strategic investments, of course.

So, but then you really need to be, I mean, aware of what's happening to invest, of course, in the, in, in the right technology and the partnerships, that can be a good way to partner with startups, to partner with a tech technology provider, but then it can be very tricky also. So I have to really think about the business complementary, you know, the, the risks share risks, share the incentives. So maybe it's good to start first with proof of concept and, you know, build step by step, build a partnership step by step. So final thoughts.

It's still early days for the blockchain technology, the key topics of standardization, identity management. Also, it was like very, very hot topic also in the, at consensus last week. I didn't deep dive the identity part in this presentation because we will have some workshops, you know, in depth workshops in the afternoon, but it's definitely a hot topic. And of course, legal and compliance issues. How do you enforce the digital contract?

What, what is the liability of a decentralized organization? Many, many, many legal issues have to, to, to, to think about, again, blockchain technology technology is an enabler. So you really have to have a, you really need to have a business perspective, be aware of what's happening, identify, use cases, experiment, and then you can either disrupt your industry or you can be prepared when disruption is coming. Thank you very much. Excellent overview. Thank you so much.

Nevertheless, there's one important question, probably also interesting for all participants that have been put into the question section, could you please put up the questions, please? Do you, as an expert, understand the blockchain algorithm and explain why it is secure? Actually, actually I'm a consultant, so I have an engineer background. So I have like a basic understanding of the algorithm, but I won't pretend I am an expert. So I have a basic understanding of, you know, the private keys, public keys, how it works, but I trust, you know, yesterday we had an interesting presentation.

Yeah. I trust experts. So I'm yeah. I trust experts in cryptography in the math experts. Okay. That's fair enough for sake of time. I think we cannot go to the other questions, but we have the poll. Could you maybe, also please put up the poor results? Okay. What do you think the end game will be? Most of the people actually think competing networks. Interesting. Interesting. Little bit.

And So, yeah, maybe different networks rather than just one network. Yeah. Yeah. That's I think that's a consensus actually in the, in the, in the, in the community right now.

So, but let's see. Okay. Thank you very much again. Thank you.

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Sebastien Meunier - From Exploration to Implementation – Preparing for the Next Steps of Blockchain