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Discover blockchain - WA state thought leader discussion

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Discover Blockchain - “what it is” and how Everything could be different
Opening Keynote for the Washington State Department of Commerce and Perkins Coie Blockchain event, (Seattle, August 2016)
Connecting innovation leaders: At a time when companies face new challenges in data management and security, Blockchain is emerging as a way to let companies make and verify transactions on a network instantaneously without a central authority. Today, more than 40 top financial institutions and a growing number of government institutions and firms across industries are experimenting with distributed ledger technology as a secure and transparent way to digitally track the ownership of assets and manage records, a move that could speed up transactions and cut costs while lowering the risk of fraud.

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Discover blockchain - WA state thought leader discussion

  1. 1. Discover Blockchain “WHAT IT IS” AND HOW EVERYTHING COULD BE DIFFERENT Mark Mueller-Eberstein Rutgers University The Innovation Economy Institute CEO of Adgetec Corporation @MarkMEberstein WeChat: MarkMEberstein
  2. 2. “Every inefficiency in a system will be removed (by technology) sooner or later.” Mark Mueller-Eberstein Mark Mueller-Eberstein & Adgetec Corporation
  3. 3. Mark Mueller-Eberstein & Adgetec Corporation What differentiates Winners from Losers? Low IT Capability Maturity HIGH IT Capability Maturity Mark Mueller-Eberstein & Adgetec Corporation
  4. 4. Mark Mueller-Eberstein & Adgetec Corporation “Top Companies in 2007” Low IT Capability Maturity HIGH IT Capability Maturity
  5. 5. Mark Mueller-Eberstein & Adgetec Corporation “….. And where they are in 2016” Low IT Capability Maturity HIGH IT Capability Maturity
  6. 6. The trick is being open to changing your mind, and more importantly, knowing when to do so. George Bernard Shaw “Those who cannot change their minds cannot change anything." ©Mark Mueller-Eberstein & Adgetec Corporation
  7. 7. Of the 7 billion people in the world… 7 6 5 4 3 2 1 0 Cell phonesToothbrushes Unitsinbillions Mark Mueller-Eberstein & Adgetec Corporation
  8. 8. But only 20% (1.4B) have currently access to the banking system Mark Mueller-Eberstein & Adgetec Corporation
  9. 9. At least $1.7 trillion in “inefficiencies” up for grabs… The Economist, 2014
  10. 10. And that is only the banking system… Think any kind of transaction and related services… Mark Mueller-Eberstein & Adgetec Corporation
  11. 11. … for example….  Records of estates  Records of shares  Any financial transaction  Voting  Domain control (DNS)  Central Trust (“Escrow”) for any kind of deals  Messaging (“signed and unchangeable”)  IP management  … Mark Mueller-Eberstein & Adgetec Corporation
  12. 12. The more you learn, the more opportunity you will see. Nobody knew in early 1990s what the Internet was or would lead to. Milton Friedman: “Eventually, there will be a digital value system beyond the nation state.” Mark Mueller-Eberstein & Adgetec Corporation
  13. 13. “Innovation requires learning through mistakes” “Technology decisions are driven by business requirements” How leading business prioritize: Mark Mueller-Eberstein & Adgetec Corporation
  14. 14. Blockchain  Blockchain is like the Internet (it changed everything)  The implications for traditional financial services are massive  The end of banks?  The end of central banks?  Big implications for regulators. Mark Mueller-Eberstein & Adgetec Corporation
  15. 15. Blockchain Technology  Blockchains: Public / Open “Private”  Some Blockchains:  Some Crypto Currencies: Mark Mueller- Eberstein & Adgetec Corporation
  16. 16. Blockchain – in 2 minutes
  17. 17. The “technical stuff”…
  18. 18. Networking…. Old school computing and business Changed computing and business over the last 20 years Mark Mueller-Eberstein & Adgetec Corporation
  19. 19. Peer-to-Peer (P2P) Networking is everywhere P2P (structured & Unstructured) File Sharing •Napster •BitTorrent Media •Spotify •Popcorntime •PPLive (TV) Marketplaces •BitCoin •“Sharing Economy” Cryptography Storage & Search •Minerva Project Communication •Skype •Google Talk •I M Mobile •WeChat •WhatsApp •Line Messaging as Payment E-Commerce •E-Bay •AirBnB •Uber Defense •DARPA High Performance Computing •Grid Computing •HIVE •SETI@home Analytics techniques exchange •Chinook Mark Mueller-Eberstein & Adgetec Corporation
  20. 20. Many commercial or government services are basically “databases” that are centrally owned and managed. Mark Mueller-Eberstein & Adgetec Corporation
  21. 21. Transactions are recorded in a “Ledger” Mark Mueller-Eberstein & Adgetec Corporation
  22. 22. Central Control = Central Point of Failure Mark Mueller-Eberstein & Adgetec Corporation
  23. 23. Blockchain technology allows a distributed ledger vs. a centrally managed ledger. All transactions within a block are recorded and visible. And can never be changed (“Immutable”). Blockchain without a “token” is just a database Mark Mueller-Eberstein & Adgetec Corporation
  24. 24. Benefits of Blockchain secured distributed leger vs. central ledger  Information can be put on block chain and can never be changed  Worldwide ledger: IP, land titles, art,...  Full transparency for every transaction  "Record every information forever" Mark Mueller-Eberstein & Adgetec Corporation
  25. 25. Bitcoin vs. Blockchain  Bitcoin is (currently the best know) usage of blockchain technology  One of many digital currencies using blockchain technology  Many more uses for blockchain technology other than “currency”  Why digital currency is used?  No need to use exchange (e.g. banks) for people who know/use Bitcoin  Direct exchange between individuals is possible Mark Mueller-Eberstein & Adgetec Corporation
  26. 26. Bitcoin basics  Insider: "It feels like when we first developed the Internet"  It is a way to transfer value in the Internet  Bitcoin can not be copied. First "scarce" digital asset.  Bitcoin protocol (blockchain) is final piece of Internet puzzle  Very early and experimental stage  As longer as Bitcoin exists, the stronger it gets  60% of all Bitcoin mining done in China (up from 40% 8 months ago)  New block created every ten minutes Mark Mueller-Eberstein & Adgetec Corporation
  27. 27. How “real” is Bitcoin? ... Most virtual believe might be "love" Virtual goods are as real as people believe in them... There is very little “real money”. Most are “0s””1s” on some bank’s database Mark Mueller-Eberstein & Adgetec Corporation
  28. 28. How “real” is blockchain?  Goldman-Sachs invest $500+ Million  Microsoft declares “blockchain” as one of the key “must win” workloads for their Azure platform and business (and announced collaboration with many US banks)  Some governments invest into developing their own “local” blockchains Mark Mueller-Eberstein & Adgetec Corporation
  29. 29. Understanding change ©Mark Mueller-Eberstein & Adgetec Mark Mueller-Eberstein & Adgetec Corporation
  30. 30. is scary Change
  31. 31. have emotions People
  32. 32. Is constant Uncertainty
  33. 33. Endings Exploration New Beginnings Reconciliation Reorientation Recommitment Denial Anxiety Shock Fear Anger Frustration Confusion Stress Creativity Approach-Avoidance Skepticism Acceptance Impatience Hope Energy Enthusiasm Productivity Morale Theory of Transition Schlossberg; 1981 & 1995 Mark Mueller-Eberstein & Adgetec Corporation
  34. 34. Regulations and restrictions? From an economist perspective: Every restriction (and forced inefficiency) comes with a cost. Lets be clear who carries the cost and if that is in the best interest of an economy and society. Mark Mueller-Eberstein & Adgetec Corporation
  35. 35. Security?  Distributed ledgers and Blockchain technology create unparalleled opportunities, paradigm shifts and risk.  (Some) Risks areas: technology, business, society and government  Cyber-currency and cyber-technology go hand-in- hand as the internet evolves. Topics that will need to be covered include:  Basics of Blockchain technology and its application in business and government scenarios  Security and trust models in Blockchain(s) and the applications using blockchains  Community and government approaches  Learning from spectacular security breaches (e.g. DAO (Ethereum); Mt. Gox (Bitcoin))  Security through resilience and agility Mark Mueller-Eberstein & Adgetec Corporation
  36. 36. Blockchains are here.  Our Opportunity! 1.Change will be fundamental on business, technology, processes, structures and people. 2.Technology leaders are positioned to drive and realize the vision and image of the future. Mark Mueller-Eberstein & Adgetec Corporation
  37. 37. Question to ponder….  Where in our current and future business can distributed databases/ledgers provide a competitive advantage?  How would we position, defend and communicate such an advantage?  Build our own blockchain or leverage somebody else’s?  Are we engaging with the most innovative players in the ecosystem?  How can we improve agility, innovation potential, national and international partnerships?  How do we understand, assess and manage risks?  How do we think about blockchains issued/controlled by “others”— communities, commercial organizations, financial institutions, governments?  How does blockchain technology and entering the (money) transfer business impact relationships to customers, banking (partners), governments, regulatory institutions? Mark Mueller-Eberstein & Adgetec Corporation
  38. 38. THANK YOU!  MarkME@adgetec.com  Twitter: MarkMEberstein  US +1 855.423.4383 Mark Mueller-Eberstein The Innovation Economy Research Institute CEO of Adgetec Corporation Bestselling Author WeChat: MarkMEberstein Mark Mueller-Eberstein & Adgetec Corporation

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