Uploaded byDavid Birch
Blockchains and Blockheads
This document summarizes a presentation given in Berlin from February 19-21, 2019. It states that most blockchain ideas are stupid and do not provide true benefits. Blockchains are not actually trust machines and smart contracts are misnamed. It then provides examples of potential useful blockchain applications, such as for digital asset trading where it provides a security layer. It discusses blockchain governance layers and token types/regulation. Three predictions are made: cryptomarkets will turn assets into digital money that can be traded without clearing/settlement; enterprise shared ledgers will enable new business models; and transparency will increase through techniques like zero-knowledge proofs and homomorphic encryption.
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Blockchains and Blockheads
- 1. February 19-21, 2019, Berlin February19-21, 2019, Berlin David G.W. Birch www.dgwbirch.com @dgwbirch Blockchains and Blockheads
- 2. February 19-21, 2019, Berlin Mostblockchain ideas were stupid Just saying…
- 3. February 19-21, 2019, Berlin February19-21, 2019, Berlin Most blockchain ideas were stupid • It isn’t a “truth machine” • Most of the problems described were really about data sharing • “smart” “contracts” are not • The cryptography is hard to understand and benefits are counterintuitive
- 4. February 19-21, 2019, Berlin February19-21, 2019, Berlin Example!
- 5. February 19-21, 2019, Berlin February19-21, 2019, Berlin Wait, what is a “blockchain” anyway? • McKinsey “Every piece of information is mathematically encrypted and added as a new ‘block’ to the chain of historical records”
- 6. February 19-21, 2019, Berlin February19-21, 2019, Berlin So why use a blockchain at all? As a security layer for digital asset trading
- 7. February 19-21, 2019, Berlin Tokens? Betweenthe governance and the applications, we can think of the ledger in four layers
- 8. February 19-21, 2019, Berlin February19-21, 2019, Berlin Totally Tonto Tokens? $$$ billion raised to date
- 9. February 19-21, 2019, Berlin February19-21, 2019, Berlin Token Regulation Securities tokens ICOs SEC “walks like a duck” etc Utility tokens Access to services Money tokens (FCA ”Exchange”) Claim on future products or services Liquid alternative to “traditional” equity and debt 9
- 10. February 19-21, 2019, Berlin Creatingcryptomarkets A Layered Model for Discussion
- 11. February 19-21, 2019, Berlin February19-21, 2019, Berlin Don’t Listen to Me (March 2018) 11Listen to the money
- 12. February 19-21, 2019, Berlin February19-21, 2019, Berlin Don’t Listen to Me (July 2018) Listen to the VCs
- 13. February 19-21, 2019, Berlin February19-21, 2019, Berlin Don’t Listen to Me (September 2018) 13Listen to the Winklevii
- 14. February 19-21, 2019, Berlin Don’tListen to Me (February 2019) Listen to Jamie Dimon 14
- 15. February 19-21, 2019, Berlin February19-21, 2019, Berlin Where next? Three predictions! • Cryptomarkets turning assets into “money-like” digital assets that can be traded without clearing and settlement; but also… • No clearing or settlement • Enterprise Shared Ledger (ESL) as a software category that provides a new way of doing business, and… • Zero-knowledge proofs • Open book accounting in an environment of ambient accountability. • Transparency with homomorphic encryption
- 16. February 19-21, 2019, Berlin February19-21, 2019, Berlin in the future, everyone will be famous for fifteen megabytes engage 15Mb Ltd. post 1 Armadale Road, Woking, Surrey GU21 3LB, UK call +44 1483 834631 contact dave@15Mb.ltd visit www.15Mb.ltd follow @dgwbirch comment blog.dgwbirch.com connect https://www.linkedin.com/in/dgwbirch/ order amazon.co.uk “Before Babylon, Beyond Bitcoin”
Editor's Notes
- #8 A simple way to see how shared ledgers might work in practice is to start by considering the basic building blocks of the shared ledger. These are the communications, contents, consensus and contracts layers, each of which leads to a different key driver for the use of a shared ledgers rather than a database.
- #9 A simple way to see how shared ledgers might work in practice is to start by considering the basic building blocks of the shared ledger. These are the communications, contents, consensus and contracts layers, each of which leads to a different key driver for the use of a shared ledgers rather than a database.
- #10 16 February 2018 Press release, “FINMA publishes ICO guidelines” In guidelines published today, the Swiss Financial Market Supervisory Authority FINMA sets out how it intends to apply financial market legislation in handling enquiries from ICO organisers. The guidelines also define the information FINMA requires to deal with such enquiries and the principles upon which it will base its responses, creating clarity for market participants. FINMA categorises tokens into three types, but hybrid forms are possible: Payment tokens are synonymous with cryptocurrencies and have no further functions or links to other development projects. Tokens may in some cases only develop the necessary functionality and become accepted as a means of payment over a period of time. Utility tokens are tokens which are intended to provide digital access to an application or service. Asset tokens represent assets such as participations in real physical underlyings, companies, or earnings streams, or an entitlement to dividends or interest payments. In terms of their economic function, the tokens are analogous to equities, bonds or derivatives.
- #11 But who will want to issue these new currencies? Governments? Banks? One obvious category is corporates. When Edward de Bono wrote The IBM Dollar back in 1993[1], he looked forward to a time when “the successors to Bill Gates will have put the successors to Alan Greenspan out of business”, arguing that it would be more efficient for companies to issue money than equity. Another obvious category is communities, especially with sentiments around anti-globalisation abounding. Here in London we already have the Brixton e-Pound! The Local Exchange Trading Systems (LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will merge and surge, forming a panoply of private currencies that will make trade more efficient. Why save dollars for your retirement when you can save kilowatts, hours or calories? Once we take cash out of society, the implications go far beyond economic efficiency and reduced transaction costs. Our view of money will change and, just as the people of Stuart England went from seeing money as coin to money as paper, we will go from seeing fiat currency to seeing a spectrum of currency types that seem alien right now.
- #12 But who will want to issue these new currencies? Governments? Banks? One obvious category is corporates. When Edward de Bono wrote The IBM Dollar back in 1993[1], he looked forward to a time when “the successors to Bill Gates will have put the successors to Alan Greenspan out of business”, arguing that it would be more efficient for companies to issue money than equity. Another obvious category is communities, especially with sentiments around anti-globalisation abounding. Here in London we already have the Brixton e-Pound! The Local Exchange Trading Systems (LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will merge and surge, forming a panoply of private currencies that will make trade more efficient. Why save dollars for your retirement when you can save kilowatts, hours or calories? Once we take cash out of society, the implications go far beyond economic efficiency and reduced transaction costs. Our view of money will change and, just as the people of Stuart England went from seeing money as coin to money as paper, we will go from seeing fiat currency to seeing a spectrum of currency types that seem alien right now.
- #13 But who will want to issue these new currencies? Governments? Banks? One obvious category is corporates. When Edward de Bono wrote The IBM Dollar back in 1993[1], he looked forward to a time when “the successors to Bill Gates will have put the successors to Alan Greenspan out of business”, arguing that it would be more efficient for companies to issue money than equity. Another obvious category is communities, especially with sentiments around anti-globalisation abounding. Here in London we already have the Brixton e-Pound! The Local Exchange Trading Systems (LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will merge and surge, forming a panoply of private currencies that will make trade more efficient. Why save dollars for your retirement when you can save kilowatts, hours or calories? Once we take cash out of society, the implications go far beyond economic efficiency and reduced transaction costs. Our view of money will change and, just as the people of Stuart England went from seeing money as coin to money as paper, we will go from seeing fiat currency to seeing a spectrum of currency types that seem alien right now.
- #14 But who will want to issue these new currencies? Governments? Banks? One obvious category is corporates. When Edward de Bono wrote The IBM Dollar back in 1993[1], he looked forward to a time when “the successors to Bill Gates will have put the successors to Alan Greenspan out of business”, arguing that it would be more efficient for companies to issue money than equity. Another obvious category is communities, especially with sentiments around anti-globalisation abounding. Here in London we already have the Brixton e-Pound! The Local Exchange Trading Systems (LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will merge and surge, forming a panoply of private currencies that will make trade more efficient. Why save dollars for your retirement when you can save kilowatts, hours or calories? Once we take cash out of society, the implications go far beyond economic efficiency and reduced transaction costs. Our view of money will change and, just as the people of Stuart England went from seeing money as coin to money as paper, we will go from seeing fiat currency to seeing a spectrum of currency types that seem alien right now.
- #15 But who will want to issue these new currencies? Governments? Banks? One obvious category is corporates. When Edward de Bono wrote The IBM Dollar back in 1993[1], he looked forward to a time when “the successors to Bill Gates will have put the successors to Alan Greenspan out of business”, arguing that it would be more efficient for companies to issue money than equity. Another obvious category is communities, especially with sentiments around anti-globalisation abounding. Here in London we already have the Brixton e-Pound! The Local Exchange Trading Systems (LETS) from physical communities and the platinum pieces and Facebook credits from virtual communities will merge and surge, forming a panoply of private currencies that will make trade more efficient. Why save dollars for your retirement when you can save kilowatts, hours or calories? Once we take cash out of society, the implications go far beyond economic efficiency and reduced transaction costs. Our view of money will change and, just as the people of Stuart England went from seeing money as coin to money as paper, we will go from seeing fiat currency to seeing a spectrum of currency types that seem alien right now.