What are among the most interesting contemporary projects in Blockchain for you, and why?
I’m personally fascinated by the opportunities to tackle really big, like society-scale, problems. So the projects geared towards reinventing health care, reimagining government tax systems, provisioning digital identity - these are areas I find particularly interesting. I also have a passion-project of trying to help people understand the data quality problem – it doesn’t matter how amazing your protocol is if you are putting bad data into it. I talk about this in Basic Blockchain as well.
How do you expect the blockchain industry will change in 2020? Any predictions?
I expect in 2020 some of the weaker projects and protocols will fade away. At the same time, people are still dreaming big – I am personally aware of new efforts just getting started now that would culminate in billion dollar or multi-billion-dollar token offerings, so despite the numerous proclamations in the press of us being “past peak blockchain”, the innovative executives and innovative financiers continue to explore the potential.
The pronouncements of doom and gloom remind me a bit of the period after the dotcom bubble crashed: journalists and pundits were proudly proclaiming that the internet was “dead”, that Netflix was bound for bankruptcy, that Amazon would never make money. Anyone who listened to them missed out on investing in Facebook or Uber, or making massive returns in the public markets. Amazon’s stock price hit around $8 a share in April of 2002. It’s now trading close to $1,900 a share.
Even 3 years ago, Square’s IPO was deemed by the pundits to be a “flop” and the end of the unicorns. If you had ignored them and invested in Square two months after its IPO, you would have made 720% in the past 3 years. It’s like Nate Silver describes in The Signal and the Noise: experts are usually wrong, and experts who appear on CNBC are more wrong than most.
What I do think will happen is that the “laws of gravity” will begin to apply – people will begin to need to show mature management and real business models. Remember that the average age of successful startup founders is 45, not 25.
You write about the financial institutional and infrastructural impact.. What are the implications for the payments and paytech industry with blockchain?
Payments has historically been one of the least efficient areas of finance and a major profit center not only for banks but for remittance providers like Western Union. It’s a natural use case for blockchain, with many layers of intermediaries, high costs, a need for trust between parties, and a requirement for a transparent and immutable record of the transaction transferring ownership of the funds – settlement and clearing (otherwise you risk issues like the “double spend” problem).
We’ve already seen blockchain facilitating tremendous progress in terms of reducing cost – cross border remittance fees have trended from 12-15% in some countries in the developing world to less than 1%. As with many other areas, we are only at the beginning of the cycle: it still costs me $25 to $50 to wire money from my small business bank account to my vendors if I want it to get there same day versus in three days, and I don’t have a $0.25 option for fast international transfers offered by my bank. A 10 minute or even 2 hour delay is nothing to me in that context if it means I can definitely have my money transferred securely and safely the same day, for less than $1.
There’s still plenty of open space for entrepreneurs to help solve money transfer using blockchain.
How do you see the blockchain industry transforming over the next decade? Where should we go now with blockchain?
Blockchain needs to work smoothly with other technologies, like AI or big data/analytics, and it needs to show clear applicability to pressing business and societal problems. We also need to work out the performance limitations that hold us back from using blockchain at massive scale for areas like digital identity. And we need to be prepared for the Quantum Shift, when quantum computing itself bridges into commercial reality – this will break existing cryptography and security, and we will need to rebuild everything. Better to be prepared for when it comes, whether it’s next year or 10 years from now.
In the future we won’t talk about a “blockchain company” very much, any more than we today talk about an “Oracle company”. It will become integrated into many different kinds of technology solutions.
Inviting us for a safari through the wild jungles and the wild west of distributed ledgers and actual you go as far as predicting or a distributed Societies do you agree with some thought leaders calling blockchain the 4th industrial revolution and why.. 1st industrial evolution….
I’m obsessed with the question of how we integrate technology and society. I don’t welcome our new robot overlords, because I believe we have the choice to create machine systems that work harmoniously with human society rather than creating a dystopic Wall-E future where robots have replaced people. In that context, I look at blockchain, particularly as it converges with other technologies like AI. Blockchain/AI hybrid systems can be used to unlock human potential, even the potential of groups of humans, what we call “collective intelligence.” We’ve already used this capability to predict future events very accurately, like the closing price of a major stock exchange several weeks in advance during a volatile period, and we’re just scratching the surface. It’s an exciting idea, that we can unlock the potential of our whole society through application of blockchain and AI.
Keep it with CryptoDaily as Part 3 of this interview will be out tomorrow!