Discover blockchain - WA state thought leader discussion

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

“Every inefficiency in a system will
be removed (by technology)
sooner or later.”
Mark Mueller-Eberstein & Adgetec Corporation

What differentiates
Winners from Losers?
Low IT Capability Maturity HIGH IT Capability Maturity

“Top Companies in 2007”

“….. And where they are in 2016”

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

Of the 7 billion people in the world…
7
6
5
4
3
2
1
0
Cell phonesToothbrushes
Unitsinbillions

But only 20%
(1.4B) have
currently
access to
the banking
system

At least $1.7 trillion in “inefficiencies”
up for grabs…
The Economist, 2014

And that is only the banking
system…
Think any kind of transaction and
related services…

… 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
 …

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.”

“Innovation requires
learning through mistakes”
“Technology decisions
are driven by
business requirements”
How leading business prioritize:

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.

Blockchain Technology
 Blockchains: Public / Open “Private”
 Some
Blockchains:
 Some
Crypto
Currencies: Mark Mueller-
Eberstein &
Adgetec
Corporation

Networking….
Old school
computing and
business
Changed computing and
business over the last 20 years

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

Many commercial or government
services are basically “databases”
that are centrally owned and
managed.

Transactions
are recorded
in a “Ledger”

Central
Control
=
Central
Point of
Failure

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

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"

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

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

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

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

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

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.

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

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.

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?

THANK YOU!
 MarkME@adgetec.com
 Twitter: MarkMEberstein
 US +1 855.423.4383
The Innovation Economy Research Institute
CEO of Adgetec Corporation
Bestselling Author
WeChat: MarkMEberstein

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