Blockchain in the (Trad-Fi) Insurance Industry w/ Brendan Picha (RiskStream Collaborative)

Transcript

[Music] thank you hello and welcome back to the strangewater podcast thank you so much for joining us for another great conversation a few days ago I was listening to a crypto news show when I heard one of the guests say it is hard to overstate just how much of a bubble crypto Twitter is that comment really spoke to me not only because I think it really captures some of the incredibly myopic and sometimes extremist views that we take for granted but also because I often find myself lost in the same Echo chamber

so taking that comment as a prompt I decided to call up on an old friend for my time at Anheuser-Busch Brendan pika and although that was long before I had any interest or understanding of crypto you'll hear that he was already advocating hard for Bitcoin and digital currency at the world's largest Beer Company in 2013. after leaving Anheuser-Busch Brendan moved on to Liberty Mutual the insurance company to continue with corporate Innovation and blockchain evangelism today Brandon is one of the senior

leaders of the institute's risk stream collaborative the wrist stream collaborative is a non-profit organization that sits between the world's largest insurance companies to educate build products and integrate blockchain based Solutions today's conversation is about Reaching Across filter bubbles if for no other reason than to gain perspective on what we are building for me understanding how the insurance industry thinks about the purpose of blockchain or the challenges of implementing Cutting Edge technology and even collaboration across a competitive

industry answers a lot of the questions that we on crypto Twitter rarely think to ask but what I found most interesting was how Brendan and really the insurance industry view what they are building as completely separate from ethereum despite using similar Technologies and so in this conversation I give him my pitch on how it's all part of the same story that ethereum is inevitable one more thing before we begin please do not take Financial advice from this or any other podcast ethereum will change the world one day

but you can easily lose all of your money in the process all right let's get started Brendan thank you so much for joining us nice to be here thanks for inviting me Rex no man of course and um as we'll obviously get to over the next hour like this one's special for me man because like this is a relationship that existed like long before like but probably before I knew what crypto was but like definitely before I thought crypto was relevant and so um I think in this like industry we're well and we'll talk about in a second but on my side of the industry where we're all like kind of brought together through

like the magic of the Internet it's um you get different conversations when you talk to like adults that have like been in the trenches together for you know real real business for sure cool man so I guess with that is like a good little preface like would you uh can we start this conversation off by just like giving a little bit about like who you are and um you know not necessarily where you're at today but like how did you originally find blockchain in the first place yeah um so I'd have to go back to 2010 um there was a website and actually I think it still exists uh Slash dot dot org have you ever heard of it it was kind of a very I remember slash dot is it is slashed out the same as yeah okay yeah it's it's it's I don't know if it's

still a popular website or not but um I used to go on there every day and just kind of read what the latest and greatest was on Tech it's very you know a tech focused nerd Centric and uh the the title of post was the most dangerous project in the world of course who's not going to read that clickbaity title right I was like this is super interesting so I started reading it and it was about Bitcoin and it was about the Satoshi Nakamoto and whatever and a link to the white paper and I read the white paper and I'm just like you know that's just one of those moments that a lot of people have had in the early days of crypto and Bitcoin which is like oh my God the implications for this are scary and fascinating and and I want to learn more so

that's when it first kind of dropped on my radar and then I just kind of like you know didn't really pay much attention to it over time like it kept on seeing more and more things in the news about Bitcoin and and crypto and Bitcoin ATMs and you know different things people were trying to do with it and so um after business school um in 2013 we worked for Anheuser-Busch inbev together and we were hired right around the same time and that's when I started mining Bitcoin so at the time the best hardware you could get with for these Asics and uh the speed of the Aztec was 333 megahertz per second which was pretty good for the time I got them off of eBay somewhere or something like that and and I set up multiple Rigs and was mining and I was a part of a pool

a mining pool and uh it was just depositing into my you know at the time I didn't have a separate wallet set up so I just deposited straight into the exchange which you're not allowed to do anymore but that's what I was doing then it was fine then and uh and that was fantastic that's how I kind of got into it and started you know really kind of diving in just figuring out how this this stuff was working and and at the time like coinbase was still very new um and so people could either in order to get Bitcoin they could go to an exchange and buy it or they could mine it and uh and a lot of people just still didn't know how to get it if they weren't mining it because the exchange wasn't really that prevalent but uh yeah then I said you know there's

an opportunity here for the Enterprise and uh you know the the company should really be looking at this you know who knows what it could lead to um and at the time you know there was a lot of hype that was being generated around Bitcoin and crypto and and unfortunately for more nefarious reasons like Silk Road and stuff like that but um but I actually um partnered with Budweiser well at anheuser-buschinbev and we did this little um you know Budweiser made in America pre-party event where if anybody who registered for that event this one was I think in in Utah somewhere um they could also register for a coinbase account and if they did they'd get ten dollars worth of bitcoin that they can then use towards the purchase of a Budweiser at the event do you remember that no dude I for sure do and

I'm just trying to jump in here because like I think this is a conversation worth like picking apart um because so just like for for brief context for our uh back for our viewers um Brandon and I met again in 2013 I think we started with in the same month or two months at Anheuser-Busch in this like brand new Technology Innovation group and I was immediately taking it under the wing of I think it was one of Brendan's peers I I'm younger and more Junior than him and so um I was immediately working on these like like internet of things like putting accelerometers into top handles that kind of stuff but Brendan like I so vividly remember at the time was like already Bitcoin pilled and I remember going to your apartment and seeing like

your um your Bitcoin Farms I mean like I literally have a picture of it that I snuck while you weren't looking to like show all my like Stanford's best friends like well look this guy's mining Bitcoin and now I look at that picture and like cry myself to sleep at night but um I guess like like just if you so so the activation that you're talking about is essentially like we created these like you working with external uh technology Partners created these vending machines that would accept Bitcoin and then separately created this like promotional thing with coinbase where if you sign up during this event and I think the event was a concert right so like if you sign up during the concert you get the ten dollars that is supposed to be used for beer so it's like sign up for this get a free beer

right so with that being like That was supposed to be the pilot to show like the company that like uh you know Bitcoin or digital currency could be like an important uh technology for the business and like spoiler alert like I think you did the pilot and like nobody would ever talk to anyone about Bitcoin ever again until like The nft Craze of like 2021 right exactly yeah it wasn't um you know this is how Innovation goes oftentimes you know people who are um you know exploring emerging Technologies and want to do something with it and and sometimes do it's not um relevant for like another 10 years you know you're just you're just so ahead of the curve that it doesn't

mean anything to anybody right but there's potential there and you get and you want to do something about it and you want to help the organization you know embrace it in some way or at least explore it and start to you know be aware of it um so there was I can't remember what the numbers were but there was a subset of individuals who who registered for the event and registered for a coinbase account they received that 10 worth of bitcoin and they were only like three or four people who use the Bitcoin at the event to buy a Budweiser and I think the event was around the the attendance was around 2000 people so it wasn't a very big one um but uh that said a few things to me it said that you know either a people just want to keep the Bitcoin because

hey Bitcoin and B um at the time in order to purchase something with Bitcoin you'd have to present your QR code have it scanned in the attraction that was new for people like that you know that was a totally new thing and it was a little confusing you had to have the coin account on your your smartphone and you know so it was a new user Behavior type of thing that just yeah so but it was a great experimentation and you know if you look at ABM Bev I can't remember how long ago this was maybe like two or three years ago you know they started jumping on the the blockchain crypto nft bandwagon if you remember all the stuff that came out about that you know yeah and honestly look man like let's let's not kid ourselves like the stuff they're doing

now is not has nothing to do with blockchain they're literally just like jumping on a fad that happens to be in our space and like throw you know again my when I was Director of Finance for Bud Light my yearly marketing budget was uh how many like over a billion dollars so like you know they they see something go viral they're they're gonna do it like that's just how big Brands work but I guess like to drill in on this like you introduce this company that is like I believe one of the most like perfect examples for like the power of crypto just in terms of like multinational um like cross-border like you know super super Capital efficient like super low cash balances and yet like when you

introduce this technology to them in 2014 like literally the message to you I remember I was there was like Brendan shut the [ __ ] up um and so like I guess like my question to you now that like you know as much as I like probably was contributing to that now I'm like holy [ __ ] I was wrong and I wish I was listening like what is your take away from that experience was it like companies need to like be more Forward Thinking or is it that like it doesn't matter how good the technology is like if the world's not ready for it it's not it doesn't matter like we're just kind of fall on that experience well um having worked in Innovation for multiple Fortune 500 companies I know that no matter how good a solution is

even if the business case is solid and you're saving millions of dollars making millions of dollars if the if senior leadership isn't bought into it it's not going anywhere and if um and when I say senior leadership I mean senior leadership of both you know the organization overall and also the function that you're trying to help um so if they're not if they're not sold into it then it's just it's not going to go anywhere and this is actually a problem for um a lot of innovators out there it's just you know you you'll put the business model together you'll create a proof of concept you'll run a pilot you'll you'll prove that it's viable and you'll you'll pitch that and still it's like well we don't really want to disrupt the business right like we have our current operating procedure

we have our you know and and any small um if you move a small lever in one of those business processes it could equate to millions of dollars in costs or millions of dollars in profit depending on if it's a top line or bottom line type of approach but little differences in that process makes a big big difference especially when you're interacting with millions of customers or clients um so there's a big hesitancy to change process um especially if the process is new hasn't been totally proven out um so it's just one of the many challenges of being an innovator in in Corporate America and I guess um you know I I like there's no real generic takeaways you can like walk away with right I mean I guess it depends on

like the company and like the industry that that company is or something but I mean like if I just made you like King Brendan of all CEOs like and you just like had an opportunity to change the way American Business was done like do you think that we're too conservative or do you think that like the innovators might actually be like a little too aggressive and like the conservatism in the CEOs has a point it's okay it's on a case-by-case basis you'll see some organizations that are all over Innovation the CEO is is you know is making sure that his people are feeling fast that it's okay to fail that you've got to try new things you gotta get out there and you've got to have a budget for it in order to try these things other companies they you know they have a budget for Innovation maybe they have

a small group or a function and they want them to go off and kind of explore new things and test the waters but at the end of the day they're more conservative and they don't really want to disrupt the business or change it for the better um so it's all different flavors you know um it just depends on the appetite the budget you know what kind of impact it might have and and um you know whether you uh you're interested in exploring new and different approach to business for sure I don't know this this uh conversation is probably a dead end and like unless you specifically want to talk about Anheuser-Busch and I think like their problems are much more about the culture War than it is about technology right now anyway so um all right so we like uh our career is like split off in like

2015-ish um and then I know that like just to like kind of fast forward through background so you found yourself first in the insurance industry like believing still in this technology and evangelizing blockchain and then eventually you found your way to the rift Collective which is where you are today so you know just uh can you like help us uh understand that journey and then like what are uh yeah what are just like the key important parts we should know as we enter this yeah no I you know throughout my journey I've always tried to bring blockchain into the Enterprise in some way and so um I worked in the same function but different industry so Innovations for insurance and um there was a brainstorming session one day um how we could use blockchain for for

personal insurance specifically personal Auto and I came up with the the subrogation idea and um basically carriers are um are sending billions of dollars uh to each other on a claim by claim basis or sometimes even a line item basis in a claim and so they're in some cases literally printing a check or writing a check putting it in the mail and sending it out um other processes involve you know like a central bank or a Clearinghouse that is managing some of that for them but they're still doing it on a claim by Claim by basis and sometimes on a line on item basis so the overhead for this is very expensive so what if you just batch to settle you know so what if um you know Liberty Mutual and Geico decided every month we're going to

settle up then we're going to put everything all those claims all those line items into one and either I'm going to owe you something or you're going to owe me something and we'll be we'll be done with it and it'll be we'll be square so basically we built um a a proof of concept using a private ethereum Network and put a little front end in front of a UI and uh and shopped it around to various carriers um you know State Farm Allstate maybe even USAA I can't remember um and they all thought it was a really really cool idea um and so much so that um eventually uh State Farm and USA would go on to build their own subrogation application together but at the time I was liaising with um with wrist stream which you

reference which is the insurance industry's largest non-profit blockchain Consortium and uh I was working I was in the working group for um wrist stream on subrogation because we had as Liberty Mutual we had given over the idea and the concept to restroom to carry forward and the reason we did that is because even though we showed this to other carriers nobody wanted to work with us because we were competitors and so it wasn't going to go anywhere it's a network-based technology you got to work collaboratively on it and any one carrier can you know bring an idea and own the idea and expect people to to work with them on it um and so that was brought forward within restream worked on for a while and um and eventually um there was an opening there um and they wanted me to come over as their

head of product to start you know working on basically more Insurance ideas on blockchain for the industry and not just one carrier um so I did that for a couple years um and prior actually at Liberty it wasn't just the subrogation stuff that I worked on but also um worked on digital Auto tiling so putting um basically um it was before nfts but basically putting an auto title on to like inside of an ethereum smart contract Auto like automobile uh sorry yeah automobile right yeah auto insurance yeah um so basically putting the identity the vehicle onto a smart contract this was a 2016-2017 and um also there was one another idea that

we were working on um for homeowners insurance and being able to um you know not only have the property title on blockchain or on a smart contract but also also the entire history of anything that happened with the home so if repairs updates um and so this was an implication for title insurance so when you buy a home you have to get Title Insurance making sure that the title uh is uh the record that it's it is supposed to be before transfers ownership to the new owner so there were a lot of implications for for insurance um and so then went over to restroom as their head of product for a couple years stood up the product management function uh and uh you know worked on exploring a bunch of different opportunities across

different product lines for the insurance industry using using blockchain so commercial personal um we're now working on some stuff for Inland Marine some stuff for parametric insurance for homeowners so there's a lot of different applications out there cool so okay just a couple um like clarification questions so first and foremost dum dum here subject subjugation is essentially settlement but for insurance right mm-hmm and burst got it clear

um and then so okay what you're saying is first when you're at liberty you were in this Innovation role and you were saying like Okay like here's a ton of different like interesting applications like we can put auto titles on there we can do like home repairs and home titles on there we can like do all this like crazy stuff and one idea is we can do like essentially I'll say it for my audience we will do settlement right and like the that actually became like super interesting like um because it sounds like there's a lot of business problems behind it but the problem with somebody like Liberty Mutual being like hey why don't you just like trust us to like keep track of everything and then at the end of the

month like we'll tell you how much money you uh owe us or we'll let you know we owe you money but like we'll see yeah you can see the problems with that right yeah it's a trust problem right and for like what is the product of like blockchain it is block space but like that's a little esoteric for this conversation like the product of blockchain is block space that is credibly neutral right and so like it is like if you know anything about the point of crypto like it totally makes sense that um that this like I do this is what it's for but I guess my question to you is like before we talk about your time at wrist stream like why was that the idea that Liberty Mutual saw like Merit in

and decided to like see if there was like interest in as opposed to like any of the other ideas that like to me make just as much sense for insurance to start looking into blockchain I mean why do we focus on subrogation to start yeah yeah as opposed to titling as opposed to like repair tracking as opposed to like any of the other things that um it was a share it was a sheer opportunity of potentially reducing the cost associated with that and the number was very large um so out of everything that we looked at that at first blush subrogations can make a really good opportunity got it and so when you're like shopping around this prototype that you made um at Liberty Mutual before it's like third party credibly neutral Youth and it's it's this like kind of skin on top of a sounds like probably like the JP

Morgan like now it's called Onyx at some point it was Quorum right but like it was the um it's like a skin behind that like when you're talking to like let's say Geico like are you shelling them on like what blockchain is and like what proof of like steak is and how like any of these consensus algorithm works or is this really about like subjugation sucks this is a subjugation platform yeah that's what you need to know probably both they know that subrogation sucks in that it's a big cost driver um so I would say that the conversation opens with you know obviously this is a this is a subrogation application this is why we're doing it this is what we think the potential is for it and because we're working with other

carriers you know we know what the debits and credits are with that particular carrier is in relationship to Liberty Mutual um so we know it's a problem for them as well um but then you know if they're not up to speed on blockchain and at the time many people weren't um we would have to go into the nuances in the technicality of why this was important why this is trustless why it'll work um and why it won't cost very much to run it so you get into the business case modeling a little bit deeper especially when you're talking to people and trying to ask them to work with you on on watching this product yeah well and I really like we'll move on with the narrative but I really just like want to hover over this point of like okay okay you can approach building companies or

products in blockchain like from two ways one that this can be a blockchain company and like you do something on the blockchain right or you can have a chain company where you do something on the blockchain right and I think um the further away you get from crypto Twitter the further away you get from djens like the more it becomes about like what are you actually trying to do here and why and less about like hey we have like included these features that are like really trendy right now and like not really thinking further than like everyone else is locking their tokens we should not block tokens right right um yeah I think first and foremost it's

it's the utility of what the product can do regardless what the technology is forget about the technology forget about how the black box works just say this can do X and to this degree and if that degree is enough then it's going to Peak people's interests um I think at the end of the day when it comes to Enterprise blockchain and blockchain's just going to be another type of back-end infrastructure for for organizations to use and leverage and and work together on I think most notably it's you know network based so you're going to have collaborators typically um which is kind of how you know we're set up we've got this canopy Network and every member on the network has a node and the applications that they're using interface with those nodes over the canopy Network to communicate with each other and share data

um so any if you're looking across the insurance industry any opportunity where um there's a high volume of transactions and where multiple parties are sharing data that's always a good opportunity for blockchain yeah it makes a lot of sense and like the way you just phrase it right now made this this thought pop into my head but like as you're selling to people who don't give a [ __ ] about tokens and about like technology like the way to kind of frame this is like look today you have your stuff on the cloud right like you don't really think about what it is it's like the Amazon Cloud the Google Cloud the Azure cloud like they're all the same to you but like maybe in the future like they're not the same and like the difference is is like you have the credibly neutral crowd cloud or you have

the company cloud and like different people will opt into that for different reasons like that's not a judgment thing I just think that when you use the cloud today like you don't think about the technology you don't even think about the companies you just think about the cloud right right I think I think one of the bigger or one of the additional concerns there is is security and where am I where's my data being housed is it on premise or is it in the cloud somewhere and if it is in the cloud somewhere where are those servers located hopefully you know in our situation they're in the United States but if they're in other countries we're going to need to you know do a thorough security analysis on that and see what the risks are and and how much risk we can tolerate um so you know I think the cloud is a

good comparison because it's um it's pretty similar however with uh you know if you are truly using something that's decentralized like you know ethereum if you will um you know the it's not gonna the question of where does the server exist that question doesn't exist it doesn't it doesn't work with right because it's everywhere it's all over the place um and I don't think companies are are okay with that like they wouldn't put claim data on ethereum right they wouldn't they would have to keep that house somewhere so um there's different risks tolerances based upon whatever technology it is you're using and and I think the furthest the most I've seen in terms of insurance companies being okay with data being on in a decentralized

infrastructure it's like you know oracle data weather data uh stuff they can use for a smart contract parametric type insurance that kind of thing um and I also think maybe um driving um conditions right I have seen some instances where um cars are reporting driving conditions if there's a pothole or something or if it's uh slippery and aggregating that data in Mass so the insurance company can say all right you know you've just logged into Google Maps you need to go from point A to point B there are three ways you can go to point A to point B yeah um a has numerous potholes and it could affect your car uh B is uh is wet there's a main break so you need to avoid that c is the safest route and as our insurance company we recommend you

take uh route C even though it might be a little bit longer than a you know something like that so you can lower your risk uh in terms of um you know your insurance premiums and costs and lost costs and stuff like that by uh you know getting clever and recommending safer routes to travel or something like that yeah I mean that's like a super cool um concept that I've like never like pondered um yeah and like I definitely hear you how the insurance industry is not comfortable with the idea I mean God if I if I like actually sit down and try to explain like what ethereum is and like where it is like then you get into like well it's called ethereum because it's everywhere and it's nowhere and like you know it does get like real meta

real quick but um yeah I I do wonder how much changes just like because of the technology capabilities of ZK cryptography and if we can like make products that guarantee that like stuff that gets stored on chain is not accessible like maybe that changes um changes like calculus is on the insurance side but in the meantime like yeah at the very least like it is a totally like incredible powerful technology just to do the financial settlement of it of um like you can you can do all the invoicing you can do all of the claims you can do all the legal stuff off chain and then once everyone agrees you just like pop it into the system and like I don't know how much

you had to deal with like the real International wire system but like when I moved over to finance and Anheuser-Busch I did and like dude it's a [ __ ] nightmare like no moving money it's unbelievable did you see the recent news about fed now yeah I mean I could for I the the most interesting thing I saw on that is that apparently it's based off of a forka of avalanche which like blew my mind yeah that I read it in one article so take that with the greatness but um yeah I mean Canada has interact right so I think they're probably trying to do something very similar it's creating a massive Clearinghouse for everybody to use which is a threat to PayPal and venmo those companies right like see you later if if fed down takes off yeah well and I've I've talked to a few people about

um we'll talk a lot of people about crypto but like some of the more interesting takes is that like crypto and ethereum are like not necessarily a threat to the financial world like it they that they're a partner and like they may grow together but like a lot of people are not looking at ethereum threat to tradify what they're looking at is like a huge threat to Offshore finance and uh yeah because like the whole point of offshore Finance is like how do we use like sleight of hand to like make things happen in the like within the realm of tradfi and like well crypto is essentially doing is like we can just do that with a button right right yeah I can see how that might be an issue for sure yeah and so um I don't know I mean I think uh like

those are fun questions to ponder but um they they basically result in like whatever your prior biases already are and then a story you feel around around that so whatever um anyway going back to insurance so um let's transition you over from Liberty Mutual to um the wrist stream Collective and like on that change my biggest question for you is like look you're moving from a like principal actor in that space to a um again like what is supposed to be a credibly neutral one and like the the good part about that is that you can talk to all these people like um on the same field and they like they they you know whatever like all the trust implications of that right the bad

part of that is like you're no longer a player right like you no longer it's one thing to like talk about like Innovation budgets and like product management budgets but like you don't have like the billions of dollars of funds that need to be cleared every day to like make like you're not a customer anymore and so like I I would love if you could just talk a little bit about like how the frame of innovation changes when you go from these like Inc larger institutions than the world has ever known ever um in a tiny little Innovation nugget into that to like this space where you have like a lot more intellectual freedom and an intellectual weight but like infinitely less

um Financial or maybe even real world weight yeah yeah it's a good question well um I would start by saying the our parent organization the institutes they've been around for over a hundred years they're very well respected in the industry um they have very deep networks in the industry a lot of um uh CEOs of various uh insurance carriers are on the board for the institutes um so the Institute has a lot of clout despite the fact that it's not the one that's playing on the network right it's not it doesn't have the billions of dollars that you know to transact with um but um you know we have found that um you know this non-biased entity is needed to facilitate the collaborators

on the network because they can't trust one another and so they need somebody that they can trust that's neutral who can facilitate and explore these Technologies with them together um so it's just you know the the I guess the power dynamics change from um you know being someone who is in need of managing this process us more efficiently to being a company that says you know hey let us help you try and figure out how to do this collaboratively and together so it's just a different a different Channel I guess if that makes sense no it makes a lot of sense and I wonder do you have any Reflections on the state of the insurance industry and like what you just said is essentially like you have

all these like massive goliaths that are like so competitive and so Cutthroat that like they need a third party facilitator in order to function do you do you see that as like a symptom of like where Corporate America or corporate Global like the world is and maybe like because insurance is so old and experienced they figured this out or do you think that there's something like especially like hostile and weird about insurance that requires like like literally an adult to come in um no I think it's like just about with any other industry I mean the beer industry is hugely competitive massively competitive it's it's a basically if you're in the beer industry you're in a

sales marketing and entertainment industry right like that's function that's what you do um so I just think you know whenever you have a a very very old and very saturated Market you're going to get high levels of competition and uh whenever you have lots of competition there's low trust um and I I think it's just as simple as that I I don't think um you know the insurance industry is also very regulated so you've got to be very careful about how and what you do uh and and make sure there's no you know Clues around pricing or anything like that because um you know the The Regulators are looking out for the uh the end user the consumer and making sure that everything by the rules the regulator is looking out for no one at all except for

themselves if something goes wrong so that's a different conversation but um I do think yeah like the reason why sorry to cut you off dude but do you see the ruling in the Ripple case yeah I mean I I mean like I'm guess I'm happy but it's just like more like chaos you know and and so you know whatever I I don't know I don't know how to take away from that other than like I've been in the crypto industry for like three years now and very often I've woken up to like World shattering news it's just like nice to like wake up one day experience that and then be like wait did the world just shatter in a good way [Laughter] so yeah I um

yeah anyway back to our conversation like I very much like I think that the reason why we don't see this in most Industries is because like it the temptation to collude and to like monopolize and to like do like all the bad stuff that you do when you have like Market concentration is like there and it's like particularly sketchy if you have like a coordinating body but I wonder if like what's specific about insurance like look in the beer industry like we had the beer Institute right but like that was literally a lobbying group that was nothing about coordination that was just about lobbying and like I wonder if the reason that we never had a coordination group in the way that the insurance industry does is because like insurance is by nature like a

collaborative thing like the whole point of it is we're all pooling our money together to like absorb risk and so maybe there's something profound about like insurance doesn't work unless like money can flow or something I don't but then why doesn't anything work well I mean so I the insurance industry it's really the first digital project or a product right it's it's a promise you know it's it's you pay you adverse virtual product yeah and you pay me x amount per month and if your ship ever sinks I'll be sure to uh to re you know reimburse you for it um but Malta you know oftentimes these contracts are multi-party um you know with Surety bonds there's there's often three or more players that

need to coordinate on a contract with Auto claims I mean depending upon how many different cars get into an accident what if it's a multi pileup there could be 10 or more insurance companies that need to coordinate on you know the claims payouts um you know property insurance sometimes they're layered sometimes you have five or six companies on a commercial property um and then you've got reinsurance right and Border row reporting there's there's multiple players that need to collaborate on on whatever reporting so um anytime when there's a product that requires collaboration in any way that's that's going to require some sort of need to facilitate that collaboration and coordinate and make sure you get from you know um I you know multiple parties that have

ideas about how they want to do business together to a finalized contract and and you know having that be a done deal yeah maybe there's something about like if there's a zero-sum business transaction that is like required for the industry to function like maybe you need to have mediating like ties between them like for example like if we never bought like excess aluminum from Miller Coors like the industry would be fine you know you know yeah because I can't think of in the beer industry I mean other than the fact that the US has a weird setup where it's like manufactured a distributor to Consumer like there's no need for really Anheuser-Busch and Bev to coordinate with Lagunitas or um or Miller or you know it's just like there's no

there's no need there um and if there's no need there then you know I don't I don't know if blockchain would have any implications there or not I mean the only thing I can think about is in um you know shipping and Logistics right if uh if a truck is you know has just dropped off a major um major uh truckload of beer to the distributor and it needs to go back to the manufacturing facility and it's empty right like maybe there is some place where it could pick up some cargo somewhere kind of like an Uber type of thing um and that could be blockchain based you know where you need to coordinate with external parties or something like that but yeah but for the most part it doesn't seem like the industry is um is um you know hinged on on coordinating with your competitors yeah

yeah I mean I'm like a huge boat like I one of the like the biggest reasons I'm like here in this basis because I was in like Anheuser-Busch finance and I realized like oh like oh my God like Finance is just like old and slow and stupid right and I've told this story on this pod before so sorry audience but for you you'll appreciate this even more so um in 2017 I believe was it was the year after Anheuser-Busch inbev had bought Modelo but we had to divest the U.S operations and so that divestment resulted in like it was more than a billion I think it was 1.7 billion dollar tax bill and so I as the treasury manager was like the one responsible for

getting that money to the like federal government and so one day when we're gonna send it CFO walks up behind me puts his chair behind me goes hey next next I am going to sit here until the wire clears and I'm like okay it's like like that started like the why you know the banks open at like 8 30 so he sat up behind me at like eight because we were in New York right and at 3 30 the wire cleared and like every like 30 to 45 minutes the CFO would like tap on my shoulder and be like hex hex where is it and I'll be like I don't know and be like you can't say that like go figure out where it is so I pick up my phone call Bank of America and they and I'd be like hey like CFO is asking where's the

money and they'd be like literally we just told you this the way it works is you push the button the money goes to the settlement banks that have the money like it's in a black box we cannot tell you where it is like this is the like Federal wire system it will clear but like it'll clear when it clears and then I would hang up and be like it's on its way and then I would go back to like making [ __ ] up that like looking up the price of wheat on Bloomberg or like making Decks that were for like for meetings two weeks ago you know like just making up work right like I'm a huge boat that um if not like that kind of stuff just like any multinational uh organization needs to move money across borders

because like in order to pay taxes in order to pay the employees like basically like any business that touches money like which is all of them will like be like drastically drastically improved by this technology I I do think that you have like a good point on like these use cases that we look at past like money and transfer and settlement um like really do we need to like Target situations like where coordination is like essential and not like a risk of um basically like corporate takeover of the economy but um yeah can definitely use crypto right

um yeah one of the other things that's interesting too is like you know why use kind of one of these commercially available uh services to transfer money from country to Country B like a transfer wise right like why would I use that if there's crypto well you'll you'll find that in most cases depending upon the day you know if you're if you're transacting in ethereum your gas fees for that transfer might be outrageous right um and a lot of the protocols out there at least the popular ones have some sort of transfer fee that oftentimes are more expensive or is more expensive than using something like a wise to transfer funds from country to entry B you know so even though it's very fast and um it's there it exists you can use it it

still might be might be more expensive to use that over over something like just wise something a traditional type of uh you know ensure Tech or fintech type of application yeah well the one that like really blew my mind like and just like made me realize that like literally no one gives a [ __ ] about the tech except for us that have like dedicated our careers and like our personal lives and our like interests and everything to it is um sometime last year vitalik was on bankless there's another podcast but um so he made a comment where he's just like so Latin America especially like Argentina like countries devastated by inflation like you know blah blah blah

like it's horrible horrible horrible and so people are actually like using crypto there like using crypto to protect their savings and all and so he goes like whatever David or Ryan like the coast he goes can you guess the number one way that argentinians use crypto and that like they're like I don't know like metamask like like that any and the answer is that like all these argentinians and like South Americans apparently just hold balances in binance and then they transfer to other people's binance wallet so like you go to a coffee shop you'll pay from your binance wallet to their binance wallet but because it's all within binance there's no transfer fees and so like think about this man

it's like it's all the risks of crypto with none of the benefits it's all the worst parts of tradfi with none of the benefits and yet still this is how like all the people that are opting into crypto for real use cases and not like Financial speculation that's how they choose to use it like that is wild to me that's crazy that's crazy and they're all using just BNB right the binance native coin no I I mean again I didn't look into this I'm under the impression that like you know when you go into coinbase there's no you're not like on a chain you just like buy eth and then you have Ethan your account right right and they're using it like that okay gotcha yeah like they're they're buying tether and like sending tether to each other right right that's crazy that's crazy

well if it's working you know it's great yeah yeah and again like I love that story just because it blows my Minds about like how people work and why and Technology works and whatever but I think like just drawing us back into the conversation I think like it's so easy to get locked in like consensus and proof of whatever and like blockchains and like but like no one cares about technology except for the people building it and like unfortunately the people funding it right but like what people actually care about is like their day-to-day lives and or or insurance companies care about is like their day-to-day operations and like that's really what we need to be building towards like use cases

absolutely I mean yeah I mean it means it needs to be useful for the end user and if it's not then it's not it's not going anywhere it's never going to get adopted and uh not only that the utility has to be there but it has to be better than current utility right it has to be why why is this better than my current process you know if that's just if it's more the same it's also not going to get adopted it's just uh yeah I'll use this word utility to like pivot into like the last part of this conversation here because like in my crypto broken brain and like with I know who my audience is like when you hear utility like what that word means is like okay is your token just a token or like can you do something with it

on chain right and like what I know that you're saying when you say utility is like no like not like use case within like the very like stunted like like broken evm context like use case within the world like humans and people and air and food like that that kind of utility and so one of the reasons like I was so excited to have this podcast with you is because like about a month ago I invited you on to um like just kind of like a daily news stream and like that was the first moment that it hit me that like all of us on crypto Twitter who like believe in this and are pushing it forward and think that we're like The Bleeding Heart Center of crypto

like everything that we were talking about was just like not even relevant or like not even known to you who is the product manager of a real product for the largest industry on the planet using this technology and so I guess like my first just like kind of question or thought to you is like um based on like that experience and like what you know about like the more DJ inside of crypto like how would you kind of describe um like the The Divide between the the types of people that are using like private blockchains and blockchains as a technology to build products and like kind of like the djin D5 like um revolutionary Community

um so the difference between the the defy community and the people who are really in the weeds with all the D5 that's going on and the people who are kind of the general population in terms of crypto use retail I guess like this question might be too broad I guess like what I'm like trying to like hone in on is that there's like the entire world of building that um exists is like super super segregated and like the people that are working on like private blockchains and like real Enterprise applications and like like you Brendan like could change the world with blockchain like don't even touch the Venn diagram of like the people who

I'm talking to who believe that they're gonna replace JP Morgan with like a combination of like curve and Ave and so um I I guess I don't know if I have a question there but like there's something like really really remarkable to me in that yeah I think um I think this is pretty normal for um for I think traditional product functions where you have to kind of um straddle the business and the technology right you have to you don't have to be dangerous on the tech side and know how it works and and you know the processes that are involved but you also have to understand the voice of the customer and what it is that they truly need you know I don't want to be building something and spending money in

development resources on something that the end user's Never Gonna even look at right so it's really just balancing those two worlds understanding them because you have to understand them in order to balance them but making sure you um have a really good idea about what the customer truly needs and so that you can go and build the capability on the back end in order to fulfill that need because you could have an assumption that is oh well ZK is going to to solve everything well is it how you know have people adopted you know ZK um you know I understand the implications of it and what it could could do but companies are still not going to be comfortable with putting their their information on a decentralized protocol even if they're using ZK especially if that information

is PPI you know personal information or medical information so it it's just being able to accommodate your end users so that there's not enough desirability for them to want to adopt your product while also um being realistic about the expectations of the organization that you're working for and and working within you know their risk profile in order to deliver that value to the customer yeah for sure and man like everything you're saying is like literally giving me like a PTSD flashbacks to having to deal with that so I totally hear you I guess like I guess um like philosophically like when you

think of like the um the was it subjugation the the product yeah the product that you're building for risk stream that like let's fast forward to a world in like 10 years where like literally like hundreds of billions of dollars per day is flowing through the system because the entire insurance industry has like bought into it how much like in that world how much do you think like ethereum like the core ethereum protocol and then whatever is built on top of that is part of the same story of what you're building or do you think that those are just like two separate things that are happen to be using like similar technology principles

um they are separate things that are using similar principles um I'd say you know we have used Quorum in the past for some of our applications um but that's a derivation of ethereum um so I mean um yeah I mean uh I don't know I'm not sure how to answer that question uh well here let me answer how like because what I see like what I imagine if like you're building in blockchain the I believe that the inevitable conclusion is like either you're gonna realize that blockchain is like an incredibly stupid incredibly slow incredibly hostile environment and you don't need any of this trustless stuff you don't need any of this credible neutrality go to Amazon

or you're gonna realize that like what you're trying to do here is like create what I have deemed trustless Trust right and I and I think that like we are not in 10 years and 20 years whatever like there's not going to be a world where there's like a bunch of different chains that like each like have a different amount of trustless trust and like but like I believe that ethereum Thief is the asset of trustless trust and like anybody who cares about this will ultimately like derive that trustless trust from ethereum and like what that means for financial stuff is like you'll become a roll-up you'll settle to ethereum yeah um I I feel like with any new

technologies there's a lot of different players to start and then as time goes on things kind of um you know get um merged or there's consolidation you know less variability and more standardization um I don't feel like that's happening with blockchain I feel like there are so many different protocols out there and there continue to be more protocols developed um that there really isn't um kind of like a standard there isn't you know like there how there have been some standardizations in terms of how you know value transfers how um you know other kind of digital Property Transfers nfts or digital property whatever um you know there's some standard processes and protocols and and

timelines around transferring from one wallet to another but uh overall you know I feel like most organizations are going to lean towards AWS instead of trying to um you know adopt whatever standard they think there might be in the block I apologize uh whatever standard there might be in the blockchain space um I don't know I feel like there are some protocols that have risen to the top obviously ethereum being one of them Bitcoin for for Value transfer of course there's the whole side chain thing and you know um and then you know polygon um is obviously very popular

um Quorum has been popular for the Enterprise um so there are a few out there that you know hyper Ledger um that are geared towards the Enterprise and that some organizations are using um so yeah I don't know so I guess over time there is less variability and there are some some best practices there but it still feels pretty Diversified yeah no and I I think um like this is like kind of a whole different conversation about like the crypto thesis and like if you believe like in a future that has like a bunch of different independent chains that provide like different substrates on which like different kinds of applications can be built or which is like you know again that's just like not what I believe like I believe that like

we're not developing technology here so that everyone can like create their own technology like I think that what's special about Bitcoin and then Bitcoin [ __ ] it up and handed it off to ethereum is like there's something special and the special is that there's one credibly neutral space and then everything flows from that no you're just totally right yeah yeah and so like again my my long-term vision and like why I've been willing to like dedicate my career in like too much of my net worth to eth not crypto not projects not tokens not nfts but eth is because like I do believe that no matter what you're building today and what every industry is building on blockchain like the the

people are going to realize either this is a fad and we jumped on it just like we were building.com 25 years ago and we're gonna throw it away or we're gonna realize like if we care about the blockchain properties like we need to find a way to borrow that from Eve yeah no I mean eth really did set a precedent I mean I felt like blockchain was very limited to to what it could do and then youth came around and came up with a virtual computer yeah and look in 20 2015 while this was just an idea like I would not be saying this like ethereum was just like any other one back then right but like the way the world works and like it is what it like like ethereum is like the core Untouchable

protocol and then the goal like I really just believe that ethereum first is Bitcoin Bitcoin got like super political and so crazy about like what they believe money is and 21 million and blah blah blah and like gave up what what Satoshi was trying to give us which was internet native property right and money's just one part of property and like what ethereum does is like hey we're just going to give you the platform that has property and then you can build whatever you want on it and you can do whatever else yeah you know where I thought the this was going um back in 2015 you know it started with Bitcoin you know transfer value then it came you know ethereum you know virtual Computing and whatever else you know nft smart contracts

um then I thought it was going to Iota I was actually really sold on Iota it was um uh the tangle right I used a tertiary um uh tertiary protocol um and it was felis and instantaneous and I felt like the transaction fees were the main problem and that Iota was going to be successful and of course you know there were rumors about proof of stake with ethereum for a very long time and and a lot of people you know some people thought it was going to happen some people didn't and it eventually did um so you know the it's a game changer now that uh you know you don't have the excessive fees that you normally would or that you had in the past uh with ethereum today which is uh yeah no and look I think that like you're you're not

you're totally right to pick up on the fees it goes back to like two conversations ago we were just having like like no one cares about this technology like they care about the uses and it's like for me to send you a JPEG cost First of all the jpeg cost 10 grand and then sending it to you cost 200 bucks like nobody's interested in that no not at all when uh what is it um what's the the nft marketplace that open c yeah I remember Gemini did something with open C where they were you know making nfts and they just they they gave me an nft and I was like you know what am I going to do with this and so I turned around and I put it on an open C and it sold for like four hundred dollars like this makes no sense you

know like what is going on here um it's just it's you know in some cases like with um you know the artist people who uh you know did very well with the nfts I find that fascinating that there can be a place for artists to make you know their product and sell it and people can have you know exclusive ownership of that of that artwork um I find that interesting I also find the opportunity for for wrist stream we're actually using um nfts for Surety bonds um so The Surety Contracting process is all nft based and it works really well um so you know you do see it evolving from you know the original which is what I think people uh you know had thought was going to happen like yeah it's for

this really um unimpressive artwork to start um but then it's going to evolve into something more important which I think it is is happening yeah well I don't I definitely think we experience all these things in like manic waves that like produce some like inane [ __ ] right like whether it's nfts almost entirely or like on D5 right like Olympus Dao or right like any of that [ __ ] right but like what's left in the wake and it's like a violent destructive wake but what's left are these like Primitives that are actually like interesting and like you can take ERC 721 as like a concept and say like okay this is how we should represent home Deeds you know

um and so like I'm a big believer in that's just like how Innovation happens and um yeah man but but it's a I don't know I like in these moments like when we're talking about board Apes for like literally like for the for the cost of a board ape we could house a family for Gen like for perpetuity we could feed like a village for a month like I mean it's so crazy it's so crazy and like I don't know what to say other than like I don't believe in moral judgments number one like I believe things happen and like you learn what you can from them and then you move on um and two like all I can think of is like I spent my whole life like wondering how like that Dutch tulip craze could have happened like how people were like

selling their entire home for one tulip bold and like I don't wonder that anymore right what do you think you know with the Advent of AI chat CBT all that stuff that's happening right now what do you where do you think that there's there's probably going to be an intersection with AI and blockchain what what do you use what do you see happening do you do is there something that's on your radar something you're thinking about in terms of so I don't know where it's going I'll say first first like the conversation around AI right now reminds me so so much of the conversation around spying um during the Edward Snowden leaks excuse me and like I my experience of that I remember it so vividly because I

was at Stanford studying computer science at the time and I just remember when that happened my reaction being like why the [ __ ] is anyone surprised like this is how the internet works like and and like yes like the scale and this this this but like just the way people talk about like okay now that we know about this like what's gonna like that's exactly what I feel like AI is is hap is happening with AI right now and like again going back to Stanford when I was studying there in 2009 I took the intro to computer science course or sorry this is two years later my junior year I took the computer uh the probability statistics for computer scientists

course and so my teacher is a guy named mayron and he's super weird like Accenture guy but we get through the whole course and on the last day he's explaining to us like okay everything we learn we can actually use these um Bayesian probability Nets to do like really interesting things for example to us filter spam he hits the next slide pulls up on the um like thing behind us it's a paper by him in like 1996 when he was working at Google how to use Spam how to use probability to filter spam in Gmail something like that right and like so us to say is that like the way people talk about AI right now is just like hey welcome to the conversation this is how

Netflix YouTube Facebook like Amazon is how everything works right now there's just too much data for humans to understand and like suck it up like we're here you know and so to answer your original question like I don't know where Ai and blockchain intercede but I am I I've never been more confident that they will because like AI is essentially about creating like intelligence and sentience in the virtual world that has like no parameters and no guard rails and no rules and no property and like what does watching do provides a framework for all of that yeah right right and vast amounts of it right yeah and so like I I

don't I don't know where this ends up but like I can totally imagine like in the same way that um let's say like out of [ __ ] soda and uh and cans or different Technologies but like they wouldn't have happened if like they didn't come together and now they're both used for so many more different things in different containers but like that's what I see with um crypto and yeah yeah for sure um totally makes sense to me um one of the things I I see happening is um for because you if you are using the blockchain and you have these transactions going on with a blockchain and some of those transactions are

different than most okay and so it starts the AI you know enters the picture and it starts to record and monitor these patterns right and some uh you know patterns a B and C are um you know fraudulent patterns and the rest of them are normal you know common common patterns right you could have you could aggregate all of the data for a particular industry so you know in our case we're looking again at you know personal Auto claims some of those claims are fraudulent and the fraudulent claims have specific patterns that are associated with them and so if you've got this AI black box that is just sucking up all the data from all the insurance companies in the in the industry and making this massive

database of recognizable you know fraud Insurance patterns then that can be a benefit to the entire industry to be able to you know check every claim against that black box and and have it come back to you saying oh you know this is totally normal or you should probably dig a little bit deeper on this this looks a little bit suspicious you know so you know there's some implications and that's those are some of the things I'm seeing in terms of the intersection of blockchain and AI yeah for sure I mean I think this is like a great kind of thought to go out on but I was just thinking about this the other day that like AI is like first of all it's just like such a dumb name because it like puts us in the context of like are we like replacing ourselves

or creating something more or less than ourselves and like it it puts humans in this situation of like who are we and like really what this technology is is like what happened first is that like we as humans figured out how to use technology to gather data and then we realized like we don't know how to deal with this much data and so like what AI is is like how do we like find patterns in the noise and then the question like that's how I see AI I don't like care about like um you know like chat gbt turning into Skynet or I don't care like I don't know I mean it's just like those are

literally works of fiction yeah right right right no but you're totally right being able to to detect significant signals among an ocean of data is exactly what AIS is good at and we're starting to see um some interesting things happen there um I I can't remember what the article or where I saw this but some chemists were I'm trying to come up with some compounds and you know traditionally you just it's kind of trial and error and you have a database and um but they were able to kind of feed it all if it's you know they had 20 years of trial and error history data they gave it to the AI and it came up with like three of the compounds they were looking for or something like that you know you start hearing about this stuff all the time what's great is you can

like you can download you know a local version of say chat gbt you feed it all your data and then just start asking it questions and you'll you'll be able to you know pick up those patterns which is just you know it's kind of mind-blowing yeah well actually I've got a suggestion for you and for the audience if you're interested um Ezra Klein uh New York Times like I don't know journalist but he has a podcast called the Ezra Klein show and he just had the head of Google's AI like they have a new like company um that Google it's like a holy home subsidiary but essentially he came on and explained all of the drug stuff that you're talking about and like how yeah so super good just came out like last week um I will make sure to send that to

you Brandon directly and then put in the show notes for this but um man like I just every single day I wake up more excited about like technology and like the capabilities of um like what what we're going to be able to do and like what's happening and um the reality is it's like it's inevitable ethereum is inevitable AI is inevitable all this is inevitable and like I encourage all of you like if you're Doom scrolling like get off the news nobody knows what they're talking about like the people writing these articles have no idea the investors writing these thought pieces have no idea like stop thinking about like what could go wrong and start thinking about why people are building this exactly yeah yeah there's

a lot of ethical concerns right now around uh around Ai and for good reason but I think you know the people who are on the sidelines having the ethical discussions um are probably going to be left in the Dust by the people who are out in the field who are actually doing things with AI and moving that forward maturing the technology and figuring ways figuring out ways to use it in both beneficial the various ways I would say did you you couldn't be more correct and like yeah the the people who are going to write the story are out there doing it not like trying to debate about it and if anybody wants to debate I would I'm not willing to debate crypto or AI until we debate Healthcare like things that matter yeah there you go perfect all right Brendan thank you so much this

is an honor and a pleasure um before I let you go can you just shout out like uh any socials that you're on or any any thing you want to shout out yeah yeah no thanks for having me on the show I really appreciate it if uh if you need to get in touch I'm on LinkedIn um I don't really use Twitter I don't use thread I don't use blue sky um so linkedin's kind of my primary I go to yeah I used to use Twitter like that's where my name came from but I uh don't anymore because it's like a right-wing like scam scam Fest so apparently they're calling it calling it X now so uh or what that's worth whatever anyway Brendan I'll see you in the real world we'll have a real beer like that's how business is done that's what friends are

doing exactly thanks Rex I'll talk to you soon have a good one you too bye-bye thank you