State of Enterprise Blockchain

Transcript

[Music] foreign [Music] I think we're going to get started here so congrats to everyone who made it here 10 a.m after probably a long night last night I see some friends maybe with bags under their eyes but they're here which is great before I get started I was curious how many people in the audience have a strong interest or background in Enterprise blockchain I'm just sort of curious about that okay a couple of hands well hopefully this talk will have

something for everyone so just a little bit about my background it was actually fun I put this talk together just for ECC I've been in the space for about eight years now originally was at IBM helped launch the first blockchain as a service in the industry the first open source contribution that was geared towards Enterprise and helped um work with the Linux foundation and hyperledger and now I've come full circle with some contributions there with some other projects and started collido actually was one of the early consensus Venture Studio invents Investments so a lot of old friends here um in Paris for each CC

and got to the privilege of starting collido with some awesome co-founders so what I wanted to talk about today it was just a chance to reflect the Journey of Enterprise blockchain it's early beginning some lessons learned and then really from that first generation what's happening out with the second generation of projects and then how um we could take some of those lessons as we're crossing the chasm technology wise so really thinking about it going back you know it seems like we've been in the space for about eight years um 2015 there were a number of different projects and initiatives all happening realizing that enterprises this we're looking at the technologies that were

being developed in blockchain they're really interesting with privacy and some other considerations um you know they were looking at how they could enter the space and do some meaningful work one lesson from the Gen 1 approach uh you know when it takes an average of three to five years to get one use case to Market 30 to 50 million dollars uh you know hundreds of thousands of lines of custom code that you're writing just for that project it's really hard to get to a return on investment for that for businesses and for some of us it was pretty clear from the early days that it you know if these become huge Consulting projects that just take a very long time in the life cycle of a company you know

it's all about are you really driving value for your users um and is is there some that value being expressed by some sort of return on the investment that the companies are making so uh actually this is one of my my favorite memes disaster girl but um it sort of for me reflects a little bit of what was going on with the Gen 1 approach I mean just very long drawn out projects again tens and tens of millions of dollars if you look at Australian stock exchange during the FTX collapse I guess they decided it was good timing for some of these projects to come out of the Woodworks because they thought it was almost a rounding error on what was happening in that space and uh but you know ASX wrote off 250 million dollars

was a seven year project and I'd say you know the others were in the range I was talking about previously more of the three to five year variety so uh you know where where are they now some some of those projects didn't make it one thing to keep in mind with any transformative technology organizational change experts say that 70 of organizational change initiatives fail and has a lot to do with people and processes much more so than the Tech and a lot of times you need something like a burning platform to affect change so um you know as you keep in mind some of the macroeconomic factors you know there's been a lot of Articles and you can people debating both sides of it I'd say

gen 1 approach is dead Gen 2 lives on and as you look at macroeconomic factors like covid where the world had to digitize overnight immediately you know that burning platform really did you know take place and we see that even the most conservative Industries like health care and insurance had to realize you know our Brokers can't sit in an office pushing paper they they need to work from home how are we going to transform overnight so one thing I like to think about in the blockchain space is amaro's law so we tend to overestimate the effect of technology in the short run and underestimate it in the long run so this is the sentiment behind this slowly then suddenly type sentiment

um you you'll hear sometimes on LinkedIn or other comments and generally you know it trans translates to about 10 years of in the overestimating phase and then the next 10 years you're underestimating so as I was reflecting being you know eight years in really feels like we're starting to see that inflection point happening and as you just turn on the news read the paper you know just daily affirmations by you know the largest companies if you look at BlackRock number one assets under management I think 10 10 trillion saying that you know Finance is being revolutionized people are talking about their tokenization of everything this is

all the way from you know finance companies to all sorts of companies um you know in the industrial space whether you're looking at you know mining companies or you know supply chain um Healthcare retail Etc so you know what Enterprises Pro are looking at today and projects kicking off you know are really quite quite across the Gambit now I think in the early days people looked a lot at multi-party consortia but now there's a lot of value in individual company can can realize just by adopting some of those Technologies for their own initiatives better way to reach their customers new products and services as well as working better with their partners and relationships in the

industry so um one thing I showed the disaster girl meme it turns out she uh I didn't I didn't realize this she actually grew up pretty close to where I live and she was a college student at UNC which is five minutes from my house uh University of North Carolina so she ended up when she was in college selling the photo as a meme and then got a half a million dollars for it and use that to help pay her student loans so I think this is a great example of um you know Technology's evolving it ends up being used in all sorts of different ways and you have um uh what we're finding used in certain aspects then it really disseminating

more into popular culture so with Gen 2 blockchain what's really important is you know is there business value or you know is the use case even makes sense I'd say in the early days a lot of times with the new technology you can have uh the dynamic of hammer looking for a nail which uh obviously isn't the right way to go about it you know can you get time to value is that in days or weeks birth is months or years and then all sorts of different ways Enterprises now are um really bringing in technology into their use cases you know they might start on a zero gas or low gas chain but then really looking for being able to

move those assets to the public space depending on on the use case for example gaming companies if millions of in-game assets you know they want to do that on a chain that's a low gas or no gas but some of those assets will be valuable you can move them to another game in their portfolio or even to an open Exchange areas like decentralized identity is something that we're really seeing become quite popular as well so um in the early days as I mentioned a lot of the use cases were about B2B and sharing data between multiple participants in industry but we've really seen a lot of b2c use cases so new products new Services new ways to connect with your customers and then

just whole new business models where um you know in one case I'll show you the slide that a healthcare a group of healthcare companies are saying you know we're all collecting the same data let's use a tokenized incentive basically an Enterprise stable coin that off words to Fiat to align everyone doing the right thing in this network around contributing the clean data that we all agree to and the people who want to subscribe to the data need to pay for it so if you look at waves in in the broader space I mean obviously we started with crypto one use case D5 tenzie's cases we're really moving into wave three now where there's thousands of use cases and of course all the corresponding technologies that enable

that as I mentioned you know you're really looking at the digital transformation that all the companies worldwide had to had to look at very closely with covid and we saw a very strong acceleration of about a decade you know the lots of examples of just are the masks genuine you know where's the toilet paper was a big Topic in the U.S testing kits Etc that really exposed a lot of the issues in ecosystems and we really do see a lot of these new digital ecosystems emerging I want to throw a couple examples in I'll go through really quickly but just this Gen 2 approach so last summer Swift I mean I mentioned the Australian stock exchange example which was seven years

in the huge write-off Swift um was looking at all the different country and ecosystems doing Central Bank digital currency work and said you know we'd like to bring everyone together and see is there a way we can help um really as a Gateway and a connector between these different ecosystems so in the Gen 1 approach this would have been a three to five year project in Gen 2 approach you know in a matter of a developer Sprint you know they had stood up a product stack um the cbdc infrastructure fully compliant stock 2 type 2 ISO 27k all of that and central banks you know the most highly regulated space were able to onboard and actually focus on business

use cases and how would they interact you know PVP DVP and other types of models so I think that's a really great example of just being able to move quickly and in the case of cbdc's you know the answer is not going to be discovered overnight so you need to work together as an ecosystem and you need to focus on the real business experimentation and not spend years just trying to get the plumbing going Australia did a very similar step forward with a research institute to dfcrc and they actually have 15 different live projects all from fintechs to you know largest companies in the world like MasterCard and again the same sort of approach in a matter of

weeks being able to get the infrastructure up very quickly go through phase one phase two have they had over 100 submissions to participate chose 15 and have been live for the last four or five months um you know very large payment networks that have been in productions for a number of years in case the US the domestic ACH networks remittances payments um you know more conservative Industries like oil and gas saying here you know this here's really like technology we can work together they have you know dozen different use cases they're working on some of which are you know ESG others are more like Supply supply chain track and Chase type of use cases covantis actually is based in

Switzerland and they're in year three hundreds of companies um working on the network and then these you know these were competitors who came together and said as an industry to drive down costs and really address some issues and pain points we have we need to work together and this technology helps people who are even competitors work together in in the in the way that can accomplish that Healthcare this is the use case I was mentioning they've been in live for a number of years and using tokenized incentives to drive the right behaviors insurance this particular Consortium has um dozen plus projects as well just recently announced parametric Insurance um

was live in production with our ball as well in the last couple weeks and then of course across consumer edtech the classic supply chain track and Trace so I just wanted to throw some examples in just you know if I'm saying we're in Gen 2 so you actually see you know companies are doing this I looked over the agenda and there's a lot of talks with a lot of names of of different projects and companies I'm sure you'll see that so once some of these companies are collaborative efforts have their first or second use case how do you how do you scale it could be complex because there's a lot of different layers across the app and infrastructure sometimes companies talk about working with 17

different vendors you know open source communities different product Stacks so I really need a One-Stop shop more of a plug and play approach blockchain could be five to ten percent of the solution you need all the other layers as well now there's a lot of Open Source hyperledger Firefly has has a million lines of code it's apache2 open to anyone a lot of the projects I mentioned are all using this and this is part of the acceleration developers can also web 2 developers can just access this with restful apis you don't need to have deep web3 skills although you can do the native RPC calls as well if you'd like and then I just want to comment briefly

on the rise of app chains you know sometimes people still talk about this dichotomy between public and private and there's really a whole spectrum of chains we see Enterprises working across this whole spectrum app chains is a very interesting space I probably don't have enough time to get into it but as we cross the chasm um one thing you know everyone's been talking about for a while is that it's really the user experience that easy button so being able to onboard the early majority what does that mean it needs to have really the right the right experience needs to be bring all the application developers online and then also meet all of the requirements you need in the Enterprise space so from day one actually you know our mission to

collido was to really radically simplify adopting these new technologies this slide is from a retreat in Portugal we did with 600 plus people from consensus six years ago and it's it's still true I think it's an ethos a lot of us have in the industry just bringing more people on board with great user experiences thank you [Applause]