 Hello, good afternoon. My name is Robert Darfia. I came here to talk about blockchain when I was told for the first time that I had to pick up the presentation at Big Data Spring about blockchain, I thought, okay, Big Data, Big Data is about a technology that helps and is data processing while maybe blockchain is the opposite. In blockchain, we use blockchain to provide security and to avoid a bad use of data and to avoid data manipulation. So I said, what can I tell these people about blockchain? So I thought, maybe I can tell them why it's so important for business. Something that is important to know is that a lot of people is talking about blockchain, it's a technology that is making a lot of noise, and it's not because of how about the IT performance, but it's because it can create new business models and a new way of exchanging data and assets between companies. And this is what I'm going to explain during the presentation. I suppose that everybody knows about Bitcoin. Okay, Bitcoin started for the very first time in 2009 as a way of sharing value between peers without the intervention of any bank or any central authority. Okay, Bitcoin, it's a currency, a digital currency, a native digital currency, and the technology that this currency is using to make all this change of value is blockchain. Blockchain is just a set of protocols that allow us to exchange data, tokens, and information between peers, making sure that the origin and the destiny of the data is known and the information of the data that is transferred has not been manipulated. Essentially, blockchain is a network of databases where every time you introduce a registry in this database, we know that the database cannot be manipulated. It's an immutable database because every register is linked cryptographically with the other one by using an algorithm. This algorithm is calculated, creates a cryptogram that is calculated using the data that we are registering, plus the algorithm that was used in the previous registry, which means that all algorithms, all these cryptograms are linked together. That's the reason why this database cannot be manipulated because if you want to manipulate one registry, you have to change the whole database. And on top of that, taking into account that this database is replicated in several places, this is almost impossible to change all the data in one of the databases because the other ones will recognize that the data has been manipulated. But this is an important thing, but what makes unique blockchain is that it can execute scripts, what we call smart contracts. One important thing, a smart contract is not a smart nor a contract. It's just a kind of workflow that you can register in the blockchain and that can be executed. The important thing is that once you introduce this workflow, you set a kind of set of triggers that has to happen in order to execute this smart contract. And this is something that has no manual integration. I mean, there is no interpretation about whether the contact has to be executed or not. Once you set the triggers that must happen, if these triggers happen, the contact will be executed. So this is an important attribute of blockchain. Talking about the technology that blockchain is using, we are not using something new or something unique. For instance, this distributed database layer is just a technology that was used in the 70s. What makes unique is the combination of the public layer, the distributed layer with the cryptography that I mentioned before. This algorithm to link all the registers together and also the asymmetric cryptography, the public and private keys that we use to sign all the transactions. This is a very standard technology that is used, for instance, in credit cards in the banking industry. But the combination of these three technologies is what makes blockchain unique. That technology. Most probably, everybody has learned about public networks. Can you raise your hand who has learned about, who knows about public networks like Bitcoin or Ethereum? Can you? Okay. This is the first application we found about blockchain. Ethereum and Bitcoin, public networks, where anybody can join this network and download the whole database and start making transactions between the different peers. The problem with this type of networks, in order to ensure that this cryptogram is not broken, we use an algorithm called proof of work. This is an algorithm that generates a cryptogram that needs to be solved, aleatory. That means that transactions, in order to be validated, can take minutes, even hours. When in the banking industry, we started to look into this technology, we thought, okay, we cannot use this type of algorithm because if we want to make a transaction, we cannot spend minutes or hours in order to get this transaction to be validated. We need something different. So people started to look into new technologies, then Ripple came into the market. Hyperledger, or now we have Core Room or Pardity as an alternative to Ethereum or Bitcoin. These are essentially similar blockchains like Ethereum, but the main difference is that they can run in what we call private networks. So networks where you can only make transactions between databases, which are certain IP address. So in order to make any transaction, you have to get an agreement with the rest of the nodes in order to be part of the network. By using this kind of private transaction, where everybody, sorry, private networks where everybody knows each other, we can use different algorithms like the consensus algorithms, which can take only a few seconds in order to validate the transaction. This was until last year. And last year, in Spain, we were very innovative, some crazy people from different banks and different companies, we started to think about, okay, can we have something different, something that being between a private and public network so that the network is controlled by a set of trusted companies, but we can open this network to everybody so anybody can join this network to make transactions. And we thought about a new type of networks, like that we called public permission networks, which are public networks where, lastly, anybody can join the network and start issuing transactions. But these transactions are validated, are registered and distributed into the network only by a few set of nodes that are controlled by trusted companies. Essentially, this network was called Alastria. Now we have more than 200 companies already involved, even governmental offices, universities. This is an experiment so far. So we don't know whether this is going to, this can be go live or not. It's an experiment, but it's opening a new way of having something in between the private networks and the full public networks. As I mentioned before, one of the things that scare me about talking here about blockchain is that it's a very immature technology. It's a very new technology. I mean, the combination of these, all these protocols. It's very promising in terms of security, we can make near real time transactions on operations, but it's very immature in terms of, for instance, data usability. One of the problems we have with blockchain is that since it's so secure, it's very difficult to manipulate data, to start data in order to make that analysis and so on. In fact, normally what we do whenever we create an application based on blockchain, next to the blockchain database, we have a MongoDB or Data Lake where we send a copy of the transactions so that the people in data analytics or in customer operations can manipulate this data and can use this data for the analysis. Another big problem, the main problem for this technology is about scalability. When we talk about private networks, most probably most of the existing technology is able to register around 30, 50 transactions per second, no more. And if we think about the payments industry, for instance, this Mastercard, they are able to process thousands of transactions in one second. So it's a big difference in the scale. So when you think about a business case or a use case for blockchain, you have to take this in mind. You can use this only if you need less than 30 transactions per second. It's important. The other big problem is about transparency. Bitcoin was born to have full transparency in the network. So everybody knew which wallet was making transactions with wallet and who are the owners of which quality is the owner of the assets. While in the banking industry, this is something that we don't like because we want customer privacy. So there are some business cases or some use cases where you cannot use a blockchain or you can use different versions of the blockchain where they achieve this privacy issue. For instance, HyperLayer is very, is very used in case you need high privacy, but in case you need a marketplace to exchange tokens, maybe something based on Ethereum, like Quorum or Parity is a better option. The only important thing talking about this technology is that the idea of this technology is to create new rails to exchange information, data and value between companies. That means that you need to create new networks and this means that you also need to create a governance model for this network in terms of SLAs regarding technology, availability of the nodes. So if one company is responsible for one node, they have to have SLAs in order to avoid the network going down every time. And also it's about how we are going to regulate any dispute or any problem in one transaction. So this type of new rails means that you need new governance models and new regalments. So far, I talk about the technology. Some people may think, OK, this technology is not so good as I expected. Why is people so interested in this technology? We are very interested in this technology because it can change the way companies interact with each other in terms of exchanging data, exchanging value and exchanging assets. Taking an example with the banking industry. In the banking industry, essentially a core banking system is just an accounting ledger where each bank registers all the money that we hold on behalf of our customers. And also the money we are lending to some customers. The problem we have is when we want to make, for instance, an international money transfer from one bank to another bank, is that the bank that is receiving the order to make the transaction doesn't know whether the bank that is originating this transaction holds the money, the assets, to cover this transaction. So that means that whenever you have to move transfer from one country to another country, to one person to another person, the person that is going to receive the money doesn't receive the money until the bank receives the money. So this takes maybe two, three days. While using blockchain technology, more or less, the idea is to have all the core banking system connected together so that whenever I start when I receive money transfer order from one bank, I can check whether this bank holds the funds to cover the transaction or not. And this applies to the banking industry, but it also may apply to many other industries, like telecom companies, for instance, when you want to migrate one mobile number from one company to another company, if both telephone companies are connected by a blockchain, they can easily check whether the customer has indeed signed a new contract with a new telephone operator just by checking the blockchain database. This can lead into a new way of economy. Imagine that this example that I explained about the banking industry be extrapolated to more sectors. So imagine that, for instance, I don't know if you know about international trade ecosystems. When a company wants to export a product to another country, it's almost a nightmare because you don't know whether the customer at the end and in the other country has the money to pay for the goods and the way around. The company that is ordering a product doesn't know whether the supplier will deliver the product. In the banking industry, we have a quite complex product, quite expensive product, which is very manual intensive, which is called the letter of credit. There is a product that guarantees that the bank of the supplier and the bank of the buyer guarantee the operation. And this is a very manual process because once the customer hires this or contacts this letter of credit, from the time the product is sold to the time the product is delivered, a lot of things may happen in the meantime. For instance, the banks before paying to the other bank we must know whether the product has arrived or not. So we have to receive a confirmation from the logistics operator. And also, whether the customer is selling one ton of oranges, we need to know whether all the oranges arrived perfectly or whether some were lost in the process. Imagine that we have a platform where the seller, the buyer, and the banks and the logistics companies share all this information in a blockchain with several contracts. Imagine we could have one smart contact between the buyer and the seller, a contact for a payment guarantee in which the bank guarantees the payment to the buyer. On the other hand, we have the contact between the seller and the buyer for the goods. And on the other hand, we have a third contract between the seller of the products and the logistics company. So when the product is delivered, the logistics company can confirm in the blockchain that the product has been delivered. Then the bank of the buyer can check that the product has been delivered and make the payment to the seller's bank. This is a new way of interacting between different companies in different sectors. There are more examples, but this is a real example of something that the banks are working right now. You will see later on one platform that we already have in production in Spain with some of our customers. Another example of how this blockchain can facilitate interaction between different companies in different sectors is in the car industry. Imagine that a car manufacturer, BMW, Mercedes, whatever, starts to register all the cars in a blockchain so that when a dealer buys some cars for the stock, this operation can be registered in the blockchain as well so that imagine that this dealer wants to get a finance for these cars he's buying for the stock. We as a bank, we can know whether this operation is real. So this company is buying some cars from the car manufacturer. And we can also know when this car is sold. So once the car is sold, we can ask this dealer to pay the whole loan that he is asking from us. And the same can apply regarding the end customer. When the end customer buys this car, we can offer that loan to this person. The car remains on the name of the bank. And once this person pays the whole car, then we transfer this ownership in the blockchain to the end person. Imagine that we also involve workshops and insurance companies in this ledger so that all the different modifications in the car, all the maintenance that this car has can be registered into the blockchain. So when the insurance and also all the accidents. So when an insurance company wants to issue a new policy to this person, they can check the history of the car. And based on the history of the car, they can put a different price or not. And also when this car is sold in the second market, in the second hand market, the new buyer of the car can check all the history of the car. And based on this, he can make a lower or higher offer to the seller. So this is an example of how a blockchain can change the way we manage the lifecycle of a car, for instance. And if we think further in time, imagine that this new way of exchanging information and value between different companies is extended to the whole world, to the whole organization, even to local governments, to all companies. So imagine that all the relationships, all the contrast between companies, in particular, and with all the regalments in the local governments, are regulated by smart contracts. In that case, there will not be a human manipulation of all the information. Everything will be less, more or less, automatized, depending on the execution of some traders, so that we can go to what we call the Distributed Autonomous Society. So that means that the whole society could be managed just by writing some smart contracts that could regulate the whole relationship between the different actors in one economy. But this is a future vision. We are very far still. But keep it in mind when you think about blockchain and how it can change the way the economy works. Coming back to the present, what we are working on regarding blockchain, we can classify the applications of blockchain in five type of applications. The first one is about value transfer. So this is, for example, Bitcoin. You can move value from one person to the other person. And I say value, no money. It could be money, or it could be something that has some value. The only important thing is around asset tokenization. We can create what we call digital twins of physical elements in the real world. We can tokenize this item. There are specific protocols that are under development right now on how to create these tokens. And you can exchange these tokens. Imagine that you want, for instance, to exchange petrol barrels or even gold. You don't need to physically move the gold from one country to another country. You just need to tokenize the gold, transfer this gold in a blockchain, and in a different country with this operation registered in the blockchain, you can turn this token into a real goal in a different country. Another application that people are working on is around digital AD. And this is what we call self-sovering IDs. Imagine that you have a public Ethereum blockchain network where anybody can register an identity. I can go and register my identity. And I can ask a trusted party, for instance, one university, a bank, a telecom company, to verify my identity. I can contact them, or even a notary. I can contact them, tell them I'm your customer. I have this ID of customer. I register this identity in the blockchain. I want you to verify that I'm this person, the place where I live. This is the way we think that digital identities will work in the future with a distributed ledger like blockchain. And for instance, if you want to make some operations like buying a house or something like that, you can do the same process. But in this case, you will ask a notary to verify your identity in the blockchain. So you can physically go to a notary and say, register this identity in the blockchain. I want you to certify that I'm the person that I claim that I am in the blockchain. So depending on the type of transactions you want to do in the blockchain, you could need different levels of authentication. So maybe from a shared authentication to an authentication made by a third company, a trusted one, like a utility company, a bank, a governmental office, or a very strong authentication made by a notary for instance. We are also working on how to apply blockchain into the internet of things. But here we have a limitation. First, I think we need to have a very strong use case for the internet of things. We need internet of things to be more used in the market. But basically, what we think that blockchain could provide two things in the IoT environment. The first one is about managing all the payments between machines. So we believe that in future, machines will pay for services to other machines, micro payments basically, and blockchain could be a cheap way of managing all these payments. And the other applications that we could have for blockchain in the internet of things is about allowing the interaction with some IoT devices. So imagine, as I mentioned before, one of the applications of blockchain is about transfer of ownership of tokens. Imagine that instead of doing a permanent transfer of ownership, we can allow people in the blockchain to interact with IoT device for certain time. Imagine that we want, for instance, or people wants to check the temperature in one specific country or in one specific city by interacting with a sensor. We can render the sensor and allow the interaction with this sensor using blockchain to allow this interaction. And the most realistic application that is why they're used today and the one that has most cases right now is about business process optimization with third parties and also information reconciliation between parties. Imagine that, for instance, we as a bank, we are financing consumer goods like TVs, like telephones. In this case, these operations are not done by us, but by a retailer, a telephone retailer, or a telephone company, or a TV retailer. In some cases, we have difficulties to match the operations that the retailer claims that he has done with the operations that we think he has done. If we use a blockchain, we can easily reconcilate all the real operations. And these days, also yesterday, it was announced by Telefonica that they plan to use blockchain in order to reconcilate all the international calls between telecom companies. So imagine that you are calling from Spain to France. So by using a blockchain, France Telecom, Telefonica, can reconcil a bit easily the duration of this conference. They know whether the money that Telefonica is claiming is real or not. What are we doing in Santander regarding blockchain? Basically, we work in four big fields of applications for, of course, payments, which is the obvious one. But we are also working in the corporate and commercial banking space because when you deliver financial products to big companies, most of these products are unique. They are not the standard and they involve a lot of manual processes and a lot of manual operations in the back office. By using blockchain, we can automatize a lot of these processes just by using a blockchain that connects the bank with the customer and with third parties involved in the operation. Since we are also a big group, we are present in many countries, we are also working together with the different banks in the different countries in applications that will help us to get efficiency among us, I mean, for instance, in terms of preventing fraud and delinquency. Just by sharing for instance information about delinquent customers or customers that we know in one country that are potential terrorists or money launders, we can exchange this information by using blockchain with all the different banks of the group. And of course, we are very active in participating in consortia and alliance. As I say before, blockchain is a network. It's a way of changing information with companies. There is no advantage of having one blockchain only for one enterprise. It's about sharing and making cooperative business models with all the different companies in the ecosystem. Some examples of the projects we have right now that are already in the news purpose. Regarding payments, international payments, we are part of the utility settlement coin which is a consortium of banks that we are working together with the British regulator in order to, and the European Central Bank, in order to create a new ecosystem of payments based on blockchain for dollars, euros, and pounds. The way it works is that either we get a credit line from the Central Bank or we deposit money in the Central Bank and in exchange we get Euro tokens, Euro dollar tokens, or pounds tokens that we can exchange in this network. By doing this, we don't need to wait until we're cleaning all the operations before paying the end customer, but we can exchange these tokens in the network so we can make money transfers in the same day instead of waiting for two or three days. This is an important improvement for the customer. The platform I mentioned before regarding a letter of credit, it's called WeTrade. WeTrade is a consortium of 14 banks. We are using this case, well, in the previous one, we are using a version of Ethereum. In this case, we are using HyperLayer from IBM. We are working with IBM in this project. We have set up a dream venture with all the 14 banks. And the idea is to facilitate a digital platform to speed up international trade between small and medium enterprises because with blockchain, we can reduce the cost of the letter of credit just by using a digital platform instead of the classical letter of credit. The other application we are working on is the one I mentioned before about sharing information about delinquent and potential fraudulent customers. In this case, we are working also with the British regulator and also with internal application within our banks to exchange this information with other British banks and also internally within our banks, as I said before. And we are now the presidents of the Ethereum Enterprise Alliance. This is a consortium of companies, IT and bank companies, mainly, that we are trying to define the specification for enterprise use of Ethereum-like blockchains. As I said before, we cannot use real or full public blockchains but private ones because of scalability problems and also because of all things about transparency and privacy for the customers. And well, this is all I had to tell you so I don't know if you have any question regarding blockchain. Any question? Don't be shy. You mentioned blockchain being used for managing digital IDs and the most useful blockchains are currently distributed ledger and public, so wouldn't keeping people's information there make it available for everybody? Yeah, for instant GDPR, no? And who would be in control of? Okay, this is a very interesting question. The idea is to register in the blockchain only all the certifications that this person has achieved. Imagine that I register my ID in the blockchain. My name will not be there. My address will not be there. But what I will have is that I have an ID, imagine XZeta302, and that this ID has been certified. The address of this ID and the identity of this ID has been certified by Santander, for instance, that he has a university degree certified by a certain university. But the actual data will not be in the blockchain, but to what we call off-chain. So if imagine that I want to get, for instance, to get a new account open with a different bank, I can ask, with an application, the new bank will check that I have my ID already checked by Santander. So I can allow Santander to provide my personal information to this new bank. And this exchange of information will not be done in the blockchain, but off-chain. So the blockchain will only regulate all the permission in to get the access to information and which information has been certified or not. Any other question? My question is related to Alastria. Which are the use cases that you plan to test in the short term? So what is the vision of Alastria in the next two or three years? OK, the first use case that Alastria is working on is ID, the digital ID. We are defining in Alastria all the requirements for this digital ID and the strongest of the ID that you need depending on the use case. For instance, if you want to register into a website, maybe you need a very weak identification. But if you want to get a new bank account, maybe you need a stronger one. And if you want to make a big operation like, for instance, buying a house or buying a car, maybe you need to go to the notary and get your ID validated by the notary. And this is the first use case. On top of that, a lot of companies are thinking about potential applications for this. For instance, I know that the MetoBaseza is working in an application to facilitate all the utilities. When someone buys a car, sorry, buys a house, to facilitate to get all the utilities for this new house by using the blockchain. Thank you. You're welcome. There's another person over there. Hello. My question is, nowadays, the banks are a source of trust. So for example, if there's a mistake on a system or there's a bug or you want to roll back a transaction that has been done or rollback a process, you can buy manually or dramatically, you can do it so. But with those technologies, how do you handle that situation in which you have to rollback a transaction? OK, is it possible? In a certain way, yes. The important thing to know is one of the properties of blockchain is that once you've registered information in the blockchain, this information remains forever. You cannot change this information in the blockchain. But what you can do is to issue another transaction that changes the information of this one. I mean, it's like adding a new registry. Imagine that you have a registry that you are sending money, $5 from A to B. But this is a mistake. You can issue a check back, saying that from B to A, you are now moving this $5, so this will reverse the transaction. So this is what you can do. But for instance, as I mentioned before, if you register any public or personal data, this data cannot be removed. So that's one of the reasons why, in order to meet with GDPR, you cannot put personal data into the blockchain. But you keep the personal data what we call off-chain. But the important thing to know is that, as you mentioned, banks are more or less a trusted party. By using blockchain, the blockchain will be the trusted party. So that will be the source of the two. This is the key thing. Any other question? OK, thank you very much.