 On the Ground, presented by theCUBE. Here's your host, Jeff Frick. Hi, Jeff Frick here with theCUBE. We are on the ground at the Mission Bay Conference Center at the Bitcoin, or not the Bitcoin, I'm still saying Bitcoin, it's a blockchain conference. Really, blockchain is kind of separating itself from Bitcoin, which is the application a lot of us know about, but blockchain is a much broader application. And we're seeing a lot more talk about it outside the context of Bitcoin. So we wanted to come up here, get a taste of what's going on. We're really excited to be joined by Dustin Beigten, the co-founder and president of Tendermit. Welcome, Dustin. Thank you, thank you for having me. So for the people that aren't familiar with Tendermit, give us a little overview. Well, first and foremost, Tendermit makes blockchains simple. There's a lot of complexity in this world of distributed ledger and consensus. And it's very challenging, both conceptually and for application developers to grab their minds around this. And so the key aim of Tendermit is to simplify blockchains and bring them to enterprise. No, it's interesting because the complexity was kind of built in as part of what you wanted when the main application was Bitcoin, right? You want to make it harder for people to cheat and steal and break the system, but this is a totally different type of an application. Sure, well, like some of our friends are at the block stream and they talk about purposely, blockchain is supposed to be difficult to change. I personally think that has a very useful, a great use case in digital gold, but when you have a system that's very monolithic, has a lot of inertia to it, doesn't meet the needs of enterprise, particularly given that you hear a lot of talk about permissionless permission. I think it's important to get a little more granular there with what that means. What we're really talking about is the validation of transactions. And so in Bitcoin, anybody can validate transactions. All you have to do is burn some electricity and that's what's permissionless validation. And that actually is a bug, not a feature for enterprise clients, particularly those in the financial services industry who want to ensure we love knowing who their counterparties are and are particularly concerned about their counterparties working in North Korea. So in Bitcoin, conceivably, some of the validated transaction in North Korea, and if you're a financial services company, did you just do business with North Korea? That could potentially be an OFAC violation and now you're dealing with the Department of Defense. So from kind of the start, Bitcoin is not necessarily a great solution and you see a lot of rebranding away from Bitcoin to blockchain. So Tenerman exists to, you know, has been built from the ground up with the needs of enterprise clients in mind. So then how do you kind of merge the needs for enterprise customers and the SEC and there's a lot of kind of public, the information that has to be there be validated with kind of what was sold as the benefit of Bitcoin, which was you didn't have this trusted intermediary, just kind of happened and suddenly you've got the credits in your account. How do enterprises use the benefits of blockchain but still take care of the much more difficult compliance regulatory restrictions that they have? Sure, so at the heart of any blockchain stack is this thing called the Byzantine fault tolerant algorithm and Byzantine just means it's like, Byzantine is like a malicious actor, somebody who is like looking to, you know, potentially attack the system and so Bitcoin can operate completely in the wild because it's Byzantine fault tolerant. There can be these Byzantine actors and there are all the time trying to change the database to give themselves more money but Bitcoin is very robust and tolerant to those kinds of attacks. You can, however, it's a bit of a misnomer that Bitcoin was the creator of BFT. In fact, there was some academic research going back to the late 80s and 90s about how to construct these systems using forms and digital signatures instead of energy and hashes. And so that's the security model that we employ that helps you have all the same traits of Bitcoin in that you can remove these central intermediaries and the systems themselves can provide the trust and the security and so you can exchange directly in a peer-to-peer fashion at scale. And so that's really, you know, consortiums are our first major play there. You know, you think about 20, 40 banks getting together wanting to now engage directly in a FX swap instead of having to go through like a clearing house or a depository that has their own set of costs and increases the time to settlement, increased time, increased risk. And so the value prop to financial institutions is clear and we're working with a number of them both to be building on our platform and as our first customers, our first customers in the foreign exchange space. But also I think there is a use case in the Fortune 500 company and non-financial services world as well. Yeah, Mark Andreessen's piece on the Byzantine generals problem, you know, for me it was kind of the wake up call to look beyond Bitcoin. It's really an exchange of value in a non-intermediary to really look at the bigger problem, the math problem, the computer science problem to have these kind of transactions. So we know about financial services and financial transactions. What are you seeing in the marketplace for the application of blockchain and things like medical and things, you know, beyond financial services? Sure, I think if you, we spent a lot of time thinking about these different use cases as being in the permission blockchain space. We wanted to make sure that we were solving real problems and not just reinventing, you know, a better database or a database that could be outperformed by existing legacy databases. And what we came to realize was that Fortune 500 companies, multinationals, really very much resemble conglomerates. I'm sorry, pardon me, consortiums, consortia. In that, if you think about a multinational that has, they have departments all over the world, regions all over the world, they don't necessarily trust one another. And so where does that trust come from? Usually that trust comes from the corporate office and that can both in a similar way that creates cost that reduces the speed and the efficiency of the system when it's always funneling up in this kind of hierarchical manner. And so we do think that there is a big play in the non-financial services space but also, you know, there's the use cases sort of abound, whether it's just some interesting ones about diamonds and supply chain. So, you know, it's still yet to kind of be determined exactly how creative people are gonna be but I would look for, think about blockchains as trust as a service. So now, instead of using, you know, who are the general providers of trust? You've got, you know, depositories, clearinghouses, governments, think about voting, right? When you're voting, you have this government that you're trusting is going to count all the votes and like, you know, elect the proper person. Now, instead of trusting a government, you can trust technology, you can trust the network. And so I think we're really interested to see how the use cases shape out. And that's pretty interesting, trust as a service because there were some talks in the earlier keynotes about removing friction, just removing a third party, removing barriers to transactions because they're not big enough for a third party to get involved, a lot of things. But the trust is an interesting one but is there still opportunities when you have the trust but you still want some of these other benefits of less friction, not a third party? It depends, it's possible. I'd really encourage thinking about use cases that do have some trust element to it. And also, you know, trust is so deep in the stack too that when you totally change the trust model, then the whole stack that's built on top of it, you're like, wow, why would I architect it this way? Like all of these things are built on, like especially in the financial services world under this like basic premise that banks don't totally trust each other. So when you can change that and you can sort of allow them to pay for this trust in like a very cost efficient, effective manner, then you can change lots of things and you start changing some things and that ripples up and allows you to reconstruct things in different areas. So it would be really interesting to see what the ripple effects are of changing the trust model. So I'll give you the last word before we drop off a lot of enthusiasm here at the show. But from kind of outsiders kind of new to the space, what should they look for in 2016? It's kind of indications of traction and indications of blockchain really starting to gain hold to get outside of the context, specifically at Bitcoin. You know, it's going to be adoption, adoption by the corporates, the enterprise. The old platforms really didn't meet their needs. And also the consumer play hasn't quite taken off like people expecting either. And so now you see massive shift towards the enterprise and B2B plays, but they didn't have the underlying, the underlying platforms, the underlying structures to really solve their needs. And so now that we have these tools in place, we're going to really rapidly see some production quality applications that are going to really shake things up. All right, Dustin. Well, thanks for taking a few minutes out of your busy day. I appreciate it. Dustin Bighton from Tenderman. I'm Jeff Rick. You're watching theCUBE. See you next time. Thanks Jeff.