 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 in downtown San Francisco at the Blockchain Conference. Blockchain is really busting out beyond Bitcoin, which is kind of traditional underpinnings of Bitcoin, but it's getting a lot more traction well beyond the Bitcoin ecosystem. And so we were really excited to come up here and see what's going on at the conference. And we're joined at our next segment by the head of the conference, Pete Harris. Conference Chair, the Blockchain Conference and also Lighthouse Partners. Welcome and thanks for inviting us. Thanks, thanks for inviting me. Absolutely. So how many people are here? Give people kind of the rundown on the conference. Probably about 250 people here. Pretty much a mix of people from some very big IT vendors, IBM's an obvious one, but some other Windows Cisco systems are here, Intel is here, SAP's represented. So some of those guys, smaller, you know, startup companies in the blockchain space, they're here too. And also some very big, what I call enterprise IT users. A pretty good consensual from financial services, which is a little bit surprising to me because I expected to get a good number if this was in New York City, but here in San Francisco, still got a lot of people here and they've come in from a long way away in some cases, not just Wall Street, but we've got a CIO of UBS here from Australia, though I think 13 or 14 countries here. So it's kind of interesting on the financial services side is because Bitcoin was a way to get away from the trusted third party intermediary, but the financial companies are here. Right. Is it because of the stick? Is it because of the carrot? Why are they think they're getting involved? I think it's very much the carrot and it's really the blockchain technology as a concept really, really has the promise to reduce costs, reduce friction of the whole financial sort of markets, you know, post-trade process. I think that's one big reason. It really, fundamentally, it reduces cost in a number of ways. It reduces risk, which in itself reduces cost that regulators like it because regulators don't like risk. It is actually very transparent. So again, regulators like it. Financial services firms are always complaining about the amount of money they're having to spend on complying with regulation. And so if they can implement a technology which the regulators like and which cost them a lot less, it's a real win-win for them. And if they can then use it to actually make more money on the top line, that's a triple win. So that's an interesting point because a lot of people perceived at least Bitcoin as an application within blockchain as a way to get around regulation, to get around trackability, right? It's anonymous. So how does it play with the SEC and banking regulations and all this stuff that comes with established financial services companies not to mention when you get into other industrials that have, again, compliance, those types of things. How's blockchain fit? Well, if it was simply a Bitcoin world, I think there definitely are issues there. But what's very much happened in the blockchain world is that because a lot of the major banks have become interested in it for those reasons, those entities understand regulation and understand the needs of regulation. So they're coming at it from the very first stage of saying we like this idea of blockchain, but by the way, how it works right now, not going to really work. If we can improve upon it in certain ways about security, transparency, compliance, yeah, we can buy into that. And what's happening now is that the blockchain sort of vendor community partnering with the large IT vendors who are going to be very important in this are really sort of coming up and saying, yeah, we can implement blockchain technology in a very acceptable form for big business. Not happening yet, but it's on the way. Right, and that's where you get somebody like IBM. I asked him before we came on there, what are the big surprises? The fact that IBM is here with a significant presence and a significant investment. So what does that really say to the evolution of blockchain as it grows and matures as a technology? It absolutely legitimizes it. The fact that IBM's been working on blockchain technology for I think a couple of years now, I think as we heard earlier from John Wolpert from IBM and he was saying they've got an army of people now working on it and they spread all around the world. They've got a lot of expertise, they've donated a lot of their code and their intellectual property to the open source world, which is going to just bolster its adoption. So I think having a company like IBM really helps to push this technology along, which is why you are now seeing a lot of other big IT companies sort of very much get involved. Quite a few of them are here, partly because they want to know more about what IBM's doing and they want to figure out how they should be getting involved. Right, and I was struck by one of the early keynotes that we were talking about, people that are in bankless societies. At the same time, I think it's a huge number of people, at the same time we read every day that there's more mobile phones now being used than there are people. You know, how much is the mobile phone and mobile phone connectivity and really delivering technology to the hands of people that were here before and able to, there was no city, there was no bank, really driven, you know, some of the adoption is technology. I think it's definitely played a part. You know, I think mobile as a general concept has really changed an awful lot of, you know, business. And I think certainly now banks see mobile technology which really can be obviously, you know, be, you know, created by non-banks, offering services over mobile technology that they really see it as really a potential disruptor to their business. So the banks want to, you know, understand about mobile technology and it definitely has a play in the blockchain and Bitcoin world because it's really an on-ramp to the blockchain. One on the on-ramp. Yeah, and you can deliver such powerful technology to a person in a location without having to build all the infrastructure to get it there. Certainly. You can build a bank without a single, you know, brick mortar branch and you can build it and you can deploy that if you want in the middle of Africa. Right. The other thing that came up on one of the keynotes is really the concept of friction, friction and financial transactions. And removing friction is, you know, business 101 way to unlock value, whether that's in your supply chain, your financial transactions, a lot of places if you remove friction, that's usually money. You think that is, you know, one of the big draws again for the financial services companies getting involved here. It's just a way to unlock value in a friction system. To financial services firms, friction absolutely means money and it's money that to them they're spending in, you know, for no good reason. And to say it's not helpful in lots of other ways. It adds the risk which actually means that banks have to have more money on reserve to cover their risks. So if you can get rid of friction, you can fundamentally reduce costs but you can sort of in a roundabout way do it as well. So big, big driver, big driver. So give you the last word before we sign out. And again, a lot of interesting conversations happening here in the halls as well as the keynotes. What should outsiders look for over the next year before your next conference next year? Three months, six months, nine months as indications of adoption. Where will blockchain start to get some traction? Where will we see as a kind of a leading indicator that this thing is really starting to deliver on the promise and the expectation that a lot of people have? Certainly, I think the world will be looking to the financial services because they are very much early adopters. I think looking at some early proof of concepts working in the financial services, seeing how they're going and especially looking at how big IT vendors, you know, IBM's in the space but there are many other companies besides IBM. We should be seeing those people get involved as well and if they are, then it's here to stay and if they're not, there's a question mark. All right. Well Pete, thanks for taking a few minutes out of your busy day running the show. Absolutely, it's good to see you. Jeff Rick here with theCUBE. We are on the ground at Mission Bay Conference Center in San Francisco at the Blockchain Conference. Thanks for watching. See you next time.