 Coming here is a great pleasure and a great honor. This is my first time in Scandinavia. I've traveled to 44 countries so far, but the first visit to Scandinavia, certainly hoping it won't be my last. But it's also been a bit challenging for me to think about what exactly I would talk about in the context of this conference. The conference is also blockchain day. Those of you who know me probably know that I'm interested in the open public blockchains. The ones that are destructive, the ones that are global and free and censorship-resistant, things like Bitcoin, things like Ethereum. I'm interested in those because they provide remedies for some big societal problems. Problems such as corrupt governments, problems such as failing democratic institutions, problems such as large populations of unbanked people, corrupt banks and banking practices, difficulties in finance and international finance. Problems in short that Norway doesn't have. So that's been a challenge because if I go to Argentina and I say, you know, it's probably not a good idea to have your governments in charge of money. They're like rules, obviously. Obviously, you know, 35 years ago they were throwing people out of aircraft for disagreeing with them. Not exactly the kind of government you want to give power over the banking system, currency controls, hyperinflation. You can't have that conversation with a normal nature. If I go to Norway and I say, well, I really don't think government should be in charge of money. If you go to the region and say, why not? They're doing a very good job. I'm very pleased with my government. And it's true, right? This is a bit of a challenge to explain why these technologies matter in one of the few places in the world where government mostly works in a very good way. And it's not tyrannical, you know, it's not oppressive, quite the opposite, quite the opposite. In fact, two days ago I was walking around the city and I noticed a whole load of people wearing turbans. And maybe you did not look like seats, but they were wearing turbans anyway. So I asked, what is this? Oh, it's turbine day today. So turbine day, in order to show solidarity with immigrant populations, especially Sikhs, we all wear colorful turbans and we have a competition for who has the best turbine, which then gets displayed. Like, oh my God. So in the United States, we're building a wall to keep out the wave of refugees who are coming from countries that we recently bombed, kind of the same thing. You know, so it's like, it's a bit of a strange situation trying to explain why you mean such a thing. Now we just have a very effective banking, efficient, convenient. This is one of the most cashless societies in the world. Actually, it's the second, it's the second most cashless country in the world. Do you know who the first cashless country in the world is? Sweet. Anyone? Sweet. Kenya. Whoa, you didn't expect that one. Kenya, Kenya. Because of their PESA, a system of digital money, it's transmitted using SMS. But not always number two. Almost there. You can catch up to it. This is a country in which cash is almost invisible. I haven't used cash at all since I've been here. credit cards, debit cards, very convenient. You also have mobile payment systems. So you can use a system called Vips, I believe. And very easily, you can send money to anyone up to about 5,000 providers very easily. You can send more to some organizations. You have to pay a fee if you do more than that. But under 5,000, it's basically free and fast, instantaneous almost. Do you use checks in this country? When was the last time you saw a check? Okay, let's see who's over 50. Anybody seen a check here? No? You've seen checks. Very good. Could you explain a check to a 15-year-old Norwegian? They think you're an alien, right? It would be a bit like trying to explain a fax machine. So this is the challenge, explaining this technology. The rest of the world isn't like Norway. It simply isn't. In hundreds of countries, more than a hundred governments, is not benevolent and functioning and uncorrupt. Banks are rapacious creditors, not partners in business, right? And control of money by institutions leads to power concentration and corruption. But I'm not going to try and sell you all these technologies on that basis. I'm not trying to sell these technologies. What I'm trying to understand is what is the perspective for which a country like Norway can benefit from a technology such as Bitcoin or Ethereum? What is a blockchain's purpose in this country? The real idea here is an issue of functionality to me. If you look at what you can do with Vips, for example, and you look at what you can do with Bitcoin, for example, it seems like Bitcoin is just a weird, geeky version of Vips that's difficult to explain. But other than that, it doesn't seem to have any benefit. The fees are higher on Bitcoin too. How many of you here have done at least one transaction using an open cryptocurrency, Bitcoin, Ethereum, or anything else? Pretty much everyone, at least 80%. So why would you use this technology here? I'd like to take a moment to think back about the early days of the internet and give you a comparison of the time, which may give you some insight. In the 1990s, I was trying to introduce a new technology to financial services companies in London. At the time, I came with this new technology as a young consultant. This thing is called the internet. We have a system called electronic bail. You can use that to communicate with other financial services companies. It was very difficult because they said, but we already have faxes and we already have co-exists. If you make the comparison, email at the time wasn't working so well. So fax, you could send text, but you could also send a drawing. You could send a diagram. You could send a chart. You could hand write a note and fax it. You could do any of those things with email. Attachments were not working very well. Capacity wasn't there. If you tried to attach an image, we didn't have scanners and cameras and things like that that made it easy. You couldn't really do that. Email didn't have guaranteed delivery for text. But every single institution that I had working with me had telex. And telex had guaranteed delivery with proof that you could take to a court. So they used it for the settlement of securities instruments because they would prove that the telex had been received. So how do you tell people this is going to be better? When at the time it's not better. But if you look at email then, or the internet, what you see is only a glimpse of what is yet to come. What you see is a protocol that can kind of do what already exists, but not very well, but it's much more flexible and in the future it can do a lot more. So if you look at Bitcoin versus Vips today, it looks like Vips is a lot easier. But Bitcoin is a lot more flexible. Bitcoin is programmable. Bitcoin isn't owned by anyone. So if you try to think about where that will take us in the future, imagine if the entire world had Vips. Imagine if you could Vips money to seven and a half billion people anywhere on the planet just as easily as you can someone in Norway. And eventually a technology like Bitcoin will be able to do that. Not yet. There aren't enough people using it. It's not as easy to use. There isn't the capacity to do it for seven and a half billion people, just like there was the capacity to do image attachments on email. But if you try to imagine where this is going as the flexibility increases, things become easier and easier and easier. There's this very strange thing that happens with new and destructive technologies, which is that at first they completely fail to even simulate the technology they're replacing. Think about the introduction of the first car. You've got a horse, you've got a carriage, and someone tries to sell you a car. They're demonstrating this vehicle, right? And compared to the horse you have, the car sucks in every way. First of all, horses are the original self-driving vehicle. Full autonomy. In cars we would call that the level four autonomy. You know when the guy walks out of the saloon and goes, and a horse comes, we just managed to do that with a Tesla in the last three years, where it comes through the parking lot and picks you up. Horses could do that for thousands of years, right? You arrive outside of the bar in the saloon, jump off the horse, and the horse just goes by itself to go refill on water and fuel. It has independence for a light drive, with traction control, autonomous obstacle avoidance, distance keeping, and lane management. Meanwhile, if you tried to use a car in the roads they have then, it would get stuck, it wouldn't be able to move, because the roads were not viable. This happens again and again and again in technology, not just in the past, but also in the near present. 3D printing. 3D printing, most people hear about 3D printing, and they read about it, and it got really popular in the last few years with a small company called MakerBot. How many people have heard of MakerBot and 3D printing? Yes. Have you seen it? 3D printing was not invented by MakerBot, of course. You could buy 3D printers at a time when MakerBot was released. There were the size of four refrigerators stacked next to each other. They used either laser sentry or other forms of metal deposition. They cost about $300,000 to about $1,000,000, and they produced beautiful prototypes that could be used directly, even in engines out of metal components. Then you got the little MakerBot in the corner that stinks of plastic and is rickety and has very little resolution, and it produces this gnarly little plastic cube, and you go, behold the revolution of 3D printing. It's shit. And anyone in the 3D printing business would go, that's ridiculous. Why are you even pretending to try to compete? And the answer is simple. Because that thing cost a dollar. And it looks crap now, but give it 30 years, put it on every desktop and see it change the world, because you're never going to change it with this million dollar piece of equipment that you built that's the size of a bus. We have drones, right? Everybody excited about drones? Who's playing with drones? Fascinating, right? Yeah, so imagine a platform that can be released from your hands, guided to an altitude, provide remote surveillance, perhaps monitor a location to tell you if someone's approaching, like a guard duty, return automatically and land back on your hands whenever you wanted. Arabs had this technology 6,000 years ago. They called it Birds of Prey. They taught a hawk how to do that. Take off of the hand, do wide area surveillance, come back faster than a drone, higher than a drone, feet itself can actually go hunting for you too, right? Doesn't get lost, doesn't crash, doesn't have 20 minutes endurance, has 20 hours endurance on a single meal. So a drone looks terrible compared to a bird of prey. And yes, can you make the swarm of a thousand that can move at 500 miles an hour? You can never do that with a bird of prey. Give us 10 years with drones and watch what happens. This is what happens with technology again and again and again. The first iteration, what it does is it doesn't improve on the existing capability. Instead, it widens the field. It opens up the door for much wider set of applications that were never possible before. And in doing so, it fails to excel at the applications you can already do. Momentarily, until economies of scale, volume, coordination, and productivity make it much better at everything else and the thing that it originally failed at. And so we see this happen again and again with technology. Now we're going to see it with the technology of money. Vips is great. As long as you're over 15, have a debit card or bank account to nominate it in Norway and you only want to send money to Norwegians. And big one, it looks like you can't do any of those things but all you need to qualify is the ability to download an application on an Android phone that can cost $25, anywhere in the world and you can then send money to 7.5 billion people with that same application as long as they download it too. At first, it looks inferior but it opens the door to create a completely unified financial system without borders. But it's not just a payments network because one of the other things that this technology does is it provides a global store of value, a universal reserve currency, a system of digital gold. We will look back, I think, 10 years from now if this experiment is successful and see the emergence of this global standard, this new asset that allows both individuals to preserve wealth and eventually even states to preserve wealth. It sounds preposterous as I say today that one day countries will accumulate cryptocurrencies as part of their foreign reserves, as part of their capital reserves. It seems ridiculous. It will happen. It will happen and they will be able to acquire these cryptocurrencies that will not only represent value but they will also represent neutrality. They will not belong to any flag. They will not reflect any geopolitics. Every form of reserve currency we have today reflects geopolitics. It reflects national interests. But cryptocurrencies are reflective of math, not geopolitical interests. So you can have this emergence of a global asset class, a stable store of value that provides us with independence. And that's just the beginning because there are other blockchains and they're doing different things. Things that are more in the area of governance. How many here have heard of or used Ethereum? Now you keep hearing these words, smart contract. And most people have no idea what a smart contract is. It sounds smart. It sounds like a contract so maybe it's related to some legal language. But really that term is quite deceiving. A smart contract is really a dumb program. It's a very simple dumb program. What special isn't the program. What special isn't the smart contract. What is special is the platform it is running on. A platform that allows you to execute code in a persistent, consistent, worldwide, secure, neutral, censorship-resistant way. Unstoppable code that runs everywhere. The world is the same everywhere. On a platform that can be trusted to provide financial activity and governance in a single program. That's a really exciting opportunity. Now, what are we using this opportunity for? To do initial coin offers. That's a waste of that fantastic opportunity. And it's going to create some spectacular explosions when these ICOs go boom. But that doesn't change the fact that behind this is the possibility to reinvent governance. And if you understand what Bitcoin is doing, Bitcoin is a direct disruption to the basis of central banking, store value, payments networks, and international wire transfers. Those are obvious, right? Bitcoin offers solutions that disrupt these four functions. Central banking, store value, payment networks, international wires. It offers a novel way of doing these things in a way that's open, global, neutral, censorship-resistant. And that's exciting. What exactly is Ethereum doing? What does that disrupt? For that, you have to look at one of the most important inventions of the 19th century, which was the modern shareholder corporation. But it's not really a 19th century invention. It's actually a 16th century invention. And in the 19th century, we see the modern version of that, which is available across the world. But it goes back to the East India Company. Right? The Dutch East India Company and the British East India Company, the first two corporations that under a royal charter allowed individuals to invest in a journey across the seas in order to get spices and bring them to Europe. That institution is the basis of commerce and has been the basis of commerce for 400 years. And it's about to get majorly disrupted. What are the key characteristics of a corporation? One, jurisdiction. Corporations have a domicile. They have a location. Right? They have a specific country of registration. Who needs that? Forget jurisdiction. How about we now do that on a completely global basis with companies that are not registered anywhere but are registered everywhere? Really not registered. They simply exist. The decentralized autonomous organization is the reinvention of a 500-year-old concept of a corporation for the modern age. It allows any number of humans or software agents to collaborate on a long-term or short-term basis to engage in a common venture with a government structure that allows them to vote, a system that allows them to share in equity, contribute to funding, and receive returns on investment. Most of the early examples we have so far are focused on the funding side, which, in my opinion, is the wrong side of the equation. Funding before governance is a very dangerous example. Most of the initial coin offerings we see coming out to Ethereum have a lot of funding and very little governance. The modern corporation is going to be reinvented as we introduce systems that offer us modern, new, novel mechanisms for governance. And eventually those reinvent financing as well, but governance is where it starts. I use a simple analogy to explain this concept. What is the difference between a rocket and a bomb? Rocket science is really the fundamental difference, and it comes down to governance. If you look at a rocket chemically speaking, it's a bomb. The components of a rocket are exactly the same chemical components we use to construct a bomb. The only difference is one is an exothermic, violent reaction that happens almost instantaneous and in every direction. And the other one is an exothermic, violent reaction that happens gradually over time and in one direction. Sometimes if you get the governance wrong, the rocket turns into a bomb and goes from one direction measured to every direction instantaneous. How do you get to learning how to do governance is by building several of these, having most of them blow up before they leave the launch pad, and learning how to do better governance until one day you can really get quite high with these devices. You can achieve rocket science. But if you look at the early days of rocket science, it doesn't seem possible because these things keep exploding. Ethereum's ICOs are rocket science without governance, and what we're creating is a lot of pretty powerful bombs that are exploding on the launch pad, and more of them are going to blow up. Some of them are going to reach, you know, a few hundred feet in altitude and then blow up spectacularly. And part of the reason is that we're putting a lot of fuel, which is the money behind very little governance. And the more fuel you put in the less governance you have, the more likely you are to make the transition from rocket to bomb. The worst thing you can do to a startup is take a group of professionals who have never worked together and then hand them ten or fifteen million dollars on the basis of an idea and watch how quickly friendships fall apart. How quickly the people you thought were your friends give you a call from Bermuda, going, I'm really sorry, man, but it was too tempting. I had to take the money and run. This is going to keep happening. But don't let that distract. From the very fundamentals that are happening underneath, we are gradually building reusable, mature governance models. Governance models that will reinvent the modern corporation. And this is no small task. Reinventing the modern corporation will radically transform international commerce. These two examples are just what happened in the first eight years of this technology called blockchain. Out of this technology, we have these two examples. A system of money, payments, international currency, and possibly a reserve currency. And a system of governance through smart contracts will revolutionize the modern corporation. Don't let that distract you, though. There's a lot more blockchain going on. And most of it is bullshit. Now, the very difficult task is being able to tell the difference between these very real, very meaningful, very disruptive, very innovative technologies that we see. And the meaningless, marketing-driven, funding-oriented excuses that people call blockchain in order to raise money. It's often very difficult to tell which is which. You have to start with one of the principles that a blockchain delivers. Now, I prefer to speak of open public blockchain. Because open public blockchain is the magic technology. It's like the difference between internet and TCPIP. TCPIP is not revolutionary. TCPIP is not what made the internet magical. In fact, the early internet didn't use TCPIP, and it was still revolutionary. And today's internet could change to a different protocol and still be revolutionary. What is magical about the internet is that it is open, borderless, neutral, and censorship-resistant. It is a global, equalizing communication system. And TCPIP is just a means by which it gets that done. The open public blockchains today are the internet of money, the internet of corporations that we see now emerging. And blockchain is just a TCPIP. And you can take TCPIP and make something very boring. How many of you work in a corporate environment? Like adults, how many of you have an internet in your company? How many of you love the applications you have on your internet? TCPIP, right? You take the technology, and what you do is you remove all of the things that make the internet interesting. The internet is open and the internet is closed. The internet is borderless and the internet has firewalls. The internet has permissionless applications. Anyone could write the internet is controlled by the IT department and has applications from Oracle and Microsoft. The internet connects you to the world. The internet isolates you from the world. So you've taken the same technology, changed the culture and built something that doesn't resemble what you started with. And you end up with something that is insecure, stale, boring, and that sucks productivity instead of increasing it. The very same companies that would create an internet, banks, large corporations, are now adjurating and blockchain because they failed to learn the fundamental lesson. What is magical in these technologies is the open, permissionless, inter-connectivity, the borderless nature connecting the world, freeing the flow of information. In the case of Bitcoin, freeing the flow of money globally. In the case of Ethereum, freeing the constraints of governments and corporations globally. You take that technology, you close it, control it, control access, control innovation, and build a system that is inside your company. And what you've built is the internet of money, the internet of corporations, and it is boring, but it's worse than that. It's not just boring, it's also insecure. It is almost impossible to secure the system because you centralize control over it. And the only reason Bitcoin is secure, the only reason Ethereum is secure, the only reason all of these open public blockchains are secure is because control is completely decentralized. Centralizing control does not make things more secure, it makes them vulnerable. You've also taken away immutability. Immutability is one of the great characteristics of these open public blockchains. Information stored in them cannot be retroactively changed. Unless you have a closed private blockchain, in which case it is no longer immutable. It can be changed by whoever has the keys, which today is the corporation or consortium. And tomorrow is a gang of 14-year-old hackers called anonymous, and they take over changing your immutable blockchain, which turned out to be immutable. If you take away the characteristics of making these open public blockchains interesting, what you end up with is stale, insecure, and boring. Be very skeptical. When you hear a company say, we're going to use a blockchain, 90% of the time what they mean is we're going to use a database. The reason for that is because the first hurdle that any company or government must overcome before they can really use this technology is to relinquish the illusion of control. That's step one. You want to use blockchain? There are several open public blockchains. Use those. But we don't control them exactly. Relinquish the illusion of control. Embrace the security of decentralization. Embrace the innovation of the commas. Embrace the openness of global communication. Those are the revolutionary things. Those are the things that make these technologies interesting. Give up control. And that is very difficult to sell. It's a very difficult idea to even communicate within a large corporation. You will be more secure if you have no control over the system. That is a very difficult concept to convey. It is the truth. And so you have to be brave when you have these conversations. You have to be able to call a spade a spade, as we say. I know this is not part of the culture here. American culture being very direct is, I am sure, as in most of Europe, considered rude here. If your boss comes and says, we're going to use a private blockchain, it is not proper to say, you know what, pure, that's bullshit. Now, you can hire an American consultant to come in and do exactly that little thing. It's probably much more credible if they're well-paid. But be brave. Speak your mind. If you see that what your companies are trying to do is simply a database. It's a repeating business as usual, but sticking the word blockchain in means it sounds cool and modern, but it's not really a blockchain. It's just a database. Speak up and say, that's not what this technology is designed to do. Ask the important questions. Which of the promises, which of the features, which of the capabilities of the open public blockchain are we trying to leverage with this application? What is it that this application says we need a blockchain? Because not every application needs one. In fact, very few applications need a global trust platform. It's inefficient. It doesn't scale. Democracy doesn't scale. Blockchains that are open and public are inherently egalitarian systems. That does not scale. It's not intended to scale. It's intended to be egalitarian. There's a difference. What are the principles that you're trying to achieve? We want to use blockchain to put healthcare information. Really, which part of open, neutral, censorship-resistant, borderless, transparent, resilient are you going to use for that? Because at least five of those are antithetical to any application where you would put private healthcare information. I hear this a lot. How many of you have heard of healthcare on a blockchain? Oh my God, it's a nightmare. Can you imagine having your healthcare information on a public ledger that can never be changed even if there's a mistake? We already have a system like that in the modern world. It's credit scoring. It's where a single corporation controls your credit rating, and when they make a mistake, they don't have to fix it, and you are punished for life for somebody else's erroneous data. And now we want to do this in healthcare with our DNA. What a brilliant idea. Sign me out. I don't want anything to do with it. Blockchain transportation. Blockchain for clearing securities. Blockchain for logistics. Blockchain for blah, blah, blah, blah, blah. 90% of those applications, the word blockchain means database. Learn the difference. Teach the difference. And be brave enough to speak out when you see the difference. This technology is revolutionary because it is open, because it is public, because it is global. And if you use it for the right applications, the applications that need to be open, transparent, highly innovative, censorship resistant, neutral, and global, then this technology is really, really powerful. Use it for the right thing. Thank you.