 All right, so I spent the first part of my presentation discussing Bitcoin and doing an introductory conversation about Bitcoin and You may have heard this term blockchain In fact, it's on the poster. It's on all the posters Blockchain and cryptocurrency what on earth is a blockchain and what does it have to do with Bitcoin? So Bitcoin is the foundational technology. Bitcoin is the technology that started it all Bitcoin is the parent and it has spawned many trial because many children because it is successful and As successful technology it has created a number of other opportunities When people use the term blockchain, they're referring to one technology that is part of Bitcoin It is perhaps the most visible technology, which is the database that stores transactions the public ledger The list of all transactions that has happened. It's a decentralized replicated database For those of you who are interested in the technical terms that is what a blockchain is But people don't use it to mean that People use the term blockchain to mean things that are kind of like Bitcoin Things that do what Bitcoin does and then some and all of the other applications that have nothing to do with money And then the banks go and some of the things we do But we would like to call blockchain to seem like we're doing innovation and Then the consultants go to the banks and say and you can also call blockchain doing exactly what you used to do Business as usual without being disrupted at all and we're sure we can make it work for you if you pay us enough As a result nobody really knows what blockchain means Blockchain is an industry We have a saying that The most important meaning of blockchain is that if you go to Silicon Valley Go into your hotel room turn off all the lights Stand in front of the mirror and say blockchain blockchain blockchain three times Ten venture capitalists will jump out of the closet since for a millions of dollars at you And that is true That is true. I've seen it Blockchain in itself is meaningless Blockchain is what we use to say the technology behind Bitcoin Which is a bit like saying network is the technology behind the internet And of course if you're one of the industries that is being massively disrupted by the internet Maybe you want to say hey we can do network too We don't want to do the public messy open Not very profitable freedom bringing internet But we could do network all day as long as it's private controlled and profit-making and we can charge by the minute We can do network too And if you think that's fiction, that's exactly what happened on the internet in the 90s That's what the phone companies tried to do. They tried to create private internet Which was internet without any of the interesting things It was internet's way you needed a license and a registration and an account Well now a lot of companies are trying to do that with the Bitcoin space So blockchain means some interesting things But it also means some not so interesting things and it also means some things that are just Attempts by consultants to confuse enough to make some money on the side. I'm gonna focus on the interesting things So, how do you tell what a blockchain is and what a blockchain isn't? What are the things that are interesting about Bitcoin? What are the things that are interesting about the internet? Is the internet interesting because it offers you network is Bitcoin interesting because it does payments To me the interesting things are certain characteristics. What is Bitcoin? Bitcoin is a system of payments that is open What does open mean? Open means anyone can access it anyone can participate Anyone can innovate on the system without asking for permission. That's what open means It is borderless There are no borders. There are no borders on the internet. There are no borders in Bitcoin The protocol simply does not see distinctions between countries. They are meaningless It is neutral It doesn't care if the participant is male female Christian Muslim old young rich poor Browns black whites or whatever The protocol doesn't care. It's neutral. It validates transactions. It's decentralized There is no central point of control It is censorship resistance. You cannot Sensor freeze or cancel transactions. Those are the things that make Bitcoin interesting Arguably, those are the things that make the internet interesting Right, that's why it's powerful There are other blockchains that also share those characteristics In fact people have taken the basic recipe of Bitcoin and in the first year they created two or three alternative coins They were called altcoins since then every year more and more and more and more today. There are more than 1500 blockchain based systems that use the basic recipe of Bitcoin or variations of that Design principle to create systems of currency Systems of trade platforms and various other things. These are all blockchains. Most of them Share the interesting characteristics of Bitcoin their open borderless neutral censorship resistance some do not of the 1500 I Would say more than 90% are worthless And of those more than 90% are probably scams Their primary purpose is to enrich the people who created them They see something successful. They try to create it. In fact, we have seen the emergence of a very large number of scams Scams that are in essence Ponzi schemes. Who's familiar with the term Ponzi? Ponzi Did you know that's the name of a guy? Mr. Ponzi He inadvertently became famous Multi-layer marketing systems pyramid schemes, right So if you try to sell Bitcoin to someone and I don't I talk about it as an experimental technology That you should only invest in if you really understand how it works And you should primarily invest in learning and understanding the technical skills that can turn this into an innovative industry a Start-up business a career some opportunity for you as an individual It's not a stock investment and if you hear someone tell you that this system is an investment It's a sure investment It's a safe investment. It's a risk-free investment or even worse It is a system that is guaranteed to make you rich Quickly run away as fast as you can because those characteristics are shared by only one category of investments scams Nothing in life is easy risk-free and will make you rich So beware especially in Southeast Asia where you have very large numbers of new Middle-class investors for the first time entering investment markets Scam coins Ponzi schemes and multi-level marketing schemes are extremely popular When you hear this is like Bitcoin only will make you rich Girl away run away Bitcoin will not make you rich. It can't make you poor quickly It is a volatile experimental system that comes with risks I am advocating the understanding of this technology, which is enormously powerful Not the use of it as a speculative investment Unless you need to use it and know how to use it. It's not an investment Now let's talk about some of the other systems that are out there There are probably about a dozen other Cryptocurrencies crypto currencies is another term we use for these open blockchains these public systems of ledger That can be used to build systems of trust some of them are very explicitly Currencies I'll mention just a few you may have heard of them dash Monero Ethereum Zcash Light coin all of these are crypto currencies that are based on open public ledgers They represent interesting technologies that are developing a long-time Bitcoin many others are also growing I Do not Recommend you use those as speculative investments either but understand what they do and how they're different so that you can get a better Picture of this industry as it emerges My next focus on Ethereum Which I haven't talked about much How many people here are familiar with the theorem or have heard of it used it? Great a very large number of people so for those of you who have not heard about the theorem the theorem started Based on a paper published in 2013 by then 19-year-old Vitalik buttern I got a hold of that paper before it became public and called Vitalik up to get some information about this I was very skeptical, but I have been interested ever since and I'm writing my next book on it the idea behind the theorem is if we can have this public ledger that is Allowing us to trust and do computation at scale how about instead of using it for money We use it to run computer programs and these computer programs run everywhere and their results are recorded in a way That is immutable Persistent and trustworthy by all of the participants global secure decentralized computation not money And it has a system of money called ether, but what it really allows you to do interestingly is run smart contracts The idea here is taking contractual arrangements the kinds of things we would do in commercial contract law or transactional laws, it's known and encode relationships and contractual obligations in software programs if this happens then do this else do that the way you would write Contract in a human spoken language instead encoding it in software and then having that program of law execute on a global platform Not money But it is part of this System of trust that is based on the same global blockchain phenomenon. So blockchain isn't just money People have suggested using blockchain for a number of non financial applications mostly applications related to trust one very common application is the registration of assets or ownership of tangible or non tangible things For example, and this is a big problem in developing nations and an area where blockchain can have a very large impact is the registration of title over land and the ownership of assets like homes So the possibility of using a blockchain is Because if you record something on the blockchain It cannot be modified it is immutable once recorded on the blockchain the system of trust prevents anyone from Reversing that from overwriting that from changing the past So it creates a permanent Immutable record of history in a real estate transaction that is really important that allows you to pass title of a piece of land from person to person independently While no one being able to falsify that record or steal your land through paper One of the most common forms of theft of land are with the falsification of paper You don't have to Go into someone's land with guns and take it from them if you can go to the local land registry office Brite someone to change it into your name and send the police into their land with guns to take it from them on your behalf That kind of thing can really be affected by a blockchain Other things are the record the registration and access to assets You can for example have the title of a car a boat an aircraft registered on the blockchain We were having a discussion here in the waiting room with the gentleman from the airline industry and one of the interesting Applications we discussed is the ability to record maintenance records and parts in a blockchain in a way that they cannot be modified If a plane crashes, I'm a private pilot by the way, so this is an area of interest to me But if a plane crashes One of the first things you want to do is go back and look at the maintenance records and say was the left jet engine actually Inspected after 100 hours of operation as it's supposed to be how can you tell in Traditional forms if we have that written down on paper I Could write down today and put a date a month ago before the plane crash and say look It was inspected you falsified the record after the fact you could falsify a database after the fact and Witnesses are unreliable. How do you know what actually happens a? Blockchain allows you to record the fact that the inspection happens and it cannot be modified or falsified after the fact and it Cannot be inserted in the future and pretend to be in the past So these are elements where the same mechanism that's used to create trust from money and Transactions can be used to record the truth in a permanent immutable record These are the applications that most companies are fascinated by beyond money that have the general term blockchain That's the good now. Let's talk about the bad and the ugly That same term blockchain is used to mention a lot of things that do not have any basis in fact and don't actually work What has become very fashionable lately is this idea that you can do blockchain Without Bitcoin as in blockchain is good, but Bitcoin is bad. It's used by criminals gamblers degenerates It's just money one of the fundamental Mechanisms behind the blockchain is its security Bitcoin allows you to have a system that is decentralized without the central point of control by creating a competition In which those who provide security are rewarded in Bitcoin the currency So the currency in Bitcoin is not just a vehicle for doing value transactions It is the basis of the mechanism of security and That mechanism of security allows you to have a blockchain that is operated and secured by anonymous participants whose only claim to providing security is that they submit as A promise for their security and they risk energy and They may gain as a return a reward in Bitcoin unless they try to cheat in which case they lose everything That competition that game is the basis of Bitcoin security But what that system of security allows you to do is have the system managed by everyone so that no one is in charge Here's the problem if you take away the system of reward Then there is no mechanism for punishment. If you take away the system of punishment for cheating. There is no security Blockchains use a currency Because they use a system of security that is based on market forces on game theory To use a blockchain without a currency you have to find another way of doing security And this is where the traditional institutions come in and say I know how about We assign five trusted Institutions and they validate every block on the blockchain and Make it a private blockchain where we control who has access and since those five private institutions Assign trust on the blockchain if you trust those institutions you can trust the blockchain That is business as usual that is blockchain being used to perpetuate the system of Institutional trust that has failed That has failed to scale only worse if you use a blockchain in that kind of way as a private closed system where trust is Assigned to institutions If those institutions are compromised or their keys are stolen or hacked Because you've concentrated all of that power and just a few participants that system is no longer secure These are the same companies that get hacked every Timing read on the news That someone got hacked. This is who we're supposed to trust to run these blockchains the whole point of Bitcoin's open public blockchain is through a system of currency It creates security that does not depend on any one individual or institution If you take the currency away the security model disappears to and you're back to a Ledger that is controlled by a single entity or a few entities We have a name for that. It's called a database So this is the real question you should ask how do you evaluate? the difference between blockchain and As we would say in America bullshit They both start with a B One of them is real the other one isn't One of them is used as the basis of a 12 billion dollar global security centralized economy And the other thing is the thing the consultants trying to sell How can you tell the difference between real and not real? Ask the following questions Is it open? Is it public? Is it borderless? Is it censorship resistant? Is it neutral? Can anyone access it without permission? Can anyone use it without permission? Can anyone innovate on it without permission if the answer to all of those questions is yes Then it's giving you the values that we find so interesting in Bitcoins blockchain and you can say that for a number of other cryptocurrencies and blockchains. Yes to all of those things If you can take the entire brochure that describes this thing and do search and replace and for every mention of Blockchain you can replace it with a word database and then you read it and it still makes sense You're not being sold the blockchain. You're being sold the database by a scam artist And that's the difference between blockchain and bullshit. Thank you