 Lovely to be here today and super excited to be spending this time with you all The session I want to talk about is a topic up in diving a lot into in the last six months in particular Around distributed ledges and blockchains, but don't worry. It won't be too technical First thing I want to say is that I think the word blockchain is pretty much useless That it doesn't convey too much information at all and when I refer to the word blockchain I'm really just talking about this whole space of like digital assets and Cryptocurrencies and decentralized computing systems and it's that it's it's not a correct way of using the term But I think it's the most useful way I'm going to talk a little bit about why I've spent a bunch of time diving into this work and the back story and the biases I've brought to this I'll talk a little bit about the snapshot of the sector. What have I seen about where this blockchain world is right now? I'll talk a little bit about the opportunities for New Zealand in particular, but the opportunities this technology provides And I'll finish with some recommendations So that's that that's the arc of what I'll be going through So the how I got into this work is essentially I'm a long-term programmer anyone else been writing PHP sequel things in the early 2000s a few folks and It's so a lot of technology has started paying attention to this technology as it's been emerging over the last decade So it's something on your little bit a little bit about for a long time I'm also very interested in decentralization I've spent the biggest chunk of my career building decentralized ecosystems of entrepreneurs trying to make the world better and the idea of a Technology which has decentralization baked into its very reason for being with something that also piqued my interest I Spent the last five years building a programming school and we would love to see tech as the biggest export of New Zealand So an emerging technology which might have jobs for people and opportunities for businesses which can help Kiwis have Different better exports and more high-tech exports was also deeply interesting. So that was kind of the starting points But at last year at last six months ago in this space at Edmund Helley Fellowship blockchain is one of the things that we've seen a lot of the fellows responding to a lot of the fellows stepping up and And it was unexpected. We didn't select for this. It wasn't something that was intended It's something that emerged and a lot of the philosophy of EHF is to respond to what emerges One of the things that emerged last year the last EHF was the idea about how can we build connections between what some of these Global leading entrepreneurs are seeing and looking at with this technology and the New Zealand ecosystem particularly the New Zealand government So I was funded to do three months work diving deep into preparing a report Which I'll share some of the insights from at the moment So I spent three months writing this report. It was the biggest literature review I've done since university days It was speaking with hundreds of individuals around the country and around the world People in different governments Pete entrepreneurs locally entrepreneurs globally about what are they seeing in their countries? And what are they seeing in this technology? So that's that that's how I got into this work. So this is some of the stuff that I saw The first thing is I think and my opinion is that Blockchain and distributor ledgers represent a general-purpose technology a technology that will touch most industries If not every industry if you think about how the internet has changed society in the last 30 years I think there's a fair chance that this technology will change society just as much in the next 10 years There are lots of different building blocks There's no one thing in this space if you've heard about digital tokens here are different types of digital tokens and This will be the most technical slide of the presentation But the idea of some of these things that are being built on top of blockchains They're valuable just because everyone thinks that they're valuable and the idea of an intrinsic token There are things which are valuable because they let you do stuff They let you use this this code or this token to do something that has value to you There are others which are valuable because of they give you returns You can use them to vote you can use them to get future things in the future And there are other ones which are valuable because there's something outside of the technical ecosystem Which backs them up maybe you can convert 20 tokens for a car or whatever and these are asset back And so this is the the the main point of this is that there's lots of different things And when you hear the word blockchain It conveys no information that you need to dive deeper and understand the nature of what you're talking about to have a meaningful conversation There's tons of good things happening in the country So one of the the highlights for me was that the legislation in New Zealand is mostly up to scratch When you look at what other countries had to do when dealing with the technology is we have to rewrite stuff Which never thought that we'd ever be dealing with something in this nature But particularly when you look at the financial markets conduct act and the FMA they have in their mandate They are they are meant to focus on innovation, which means they've been paying attention to this quite early on They also have in their mandate the power to give people exceptions So if you went to the FMA and said hey, you've got some rules about raising money Which don't really fit because I want to do something different They have the power to say oh, let's bend those rules Then they don't have to change the legislation itself to do that when I spoke to them no one had asked for that exemption But they have the power to do it and if you look at the way I did and lots of other places But the main thing is legislation. It's good It needs a few little tweaks here and there particularly around GST in particular, but people are working on that When I spoke to blockchain companies the biggest pain was access to bank accounts It's that if I mentioned the word blockchain banks won't talk to me and it takes lots and lots of talking and talking to the right people To get something which is a productive banking relationship. So it can be done. It's just quite painful The reason for that is very much around when you look at when people in the banking sector or people in government First heard about this. They heard about it through money laundering financing terrorism Silk Road buying drugs online with fake money kind of things and that's when most people heard about it And it's a perception that lingers But the the most interesting thing I found was that if you want to launder money Digital currencies are some of the worst ways to do it And when you look at the reports of people who analyze money laundering and whatnot It's way down the bottom below like the banking system Which is much easier to do things in and when you talk to people in this space They get really excited about people using these systems because you can do phenomenal tracking Say I have a bunch of stolen Bitcoin and you know that I stole them You can do analysis to see if they go through lots and lots of people but all end up in Yosef's pocket, you can see that you can't see that in the existing financial system So there are huge opportunities for making financial world safer using this technology But overall the biggest thing I found was that New Zealand is a fair way behind the rest of the world That most there are many other ecosystems which are more advanced more stuffs happening than we are There's some good stuff happening in New Zealand. There's three or four really big outliers centrality here is definitely one of them and there are people doing great stuff, but as a system we're falling behind So now I want to talk a little bit about the opportunities So from New Zealand's point of view if you look at the rate that people get paid in blockchain Companies the amount of jobs and the increase in those jobs. It's going up and there's huge demand So the idea of if Kiwis can get skills to deliver in this ecosystem that has a significant impact on the country overall In particular if you can get those jobs in regional New Zealand that will have a much bigger impact And I want to shout out for epic Westport who essentially want to make Westport the blockchain hub of New Zealand And these are people behind the epic center in Christchurch and they're really seriously saying how do we help people in our local economy? Move from the jobs that they have available now to some of the fastest best-paying and most disruptive jobs that are emerging And I think that that intervention is phenomenal Another big one is that if you're a New Zealand company and you want to raise two million dollars to ten million dollars It's really hard. We're okay at the early stage stuff bigger stuff some sort somewhat, but that particular bracket it's really tough and this what's happened in the blockchain ecosystem is that it's radically Disrupting the way companies can get funded if you're addressing a global issue And so you can see companies get Access to funding that is much harder to get and I think that has a phenomenal possibility for impact in this country And I also think that you're seeing a lot of that There's significant disruption in the way companies get financed overall and in some way what's happening here is a hint of What the future could look like If you look at the work that's going on around security tokens at the moment and people saying actually in a couple of years You could say there's an exchange with 500,000 of the best companies in the world being trained to trade it on it and if you think about what Stock exchanges would look like with that kind of volume and a purely global space not controlled by any one nation And that's that's very disruptive when you think about global international trade Shouting out to Paul Callahan and the strategy of making New Zealand a place where talent wants to live I saw a few examples of companies moving to New Zealand because the regulators were easier to deal with in their home country Not many and I think that if this were if more people knew how easy it was to do this kind of thing in New Zealand And it got easier There is a significant opportunity of just bringing companies that are already set up here The other thing about blockchain companies is that many of them are more comfortable with remote teams than many other sectors Which means that even if the company isn't based here if a if an important person in that company is and they want to build a Local team that can have a very significant impact on jobs taxes a lot of things in the ecosystem So attracting companies to New Zealand. I think it's something that's pretty there's some pretty easy wins there Now I'm going to get into the more I guess powerful opportunities of the technology overall so if you look at the idea of Code as law so in if you look at the legal system and I break the law There's a huge amount of energy and resources and efforts that goes into noticing when I break the law doing something about it discouraging people to and dealing with that consequence in the blockchain world you can think of it as you can build it a Technology a technical ecosystem where it's impossible to break the law within that ecosystem You can break the law on the boundaries But within it you can stop people breaking the law and by law I mean the rules that the group establishes So if you think about I can go and break the law here and bad stuff can happen But in a blockchain world that can't happen. The only thing is the whole system fails So I think there's a very powerful way to think about this as some people who want to have rules They want to have rules about how things are listed on their exchange or how people exchange or all that kind of thing They can agree on those rules. They can codify those rules and they can make it virtually impossible to break those rules and If you and that I think has very powerful ramifications because right now you're getting into the heart of how do people collaborate and how do they collaborate to build governments Build companies do significant projects together In particular so an example at the moment in Australia is the CSIRO and The NDIS national disability insurance scheme. They're running a pilot with actual people where they're saying hey people who have Disabilities and get funding from the government to purchase services We're going to give you money on a blockchain and we're going to give you money where we can program that money and can control What you do with it? We're not going to let you spend on anything We're only going to let you spend on certain things if you just think about the use case of governments where they're saying I want to give you money for a particular thing and That's it and the work they have to do to make sure you don't do something else with it The work they did a track that you did the thing you said you would the administrative headache that that is that's a substantial Pain point and the idea of building a system where you can give someone smart money And when you give it to them you can say here's the thing what you can do with it Here's what you can't you can agree on the rules of the system together And you can do that again and again and again across multiple domains One example I saw was rate rebates in New Zealand So the idea of if you're on the pension and you have to pay rates the government can give you a rebate for rates But you have to pay it first. You have to get a receipt. You have to send it in It's quite a painful system to deal with you Just give someone the money and have the money come back to you if they don't spend it and only that and spend it In certain ways the idea of programmable money. I think is one of the the most exciting long-term opportunities All right, this is a picture of a fork So one of the most interesting things you'll see in the blockchain space is that if we've got a community And we all agree on a set of rules and some people in that community don't like those rules They think they're crap rules. They'd like different rules They can essentially take a copy of the whole system Come over here Invite some people to come and play with them and make new rules together and they can do that very cheaply Well, not very cheaply. There's a cost to it. A lot of it's a social cost But from a technical point of view, it's quite a cheap cost So if you think about in New Zealand, if you disagree with Parliament, you have to do lots of fighting You have to do lots of arguing of people who disagree with you to try and get to some agreement so that we can keep a set of rules all together and That's that's useful in some extent. You don't want to make it completely free just to go and start your own country and keep doing things But the possibility where you can say countries are used for stuff, which we all have to agree on But stuff that we don't all agree on we can actually make little micro systems and we can have differing opinions And when you disagree in one of those opinions systems One of your opportunities is to take a copy, invite some people to come and play and do something different So you can get a plurality of responses So that's forking and I think that's a very powerful opportunity that this technology provides and it's one of the reasons why I think that One more thing I'd say on this is that when you look at governments and you look at monetary policy It's kind of expensive to change It's expensive to take risks with if you are the Reserve Bank of New Zealand You're not going to really take radical experiments on different monetary policy But if you are acting like a reserve bank in a system where you're creating things that are like money You can be take radical risk You can experiment a lot and what we're seeing in the blockchain space is Thousands and thousands of experiments in monetary policy in governance in how do you get people to agree together? And I think in that way you can see the evolution of society is starting to speed up All right Getting there. Okay. The other thing. I think that's really powerful here is the concept of monopolies So if you look in Our economy There's a lot of businesses where they essentially say my strategy is to build a monopoly something That's very hard to compete with I want to be a Facebook I want to be a Google I want to be something which has dominant market power and I want to exert that power to extract profits from the system and On one hand that sucks for lots of people You start to have a system which isn't as good as it could be is it could be because of these monopolies But on the other hand, I kind of don't want to have to have a hundred networks to talk my friends It's really useful to have one network So I quite like that there's a monopoly on protocols without having the power to extract things from it And I think that the trend you see in the blockchain space is saying that actually it's not okay to build something like Facebook It's not okay to build something which has a massive influence on lots of people and they have a take it or leave it Response to it instead. What is okay is having a system where lots of people decide together What is okay and how things should work and that idea of having ethical monopolies which that's take some of our Political theory and bring it to our economic world. I think that's another deeply exciting thing about this technology All right final thought of this section. So the idea of who sort of tragedy of the commons Cool, so if you look at the origins of that in the 60s someone wrote a paper Pardon wrote a paper about the tragedy of the commons And it was it was really interesting because there was no data behind it There was no evidence base that the tragedy of the commons was a thing But I had a huge amount of resonance with people people read the argument and said that makes sense I can imagine lots of people exploiting a commons and so on and when you look at the work Eleanor Ostrom did in the 2000s around actually how do people really work in commons? There's lots of processes and technologies people used to govern a commons effectively and fairly and there was lots of things that emerged But most of them emerged in small-scale groups of people who could meet and see each other regularly because the main Strategy if someone's exploiting a commons people would turn away for them They'd say I'm not going to collaborate with you because you're not doing the right thing They'd have to see that they were exploiting it. It worked really well in small groups It was also always unique. There was no one pattern that everyone worked Eleanor Ostrom ran around the world saying no panacea No panacea and so I think that the idea of how can we use this emerging technology to start to govern commons as together? so that we can actually manage big global resources where we all benefit from them and we can reward people who grow the value of them and we can disincentivise people who detract the value of them and I think that combination of The work around monopolies and decisions and forking and so on to me That's the most exciting potential I see of this technology and it's why I would say that it will be as impactful as the internet is Okay, so a few recommendations in the report. I made a bunch of recommendations for government which probably aren't that interesting for you But I can talk about that afterwards if it is so this is recommendations for change makers So the first thing is if you're thinking about using this technology and you're telling someone about the idea The blockchain part should be the least interest in part of what you're talking about It's about solve a problem. That's worth solving solve it for real people and just do something useful and you can get a lot of value from using this technology But it's not it's just too many people latch on to it and they try and rode the coat ride the coat tails of all It's popular it's big and they use it to get attention that isn't deserved So do something useful first and don't worry about the implementation too much It's if you realize that people have a big allergic reaction to this word and this whole space There are lots of people have seen all the hype and all the stuff which isn't good and they start to write it off quickly So if you're saying particularly if you say I'm going to do stuff. I'm going to do this and that That's not a good strategy in general, but in this space. It's a really bad strategy So don't really start engaging with people until you've got something to show them and so definitely show don't tell more than you would otherwise I think it's really important particularly in this technology to bring more diversity into the room and to bring more attention to people who are excluded from the more high-tech parts of society that if you look at the world of You know people who are connected or comfortable with technology that technology is moving faster and it's moving in Radical ways which could transform society And I think it's the responsibility of anyone who does something in this space to actively do everything They can to bring as many people as you can with them I'll change makers so build stuff that matters. You're doing that anyway. Don't worry But good luck I do think there is value to look at here and it's it's really worth dying deeper into