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Blockchain: the next generation internet.

Blockchain: the next generation internet.

The Blockchain trade organisation, the CDC,  knocked the ball out of the park with the blockchain summit in Washinton DC on 3rd March 2016. The speakers and invited guests delivered their message in a relentless display of technical knowlege, enthuasiam and insight, coupled with the occasional eye on the thorny issue of how best to deal with the regulators, most of whom have not yet decided whether or not they are for or against the whole idea.

The main themes were; that blockchain digitisies assets allowing them to be transferred across the internet, Public vs Private chains, and the techniques increase the speed of capital in the same way that the internet increased the speed of information.

The summit was introduced by Perianne Boring, who single handedly has turned the idea of a lobbying organisation into a serious trade body, in an area of incredible vitality, within the space of a year or so. She was followed by the author Don Tapscott who established his credentials as an internet soothsayer, then went on to explain in his view how blockchain heralds the second generation of the internet. His vision of the future, based on his considerable insight into future interent over the years, led him to a bizzare video of swarms of birds with accompanying music, which signified the power of the crowd to govern their own affairs.
We kicked off with what promised to be the highlight of the day, a panel on smart contracts, starring the brilliant Vitalik Buterin, founder of Ethereum, Jerry Cuomo of IBM, Jeff Garzik founder of Bloq, Yorke Rhodes of Microsoft, Mark Smith CEO of Symbiont, chaired by Sean Murphy of the global law firm Norton Rose Fulbright.

The panel started with definitions, Vitalik explaining that a smart contract is a computer program that directs a digital contract. He felt that most smart contracts would become standard form, Jeff commenting that there will be libraries of contracts which are insurable and verifiable, in the same way as lawyers use precedent banks at present.  

The debate covered the two big areas of contention; are smart contracts legally binding, and the public vs private blockchain issue. Mark's company Symbiont model the smart contract in real or 'wet' contracts which can be lodged in the blockchain, thus importing an element of legality.  Jerry told the audience about a technique to migrate current business onto blockchain known as the shadow chain.

Mark explained that the regulation of financial transactions are better found on private chains as each participant in the chain has to be regulated, something which is impossible with the prolifferation public chain miners. Vitalik thought that the speed of private chains where 100,000 transactions per second can be processed was significat compared with 3 transactions per second on the bitcoin block. Jerry preferred private chains for confidentiality and Mark drew a powerful comparison with current use of intranet vs internet where privacy is required. Vitalik concluded by saying that there will be range of solutions from fully private, partially private through to fully public in future.

The panel then gave expamples of potential use cases, which varied from flight delay insurance, back office functions, supply chain  and catastrophy bonds. Most of the audience would have been happy to listen to this authorative panel all day, as the ideas and experience flowed across the stage.

Adam Ludwin of Chain defined blockchain as a strategy to reshape markets, explaing that blockchain creates a new medium for digitising assets, allowing them to move across the internet. We then settled down to a panel that considered Law Enforcement through education which considered the current Apple v FBI case and concentrated on regulation of payments mechanisms. The next panel also considered Fin Tech applications, where Bill Hartnett, MD of CITI pointed out that 100's of millions of transactions happen every day on platforms that are 40 years old. Darius Jones of USAA explained how in his experience, people were concerned to put private material onto a public blockchain.

An interesting contribution was made by Blythe Masters CEO of Digital Asset Holdings. Even in the post Enron atmosphere, Blythe still seemed to feel that continued regulation was stifling banks from creating new jobs. She missed the irony however that one of the drivers for the creation of bitcoin was mistrust of major financial institutions following the events of 2008.

An interesting panel on consumer protection focussed on the balance between increased regulation and protection for users. It was followed by a fantastic crystal ball gazing excercise by 'Thought Leaders' who were encouraged to think about how blockchain can enhance Industry Government and Humanity. This lively debate compared by CNBC host Brian Kelly ( who it turned out had become so interested in the topic that he had written a book on it) was dominated by Sam Cole of the bitcoin mining firm KnCMiner. He explained that the power of the public chain was to allow users to see what had happened on a plaftorm that does not sit behind a firewall, something that the proponents of private chains for Fin Tech seem to have conveniently forgotten.

Jim Robinson of RRE Ventures favoured private environments for multi party transactions and also spoke of the interesting concept of partitioned identity, as consumers become reluctant to share all of their personal information where it is patently not necessary. Matthew Roszak, founder of Tally Capital gave a high level view of the landscape, pointing out that Oracle are probably moving into the space as blockchain is essentially a super db application. He explained that mulit billion $ savings will encourage private chains initially, then he predicted that public chains will be used to hash information from private chains, to ensure auditabilty.

The session was concluded by a 'dog and pony' show by Dr Arvind Krishna from IBM who ran through an enormous amount of material in record breaking time. He covered use cases, the size of the market, benefits in supply chain, international finance and the real advantages of adopting the technology. His conclusion was perhaps the most asute of the day opining that 'these techniques increase the speed of capital in the same way that the internet increased the speed of information' a conclusion that perhaps explains why everyone here was united in one belief, that blockchain is in fact the next generation internet.

Post Script

In an inciteful and hard hitting article on Coinjournal dated 9th March by Ian Demartino entitled DC Blockchain Summit debated regulation but ignored the future, the failure to give a platform to Brian Hoffman, the developer of OpenBazzar came in for severe criticism. The organisers of the event were accused of 'chumming up' to the regulators, while the development of decentralised apps brigade are developing marketplaces that defie regulation, continuing the spirit of independence that drove the initial development of Bitcoin. A fair point you may think!

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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