Blockchain, the technology you've probably heard will change the world.
It was all over the news in 2017 as cryptocurrency prices soared.
>> The digital currency has exploded in popularity this year.
>> But then, the bubble burst.
>> Dangerously close to going back below 4000.
As cryptocurrency cratered,
the technology powering them fell out of public view too, including from my own.
But its true believers kept the decentralized faith.
>> Similar if not more powerful of a change than the internet,
in the way that we organize ourselves.
>> And in the background, some major companies invested heavily.
>> Blockchain is poised to change everyday life for
the positive for all of us for consumers.
And the evidence is not gonna happen, it's happening as we speak.
>> But its skeptics double-down.
>> Blockchain, not bitcoin, it's an oxymoron.
It doesn't make any sense, it's putting the cart before the horse, or
something like that.
So is Blockchain gonna change the world?
>> Or is it more of a solution in search of a problem?
This is think again, with me, Andrew Stern,
where I take you every step of the way as I dig into compelling, complex,
or controversial topics that make us wonder, do we need to think again?
All right, to start,
I think I need to take a minute to explain what exactly a Blockchain is.
Because to the uninitiated the concept can be pretty foreign.
A Blockchain is, at is simplest,
a ledger like an accountant would use to keep the books.
It records transactions, which can be monetary like buying or
selling goods, trading currency, or any other transaction you dream up.
Supply chain tracking whatever.
But instead of writing the transactions down in a book,
a Blockchain stores them digitally.
Every transaction in this digital ledger has a unique timestamp, and at a pre
determined interval—say every ten minutes, the ledger turns the proverbial page.
It locks in all the transactions from that time period, wraps it up into a heavily
encrypted digital block, and then attaches that block to the one that came before it.
The ledger contains every single transaction that ever came before it,
creating a chain of blocks, hence the term Blockchain.
But instead of storing that data in a normal database that's hosted by one
company or one computer, the Blockchain is decentralized.
A lot of computers around the world host exact copies of the same block chain.
And when a new transaction is proposed,
each of those decentralized computers has to recognize,
verify and record that transaction for it to become part of the Blockchain.
And in most Blockchains you can never go back and
alter or delete previous blocks, it's designed to be tamper proof.
There are other more technical aspects of a Blockchain, but in broad strokes,
that's what it is, an immutable, decentralized digital ledger.
So is this concept an actual disruptive technology?
Or is it more hype than substance?
To answer that question,
let's start by hearing from one of the leading advocates for the technology.
>> My name is Sam Cassatt, I'm chief strategy officer of ConsenSys.
>> ConsenSys is the largest app developer on the Ethereum network,
which is one of the world's two largest Blockchain ecosystems.
It's located in the hip former industrial neighborhood of Bushwick in Brooklyn.
And Sam is a true believer in the technology.
>> In our society, we pay a lot of money for trusted intermediaries, right?
Because we need to be able to trust that when we send a transaction,
when I sign a contract, when I do anything of value,
that it's going to execute as planned as we agree upon as a society.
>> He's saying that instead of paying banks or lawyers to provide that trust,
Blockchain could provide it instead.
If everything is truly decentralized, encrypted, and tamper-proof,
why not cut out all the middlemen and save time and money in the process?
>> It could be something in trade finance, where I'm sending some goods on a ship.
Someone else is financing the goods on that ship,
someone else is receiving those.
We ended up with a situation where we need to trust all of that data,
insurance companies, financiers, shippers, everyone needs to trust that data.
>> In theory, if all those stakeholders share one common system of record,
they can each trust the data.
But beyond trust, it could also bring down cost for everyone involved.
>> For instance, when I pay a bank to send a transaction for
me I'm paying for skyscrapers in Manhattan.
But when I have no intermediary,
there is no extraction of value as something passes through it.
And, in general, that makes us all wealthier as a society.
>> In his telling, it's not just pie-in-the-sky,
they wanna remake the entire financial system though.
Every consumer good we purchase relies on a complex global supply chain.
So making this faster, cheaper, and more transparent could benefit everyone.
ConsenSys wants to take an ax to middlemen everywhere.
Things like buying a house wouldn't require paying a title company tens of
thousands of dollars if property transfers were on a Blockchain.
Musicians could cut out ticket brokers by putting concert tickets on a Blockchain.
>> Fortune 500 companies are realizing that you can take that same technology and
apply it to their business problems and reap those same benefits
that you see in the public network in their private contexts.
>> And he's right there,
a ton of companies have been experimenting with the technology in pretty huge ways.
Walmart is using it to track things from lettuce to pharmaceuticals to improve
safety.
Anheuser-Busch is using it to ship its beer more efficiently around the world.
Even my corporate overload Comcast is using it to better track advertising
efficacy.
I mean just a few weeks ago Consensus 2019, spelled with a 'us' not a 'ys',
which is the largest Blockchain conference in America, invaded New York City for
Blockchain week.
It included heavy hitters like Deloitte, IBM, Citibank, Microsoft and Amazon.
I gotta say it's a lot swankier than I would have imagined.
The Hilton was four full floors of convention center,
all of which is rented out for this conference.
>> But now that we're raising the bar.
Accelerate and help our societies reach the full potential of web 3.0.
>> It's kind of hard to imagine this many companies are betting on a technology that
has no practical use.
And Sam would agree.
>> As time goes on I think you'll see more things popping up in the consumer
sphere that make things cheaper, better, faster which is what consumers want.
Once you get it, most people have an 'ah-ha!' moment that
says 'wow, that's going to change how everything works.'
>> All right, so block chain is gonna revolutionalize basically everything?
I mean, Sam is obviously advocate for blockchain and
understandably so: his business builds Blockchain solutions. And he's right.
Our society does spend a lot of money on intermediaries to provide trust, but
is Blockchain the right way to achieve that, or is his faith misplaced?
To dig deeper, I wanted to talk to someone who understood Blockchain, and
who was slightly more skeptical.
That took me to Texas' capital city of Austin to speak with Jimmy Song.
He has a reputation in the Blockchain space as being a bit of a firebrand and
one of its most outspoken antagonists.
>> I am a programmer, an educator, an entrepreneur in the Bitcoin space.
I think you can describe me as a bitcoin maximalist and a Blockchain skeptic.
I think the most popular article I've ever written is Why Blockchain is Hard.
And I go on to describe from a technical perspective why it doesn't
really make sense for almost anything other than money.
>> It does seem that there are a lot of really big enterprises with names
people would recognize who are leaning into Blockchain in a pretty big way.
Do you not see any utility in blockchain for enterprise?
>> I don't see any use by enterprises.
They just sort of see the buzz word and imagine a world where you can X Y Z and
they get sold on that vision without knowing any of the technical
underpinnings, and essentially, what they're selling them is a square circle.
It doesn't make any sense.
Say you create something that's semi-decentralized using block
chain technology or whatever, I will be able to do that faster,
cheaper, easier, more conveniently, be able to iterate more often
With a centralized service that does the same thing.
>> Healthcare is a good example of what he's talking about here.
Putting medical records on the blockchain, could increase security and
patient control, but decentralizing everything is tedious and expensive.
It would be a lot cheaper and easier to just update the hospital IT systems.
>> It's rather unfortunate that people are so hyped on this technology.
What can we do with blockchain?
What can we apply this to that might work?
Instead of what problems do we have and how do we solve it?
That's the right way to actually do innovation
What's hurting?
How do we solve it?
I hate to be that guy but I'm the one saying the emperor has no clothes.
It's a technology stack that works for a bitcoin because it was
designed that way for everything else,it doesn't make any sense.
>> All right, so Jimmy is obviously out on blockchain for business, but
a lot of companies seem to disagree like technology giant IBM.
I thought it'd be pretty valuable to see what a major enterprise has to say about
the prospect.
And it turns out IBM has an entire blockchain division which is based in
Raleigh, North Carolina.
So I traveled to the tar heel state to talk to the VP in charge.
This is Jerry Cuomo, he's- >> The vice president
of Blockchain Technologies at IBM. When I first saw blockchain out there,
it was like the second coming.
We had AI innovation, cloud, mobile, IoT.
What was next for transaction processing?
And then came blockchain.
And I said, that's what we have to be doing, folks.
Finally across the board people are hearing what else blockchain can do,
it's not a one-trick pony, right?
It has multiple benefits.
>> I've also heard in some circles
that blockchain is a solution in search of a problem.
>> I do think there is some skepticism out there, but look at the evidence,
you'll see it's not coming, it's not going to be, in many places it is.
We have over 120 live networks producing blocks every day.
The thought is very simple.
Its that a group of companies working together can produce a better
outcome than any single member of that group working by themselves.
>> He's talking about things like banking consortiums that wanna move money around
faster or supply chains that with multiple stakeholders.
>> Where Blockchain really helps the supply chain,
is when there is tension in the system.
So how do you resolve disputes?
I ordered a million widgets from you, it was shipped by her,
you're saying where's your money, I'm saying where's my parts there's a dispute
resolving that dispute without blockchain is extremely cumbersome.
Lots of reconciliation.
If we have a common view, if we're all,
sharing the same system of record, that goes away.
>> According to Jerry and Sam from ConsenSys from earlier,
examples like this show blockchain is the real deal.
Jimmy Song would say that example, and those like it, proves a need for
new technology, sure, but a centralized solution would be faster, cheaper,
and better than a decentralized one.
Now, I don't have the technical acumen to tell you who's right, but
what I can tell you is that there is a lot of companies betting Jimmy's wrong.
So where does that leave us?
>> Will we realize that full vision that I would compare to the internet,
the significance of the internet? It's hard to predict the future,
but I am betting my life [LAUGH] on the fact that it's pretty close to 100%.
>> In many ways I don't really understand what they are trying to do,
I don't think they do either to a large degree it's just sort of throwing
buzz words up the wall and seeing what's stick.
>> As we progress in digitizing the world we have seen some of the gremlins come out.
It's things like identity theft, counterfeiting and all of these things,
blockchain will be remembered by bringing real credibility and
trust to the digital age.
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