hi and welcome back to Mingis on Tech I'm Ken Mingis executive editor at computer
world I'm here with senior reporter Lucas Mearian also from computer world
today's big topic is blockchain is it the overhyped crazy technology we think
it is where's it going for 2019 we're gonna find out - stick around
okay so Lucas thanks for being here happy new year um you know we talked
about this about a year ago that the 2018 looked like it would be the year
that blocked change the distributed ledger technology that hopefully if
you're watching this or listening to this you know what it is that 2018 would
be the year that it sort of breaks out and finds its way into a variety of uses
so I wanted to first ask before we get into what's coming for 2019 did it break
out in 2018 yes and no yes no oh a definitive yes and no all right okay and
I'm sticking by that back okay so proof of concepts were flushed out you had
things like Walmart's food chain or my stay at Walmart IBM collaboration for
poutine which tracks food from farm to shelf they expanded the use of that they
also asked their suppliers get on board in their blockchain and stop putting
their data into their their blockchain database so that they can track all of
their suppliers food again from farm to shelf so things like e.coli infections
that have come from certain lettuces but I remember the big the great lettuce
scare of 2018 right right and it's continued actually we're still seeing
even in recent history incidences of e.coli being transferred via lettuce and
they don't know exactly which farm this is coming from because they don't track
it that's precisely known with blockchain you would be able to do that
that's one of the big benefits isn't isn't the point of that that by having
all of the suppliers put the information in about the produce where it's coming
from that when you do have something like like the e.coli breakout you don't
have to shut down the entire system because you can track exactly where the
bad stuffs coming from pull that out of the system and then everything else goes
on exactly so you have a the serial number let's say on the put specific
lettuce package then wasn't then happen to spread the e.coli you can track that
back to the farmer which is something we can't do today okay we can just we can
give a regional it takes quite a bit of investigation to figure out just the
region where the lettuce came from as a matter of fact but this
creates an immutable locked-in record of where each and every shipment of a
product comes from if the diamond industry is using it as well the beers
has created a ledger as wealth attract diamonds for a number of reasons not the
least of which is to deter blood diamonds so diamonds that are mined by
people were basically a slaved okay so so anyway so back to Walmart so Walmart
has obviously embraced this and I think if I remember your story correctly the
suppliers are supposed to be on board with the blockchain by September
September 2019 so this year yeah okay so they're really having to move quickly to
get on board if they want to stay in Walmart's system they're all in and the
executive at Walmart who is really pushing this basically said he had a
religious experience about blockchain and he at first was very skeptical of it
but asked after investigating it and testing it and various proofs of proof
of concepts he went all in on it and he believes in it 100% as a lot of other
people do today well yeah you know I remember we've written about this
extensively the whole idea of and again IBM IBM does seem to be a big player in
this yeah with their work with Maersk in terms of supply I'm not supply chains
but shipping shipping worldwide shipping and in in trying to basically figure out
and again it's it is sort of a supply chain it's where is this particular
product along the path from from wherever it's being shipped to wherever
it's supposed to go and how do you document that between different you know
customs poetry orders nations and all of that can be provided on that on the
blockchain and everybody that needs to know can then see that information at
the same time right and that's huge because today is a very manual process
believe it or not there's still paperwork involved in a lot of these
ports of entry for shipping containers so you literally have a person with
example horn signing off on paper puppeting says 21st century like right a
guy with a clipboard checking on I don't know
pallets of produce your manufacturer right and you're waiting on parts to
come in that help them to allow you to manufacture cars and you don't know
where those parts are yep in real time this helps do that I that's one of the
predictions for this year is that these pilots
we'll go live so if the food chain or the cargo shipping manifests that are on
blockchain we'll actually go live this year okay it's interesting too and
you've been written about this one of the things in 2018 that I thought was
was sort of out there but apparently it worked was in West Virginia
when I I guess they were looking at a way to allow for voting to take place
millet was it military yeah absentee vote absentee votes but
militant focused on military and their families okay and and and so what was
that and and how did it work since you did write about that I'm just curious
yeah it was a mobile application that allowed you to create a digital ID
identification using blockchain it's encrypted so the information cannot be
seen you hold the private keys encryption keys to that and you can you
also control who has access to the public keys ie who can see that
information this application from a company called votes vo ATZ enabled
people overseas to vote via absentee using this application so they download
the application they verified their information with the government and once
that was done they now had a was essentially a digital universal digital
identification they could use to vote so they pick up the phone and they the
application they have a list of candidates they just like those
candidates had send and the the people controlling the voting in West Virginia
Secretary of State's office yeah I'm trying to think of the individual I
don't think it was named yeah but his office you know his office then can
approve that and the votes are counted does the app the one that's on the you
know that you used to set up your identity use biometrics like face ID or
thumbprint to guarantee that you're you and then that's attached to the sort of
the ID that attach to the voting that's exactly that's part of it is they're
counting on the biometrics to allow you so if somebody steals your phone
they can't replicate you by either using the inside face ID or the thumbprint in
order to get into your phone to use the application because that is one of the
layers of security so this is not gonna be a way to stuff ballots sorry
ballot stuffers hi okay in and then you know excuse me before we
get into 2019 you know I you and I have talked about this in terms of looking at
the whole cycle because you know a couple of years ago his blockchain
really began to emerge I think there were predictions that it was gonna be as
big as the Internet right right in terms a big yeah they the huge hype phase and
you know you had written a story recently about blockchain what's it good
for you know there's a lot of disputes now
that maybe it's not going to be quite the tsunami of change that people were
expecting and I know that Gartner is now saying that it's in terms of the hype
phase and technology and this this happens with technologies in general
when they first arrive but where is it Lucas now let me show you on the graph
enlighten me please they we are now currently going into the trough of
disillusionment yes at the bottom which I love the idea of a trough of
disillusionment I I you know it's technology it's gonna be hyped and then
it's gonna crash and then it's gonna come back and finding somebody will
figure out how to make it work and eventually we will go up the slope of
enlightenment yes and then to the plateau of productivity productivity oh
yes so if you're hearing a lot of mixed messages about blockchain right now you
are you know there are mixed messages out there it's being used in a variety
of ways as proofs of concept right companies are embracing it IBM is it sa
P as well I say P Microsoft I mean there are dozens of clocks chained as a
service is now becoming an offering so that companies can sort of test it out
and see how it might work with you know their systems and processes in fact one
prediction is that Facebook this year will enable a cryptocurrency if not
Bitcoin some only T to purchase things on the internet so on Facebook coin
that's right something like that okay the prediction that's one of the
predictions all right so we'll be back in a year to see a Facebook actually
creates a cryptocurrency using blockchain and like I say I can't quite
imagine that but maybe I'm just disillusioned you know okay what else
for 2019 do we think we're looking at in terms of blockchain layer two protocols
so right now Bitcoin and other block chain based cryptocurrencies and
even some of the private or permission block chains are not a very efficient
they're not fast because you have proof of the scaling issue right it's a
scaling issue because right now you have things like proof of work this is a
method by which you verify that you are the who you say you are and that this
transaction has taken place you've submitted this information in it's
accurate and verified and that takes time because everybody well at least a
majority of the people on the blockchain the ledger have to approve it right and
that takes time so it's a very slow process so the idea is to offload a lot
of the data associated with that to a second layer so sort of a second
messaging layer or could be even a database where they put that information
so it doesn't clog up the pipes up the blockchain almost like a bypass valve
exactly that's exactly what to do is you take the deed coming in it's verified
but then it's moved off so that you don't have to deal with that massive
information on the actual ledger so the original blockchain stays intact
the information stays there but the the identity part of it sort of gets shunted
off to one side so that that long process of having people weigh in and
say yes I'm me yes you you doesn't slow down the the underlying process well the
verification still takes place in the blockchain it's the data that's
offloaded because it has to be replicated so remember that every single
node on a blockchain has the same information right and exponentially that
builds over time so if you have a thousand nodes each of those nodes
recording that information obviously the amount of information that's going to
transfer between them is going to grow exponentially over time so they're
offloading that data once it's been verified okay so it doesn't slow it down
Bitcoin is looking at something called the Lightning Network aetherium the
liquidity network virtually all of the organizations that are currently
operating blockchain cryptocurrency networks are looking at some way of
increasing the scalability scalability and efficiency yeah okay so
interesting you know back to the gardener think for a minute after all
the hype and then then you know the sort of fall off and people wondering is this
gonna be you know a real technology you do see a lot of companies that are
trying to work out the various problems that have come up and that's around
scalability and right it can make it work I think what most of the experts I
spoke to for this article are saying is the hype is dying and this year it's
gonna be a lot quieter and what's going to happen is work behind the scenes to
make this a reality to get systems in production so the companies governments
that another prediction is that one of the g20 nations is going to back a
cryptocurrency with fiat currency with real money belong with real money behind
it so similar to one the US was on the gold standard and our money was backed
by something today we don't have that we have the money is back to fire god we
have the assumption that it may and it's actually worth something and that's
pretty much exactly and that's currently the only thing that backs Bitcoin or any
of the crypto currencies the supply and demand there's only 21 million bitcoins
to be here that can be created and so the number as the number the wind only
price it goes up isn't that in that sort of behind the the big Bitcoin crash last
year that because it's not really backed by something tangible the value of it
depends on the assumption of everybody who has it setting a value on exactly
it's extremely volatile I mean went from 20 in almost $20,000 Bitcoin per Bitcoin
Dante I think it's 4,000 today so he fell off a cliff out yeah and a theorem
has seen similar youth either or their cryptocurrency has seen similar kind of
rollercoaster a lot more stable but but it's been our new ball will ride as well
okay this would stabilize it because you're actually putting something behind
you're saying this has value this is what the value is right okay and then
you know one of the other things that was interesting I think in 2018 and this
plays into what's coming for 2019 was this idea of using blockchain to sort of
set a personal identity right you know that you can you can somehow create your
own sort of almost like a no tie you're you you can prove you're you and
there are a lot of ways that this this could work in terms of like job hiring
HR things like that is that is that does that seem like that's gonna be a reality
at some point even if it's not quite for 2019 even if it's not Universal we're
already seeing instances of this for example if you can get a copy of your
diploma from MIT using using blockchain technology and it's directly to you you
can do it now you'll go to enable that now basically what you're doing as I
said with the votes application is you're creating your digital identity
you hold the private keys the institutions that allow you to input the
data let's say your bank for example you have so much money in the bank the bank
verifies that but now you allow the information that you want to go out to
go out you don't you they don't say let's okay let me doing a mortgage for
buying a house a mortgage or car loan you may need a certain amount of income
in order to purchase that car for example yeah so they'll say do you make
more than $60,000 a year well you may make eighty-three thousand five hundred
dollars a year but they don't need to know the exact amount you make all they
need to know is that you make sixty thousand or more the bank information
can be automatically verified without giving out any additional information on
that and simply you click a button and the what's called a smart contract in
the blockchain it's bit of code that automatically executes says yes he makes
sixty thousand dollars or more cool and you're verified so I'm gonna go buy a
car now what so I get it that what it does is it basically allows you know you
just you the individual who has this you know blockchain self-identity to set the
minimum threshold you don't have to give away all the information that a bank
might have about you whether it's buying a car getting a mortgage doing a real
estate deal whatever it's just the amount of information that's necessary
for that to take for that deal to take place and go to completion exactly and
there's one the the sovereign foundation is one of the entities that is working
to create this and they've partnered with a bunch of other companies around
the world in order to create these sovereign identities because obviously
need the institutions behind this that have your information have your
sensitive data to be put into this database that you then control you have
the private encryption keys to it you can offer up the public encryption
keys isn't this something - that's also playing or being looked at in healthcare
yeah I think about this so back in back when the four Affordable
Care Act was put in place 2001 and 2011 yeah the they required that healthcare
organizations create electronic medical records right so that all your data
could be online it's not really shareable all that shareable right now
but that'll be a whole different topic yeah between institutions but yeah that
so the information is out there now imagine that if it could be encrypted
hand it to you as an electronic record that only you control run so you want a
physician at a different Hospital say a specialist to see that information you
control access to that sensitive information that is yet another use that
could be and it would also help with the ability for different Institute right
now one of the problems we have is that there aren't standards for sharing the
data between institutions so basically these electronic medical records were
created by the vendors and using their specific system exactly there well hi
Jerry yeah software so it locks them in so when you want to share information
between institutions there are protocols being developed but it's not easy right
now right most don't is is it the sort of thing where is this being
experimented with in terms of healthcare operations or is it something that's
there was a story you had written I think this year that was talking about
the amount of information that can be gleaned from in aggregate from patient
documents and health records but there would be a way to sort of filter out
your information and you could be compensated for the value of that data
you could sell and this sounds creepy as all get-out are scary but you could sell
information about particular diseases ailments you know let's say you have
congestive heart failure they could use this information in studies but it'd be
disassociated with you personally right they did know there's a patient behind
this information and they could use that for studies but your information would
never be revealed because much in the same way like I gave the example for
buying a car and taking out a loan you would only get a check yes this is
the information that's there this is what's applicable but it's not tied back
to it it's it's scrubbed it's not tied back to an actual patient and right now
they don't have that ability they these studies are limited by the number of
people who participate in them but if we had a universal healthcare record that
was based on blockchain everybody would be unable to use to share this
information and share it and you know again and gets paid for it yeah and get
money back work because it is considered valuable information it is being shared
in some ways an aggregate now and so this would allow the person whose data
is actually being you know moved through the system to get a little bit more you
could opt in for well you think it wouldn't pay you a lot but depending on
the number of studies you know you could earn some bucks okay great any other
thoughts about blockchain in 2019 before I let you go I think I think this is
gonna be the year that and honestly do believe this is gonna be the year we're
gonna see some production systems go online it's just - it just seems like
too valuable a communications device a ability to transmit sensitive
information or valuable information like in a service supply chain to not be
rolled out in production okay great so we're gonna move I guess this year from
the looking at your chart here from the trough of disillusionment to the heading
into the slope of enlightenment for 2019 we're gonna learn all right Lucas thanks
a lot I appreciate the update will check back big year and see whether we're in
the slope of enlightenment or have reached the plateau of productivity for
now on blockchain in 2019 that's a wrap