hi and welcome back to TechTalk I'm Ken Mingis executive editor Computerworld
I'm here with Lucas Mearian senior writer for Computerworld if you're watching us
on LinkedIn live or YouTube we're broadcasting live so if you've got
questions for us please leave them in the comments we'll try to answer them
while we're talking about blockchain that's today's hot topic and as always
please play nice no food fights in the comments section I'm so Lucas thanks for
being here as always it's important to sort of check in with blockchain because
it's sort of evolving so quickly these days and it's hard to keep track of
who's doing what who's got proofs of concept proof of concept
yeah yeah pilot projects things like that you had a really interesting story
yesterday that sort of takes a look at how Gartner views blockchain right now
and you know despite all the hype it seems like they've been a bit cautious
about embracing the blockchain is gonna change the world
so what does Gartner saying and what should companies you know be aware of
these days so right now blockchain after a lot of hype is sort of slipping into
the trough of decision I love the trough of disillusionment I think of it is the
trough of despair terrible sea of despair yeah which just means that
people's expectations are becoming more realistic and they're backing off a
little more they're being a little more serious and judicious about how they
deploy it in their POCs and pilots so it's not a bad thing it's kind of a
settling of the technology of the view of the technology yeah I mean it is
interesting basically for those who don't aware blockchain is a distributed
ledger technology that's been really rolled out I guess in a couple places
for sure's financial services and supply chains as a way to basically tie
together a lot of business processes that you know may be archaic at this
point people work things like that it's gone through quite a bit of hype for the
last couple of years including predictions that it would be as
disruptive as the internet was 20 years ago that said as a lot of companies
start trying out these different you know forms of blockchain or blockchain
as a service they're finding out that first of all it doesn't necessarily
solve the business processes they wanted to
you know to update and modernize and secondly you know and this comes from
your story about Gortner that there's been a fair amount of fragmentation so
what yeah what's gordon are talking about there with the fragmentation
issues so there are no standards right now there there are possible de facto
standards emerging but we don't know for sure in five years if they will become
the standards or even in the two years of they'll be de facto standards so you
have to be cautious about that there are a lot of different forms there's our 3/4
a hyper ledger aetherium half a dozen others and then there are subsets of
each of those this is a lot of different versions of blockchain platforms they
don't always play together well they don't talk to each other because there's
almost just different what different approaches to the same basic techniques
okay exactly so let's say I am a grocer a huge grocer and I have a lot of
different suppliers for my stores if they if all of them are on one platform
that's great we can all talk but what if they adopt others or what if you and
bring on new suppliers who have a different version of blockchain now
you're having to support different versions of blockchain that all have to
link it back to your internal systems they don't talk to each other there's no
standards for that so that's gonna make it almost impossible for a company I
mean you've got something something that reminds me of Walmart which is you know
has begun to embrace blockchain isn't this the month that they've told their
suppliers they have to be on yeah their system so that they can basically track
food from what is it from farm to farm to table basically if you're just tuning
in we're talking about blockchain just let you know that we're kind of getting
an update from Lucas Marion here about where it is right now after a few years
of hype things seem to be settling down and so we're trying to figure out where
it goes from you know where it goes now so anyway so Gartner back back to the
fragmentation it was interesting to though that one of the points that you
know you made in your story based on the Gartner report was that with all these
companies experimenting and spending some serious money to try to figure out
how to make it work for them they need to realize that whatever flavor of
blockchain they're using right now may not win out you know they may be
spending money on something that into it years will have been fallen will have
fallen by the wayside right and what's what's Gordon's view on how that's going
to shake out they're just they're telling so in terms of the the long-term
standards that may emerge okay so consortiums like the industry groups
like the I Triple E well probably eventually not that one in particular
but like that will probably eventually be responsible for developing a standard
that will be adopted by the industry it won't be government regulators who
insist on the standard although they may work with them and know industry groups
have really gelled together yet to create a standard there still is this is
also nascent that they're still experimenting with it they're seeing how
companies are trying to adopt it and use it not necessarily a bad thing for the
big companies to experiment with it but don't put a lot of resources into this
if you want to play with a little you want to use a blockchain service
companies like IBM s ap Oracle they all provide SAS services it's basically
almost like a blockchain in a box it gives you a chance give you a platform
they come in here's the platform you can kind of experiment see how it ties into
your business processes without really investing a lot of money on the
blockchain developer you don't need to purchase a bunch of hardware nodes for
to create that ledger so yeah it's like watching in a box but they're saying be
careful and Gartner is not the only one Forrester is also very conservative
about blockchain they're concerned as Gartner is that whatever pans out in the
end is not gonna be what you're trying to roll out now blockchain has a lot of
potential but we're not gonna see what that potential truly is until standards
development yeah it is interesting to you kind of wonder since governments
have really kind of backed off on this I mean I know China's looking at it as
perhaps using blockchain as a part of a fiat currency our currency system and
it's actually a in ways you could say it's what they weaponizing in because as
you know there's a trade war going on with the United States right now and
that's based on what is the de facto currency which is the US dollar in the
business world well if they created another de facto currency ie crypto
currency they can undermine any efforts by
us to to usurp their power and that tree interesting that would be a huge deal if
you could displace the US dollar as the currency goes our global and I think
that's what a lot of these countries are thinking I I can't I can't read their
minds but it seems like that's what they're thinking they're thinking this
is a kind of a power grab situation where they can control a crypto currency
in a way that they couldn't control Bitcoin because China has basically shut
down a lot of Bitcoin mm-hm they they don't want these mining farms
in their country they don't trust it but if they can control it that's a whole
different situation yeah I never thought about blockchain as a weapon if you're
just tuning in we're talking about blockchain which has been hyped for the
last couple of years we're trying to figure out where it's going now and
there seems to be some cautionary tales out there interesting you know one story
that you're working on now that I know you haven't written up yet but as
companies like Facebook and and others are kind of coming up with these their
own crypto currencies and their crypto wallets I mean you know Apple sort of
thinking about blockchain now there are some things bubbling up in Europe that
could be problematic for like Facebook what's going on there well as we as
people have kept up in the news knows Facebook has had some privacy concerns
oh one or two along the way and they've been taking a task for that you know
whether alleged or actual but yeah so France and Germany when Facebook
announced that they were planning to create their own cryptocurrency sleep
Libre Libre Libre okay and it's a stable coin so what's a stable coin in a stable
coin is a digital currency that's backed by a fiat currency like the US dollar
like the Euro you know like a peso whatever currency you want it has
something behind it that's real exactly what everybody thinks it's worth ready
exactly so there's that yeah there's an actual value behind it's tied to it JP
Morgan Chase came out with JPM coin earlier this year as a method of using
blockchain to make cross-border transfers and that money is tied back to
whatever currency in that content with the local currency exactly
so France and Germany's finance ministers came out in a joint statement
and said we are not going to support we are going to block Facebook's Libre coin
in these countries now they can't speak for the entire EU but they are basically
platform the project players they're there why you is created more or less
and the UK is thinking about going and leaving so although they're the other
powerhouse there these are the two main countries that set the tone for a lot of
the regulatory programs right so they don't speak for the other 26 nations or
25 if UK's I'm gonna UK but they certainly have a vast amount of
influence and could certainly kind of stem the tide that we have anything back
from Facebook yet we haven't no I don't know long what's but the upside is for
them to comment at this point you know they may at some point but yeah I made a
big splash when they announced this and you know you do have to wonder if you've
got nations like Germany and France I mean if if they were to pull the whole
EU into their view of this and to start throwing up some roadblocks you know you
do have to wonder because obviously one of the things about a cryptocurrency in
encrypted wallet is the whole point of being global right you know you've got
one sort of financial underpinning for everybody and if you've got whole
segments of you know again the EU for instance he says we're not interested or
we think there are privacy issues here what that would do to Facebook's plans
well what's interesting is a lot of these cryptocurrencies are targeting the
unbanked yep so in developing nations or Nations and whose governments are in
turmoil right now like Venezuela where the currency has been devalued
extensively so they're talking these countries and therefore cross-border
payments so let's say that I am an immigrant working in the United States
and I want to send money home to Venezuela am I going to send at home in
Venezuelan currency which is rapidly rapidly declining it or am I going to
use a stable coin that's tied to the US dollar to send it back
I'm gonna choose the stable coin I mean I would do that yeah so that's their
concern Facebook has what is it 1.5 2 billion simpler libraries something like
something you know insane number people and if a percentage of them 100 million
200 million decides that they're going to get on this stable coin wagon this
Libre wegen they could really undermine I shouldn't say undermine they could
control the value of of currency in those countries they could actually in
impact the economics of those countries because once you tie in to local
currency that currency is basically out of circulation yeah because it has to as
you as it's tied to the cryptocurrency it's not being used unless the
cryptocurrency is being spent so it's in a type of digital wallet mhm
let's say it's interesting cuz you know that goes back to the original point
that you know the idea that that blockchain based I guess Ledger's and
all cryptocurrencies could be disruptive and that is an example of how this could
be extremely disruptive to the financial services industry and just financial you
know platforms across the world if it takes
off yeah I mean this is kind of this could affect the central banks this
could affect organizations like Swift which do the money transfers today it
could affect you know your government bodies like to like the Federal
Reserve's of these nations because the Federal Reserve's business is to create
stability and concurrency in those nations to local currencies well now
suddenly Facebook becomes a sort of de facto Federal Reserve they're holding
10% of currency yeah so it's become a bank yes developing country they
absolutely become a bank okay any questions real quick before we go yeah
we've got a few questions okay one is maybe basic for Lucas but they're asking
how secure is blockchain compared to other methods blockchain itself is
extremely secure it just what makes it so popular that that is what makes it so
popular it's based on katara fee it it cannot you literally cannot change
something once it's placed in that ledger however this is the caveat
blockchain doesn't sit by itself it has applications that are built on top of it
bitcoin is an application on top of a block chain or a distributed ledger that
does create the security issue can create a security issue I don't say it
does it can create a security issue and we've seen people hack a Bitcoin before
Bitcoin they can manipulate the system basically well the blockchain underneath
it maybe maybe secure the Bitcoin on top can be manipulated depending on who's
got how many Bitcoin and what they're doing with it for example you know there
are there are several methods of creating a consensus but the most
popular one is called proof of work and basically you have a lot of nodes and
computers that have to work out a mathematical problem and once they work
out that mathematical problem they are able to add cryptocurrency out the
cryptocurrency equation just say data to the network and that is mutable once
it's the network can't be changed right that remains however if you can grab a
majority of those nodes you can control what data is added to that network so
it's called they call it a 51% attack so that just means more than 50% of the
nodes are now controlled by one entity now they're steering that data or lack
of data in a certain direction that's going to be beneficial exactly they can
change they can actually change the network however we have to remember this
is typically done on smaller block chains where there aren't as many nodes
and blockchain networks you're not going to see that with a large Bitcoin network
it's because you'd have to expense to do it anyhow oh yeah you would do much
money to it it wouldn't be worth your time right got it okay so isn't IBM
already working to standardize the blockchain along with other companies
and universities hyper ledger fabric yes that's that's an example of what could
become a de facto standard it's certainly being tested by a lot of
industries you have the diamond industry you have the
produce industry with Walmart is testing it on food chain you have trade lens
that is being tested also another hype alleged based platform from IBM that's
being tested by shipping companies like Maersk in a lot of their partners it's
being tested it has a good chance of becoming a de facto standard but there's
no guarantee that it will be and Gartner's Gartner believes that it'll be
about one to two years before these de facto standards actually start to gel
where there's enough uses behind them where they become that de-facto standard
but there's no guarantee of that and in three to five years they're saying is a
possibility that industry standards may emerge you know beyond the de facto
standards yeah that's that's why the big rush for all of these companies to jump
in they're hoping to create the one as IBM is that will use a standard yeah so
that and then the last question I had here was but where do you see this
technology two years from now you kind of just answered that yeah yeah I don't
I think they're gonna work on securing it I think you're going to see new
consensus mechanisms you're going to see hybrid block chains coming out which is
basically and probably public and private there are advantages to both
yeah then what we've already talked about which is the formation of whom de
facto standards yet the best way to find out is check back in two years because
I'll be right here that's great great questions very much appreciated you know
that you're asking about that that's that's to the core of what we're talking
about so yeah Lucas thank you any last thoughts for let you go look for the
story tomorrow okay yes exactly we're working on a story for computer world
about this whole issue with Facebook liebe Libre and European Union European
and other countries yeah what might be happened some us congressmen who have
voiced similar concerns okay yeah coming up on this side of the pond as well okay
so thank you for being here Lucas just a quick reminder that in terms of our
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