Why Blockchain: Daniel Larimer at Virginia Tech
Graduated from Virginia Tech,i’ve been in the blockchain industry.I actually learned about blockchain shortly after Bitcoin come out in 2008–2009 because i wanted to create new currencies,a way to create more economic freedom or monetary freedom.Blockchain happened to be solution.That’s what got me interested in blockchain and i’ve created several different projects.One of them was a decentralized exchange.You can implement things like the stock exchanges.Companies can issue shares and all those things can trade on a blockchain,so i did that with bitshares.Then i went to the other end of the spectrum and i looked at social media on a blockchain and that’s why i created Steemit.That was so easy to use.Both of these were some of the fastest blockchains in the market.
Two years ago,i joined Block.One and we set out to create EOSIO.EOSIO is designed to make blockchain development easier.Block.One is now one of the largest blockchain companies.We’ve got about a hundred people around the globle.We are trying to make block and accessible to businesses to solve real world problems now.The early blockchian technologies like Bitcoin they had trouble scaling.They are limited use cases and difficult to use,so trying address all those different usability issues around blockchain to make it easier for everyone to adopt blockchain.Part of that is to help educate everyone on the true value that blockchain provides to businesses.So we built EOSIO.
EOSIO is the fastest general-purpose blockchain out there.We’ve got a lot of users no transaction fees.You can learn more about us on our website.The purpose of this talk is not just talk about our products but to talk about blockchain more generally.
Here is a list of the small businesses that have started building on EOSIO.There is tremendous interest and everyone is trying to figure out how can they apply blockchain.Some new business on it but it’s been a very challenging problem because everyone’s looking at Bitcoin ,Ethereum and EOS.They all think about tokens and new business models.When people think about blockchain,they think about public networks ,proof of work ,wasting energy.None of these things are necessary to achieve value from blockchain.If you’ve got a database and multiple users,your business can be better off on a blockchain.It doesn’t need to be public you can have private blockchains operated entirely by your business.If you’ve got a database,it should be on blockchain and that’s where the future of this technology is going.The challenge is a lot of people don’t understand what value is there in a private blockchain.After Bitcoin was created to be this completely decentralized platform,a database for managing money for transferring tokens from one person to another without any censorship.That is absolutely one use case of blockchain technology and it shows you the power of the technology.If you were to set up an SQL database using non blockchain technology and create a token on it and have a little transfer form that allows you to transfer it from one person to the other,that token would have almost no value.You build that exact same system on a blockchain and you are talking about hundreds of billions of dollars worth of value.The only difference is the security,the audit ability,the accountability of the system.That’s the power blockchain provides in a public distributed decentralized manner.I want to talk about how it applies to every single business you can conceive of.If you’ve got a business now.Are you going to work for a company after you graduate tech and they’re trying to build infrastructure you need it to be on a blockchain and there is a lot of reasons.
If blockchain is not about tokens.It’s not about being completely decentralized.What value is there any centralized blockchain where in this case i’m takling about a blockchain managed by a single company.For this example,i’m going to use Twitter as an example.Why would you want Twitter on a blockchain who benefits from putting something like that on a blockchain.Now you can imagine that if you are CEO or officer in a publicly traded company or you are a politician,you can say that would get not only in trouble potentially thrown in jail but also massive movements and stocks causing people to lose a lot of money.Now imagine that either an employee inside Twitter or a hacker who find some hole into their servers logs in modifies.Someone like Elon Musk’s account to make some statement that is a violation of SEC regulations.You are in a major predicament because Elon can’t prove he didn’t say it and Twitter can’t prove that he did.Now if it was on a blockchain,now Twitter could prove that they didn’t say it and Elon would be forced to prove that he was hacked it sort of shifts the burden.What’s worse Twitter today would be unable to do anything Trump,Elon or any of these people that are using these platforms,they are at the mercy of the security of these platforms. Because there is nothing they can do on there and to secure it.Because you have to reply on the servers you are logging in with a password.But with blockchain,you are in control of your own security,you can use your cell phone with things like security enclave to manage your private key protected by your fingerprint or your face.And now,if someone like you’re a CEO of a publicly-traded company and you don’t want to get thrown in jail because someone hacked your social media account not through your computer but through their servers now you can actually protect yourself.If you are a company ,you can also mitigate your liability.You can avoid costly court battles trying to prove you know who said what and that’s a tremendous value for everyone involved.That’s one area where it provides increased security because you now can audit every single action.
I’m going to get a little bit technical here.Hopefully not too technical for this audience.You can imagine you’ve got your server room.You got a security guard,the security guard checks your ID when you enter the server room.Then you allowed to go in and you can modify the databases to be whatever you want and then you leave at any time.Someone could come in the server room through the back door change those records but no one could prove that you did the right thing that the security guard actually checked your ID.You’ve probably heard of things like multi-factor authentication.You secure your account by not only logging in with your password but they send you a text message or some other app.In all those systems ,the server is the one that has to verify that you put the right password in,that you responded with the right code from text message.How do you know the server actually did its job?How can you prove to auditors after the fact that you actually did authorized transfer or post or you actually did log those hours in your time keeping software or you sign that contract.Those things are not possible with existing client server architectures.With a blockchain design,every single action that a user takes when you are on a website.If you are sending a request to the server that request is signed,the request is then logged in a database that’s append only.It means that there is not modifying data you are adding new data and database is not one server.It’s replicated and managed by multiple independent IT members of your team possibly in different locations.Block.One were to be operating a private blockchain.We’d have servers managed by people in blackburg servers managed by people in HK.Server is managed by people in various other countries and we know that there is not one IT staff that has the ability to go in and change these things.we know that transaction was received by all the different servers that they all signed off on it and you hava a permanent record.Not only that as a company you can either publish your entire blockchain so the entire world can see it.You can reveal just the hash of your blockchain that makes a public commitment to the rest of the world that you are not going to go back and change your records. If you are an accounting firm or a bank or stockbroker or in any timekeeping businesses for government contracts where they require you to log your hours every single day and not change things after the fact all of these things you have in true accountability and auditability of exactly what happended and that just makes everything more efficient.If you are one business and you want to communicate with another business today,you have servers that talk back and forth on the backend with API keys and things like that.But with blockchain,you can actually generate cryptographic proof that you transferred something in this bank and other bank can then do something or that you posted something on social media and that can improve and accelerate business-to-business communication.Blockchains help businesses automate compliance with regulations.As a bank,you need to make sure that different people sign off on transactions in different orders.As a business union,you need to made sure that purchases are authorized and travel expenses are logged.All these things,there are lots of rules and regulations that governments passed down.That businesses want to implement internally.Blockchains automate all that today when you go and buy stocks through a broker,it can take 3days for those things to settle during which time you look at your accountant and it says you’ve got negative debt here and positive stuff there just because things haven’t settled lock chains can settle those things instantaneously.It removes the human element of it and a lot of the requlations that we deal with in industry today are all about putting in processes to manually try to prevent corruption internally and externally.Blockchain automates all that which reduces cost for businesses.so it’s my belief that rather than regulations coming out that are going to try to suppress blockchain technology.I believe it’s going to be mandated.I believe that companies that don’t adopt these standards are going to be like companies that don’t secure their infrastructure today and cause losses to their customers the liability for using industry standard best practices is potentially huge so that’s why i’m confident that blockchain technology is going to be relatively you BIC with us.It’s going to be completely transparent and no one’s going to know they’re using it because it’s not going to be pushed by people directly.It’s gonna be by businesses that looking for efficiency security reduce liability regulatory compliance.It’s going to fundamentally transform every area of a society from banking to government to voting you.
so at Block.One,we’ve got a lot of security challenges that we need to address not only on the authentication of the user but you know preventing social engineering password phishing.These things can be largely eliminated by moving to some of these thchnologies.You gotta look at the whole picture and the blockchain is at the center of it.
So with the combination of hardware keys on your phone,blockchain services and smart contracts and software that make sure that the user knows what they’re consenting to.We can really eliminate the vast majority of fraud saving trillions of dollars every single year globally.So our goal at Block.One is to build software and infrastructure and tools that allow developers to move their applications from existing infastructure to a blockchain infrastructure provide the same or better experience for end users in terms of usability and at the lower cost.
Eventually developers are realized that blockchain is not only a more secure technology.It’s actually a better design pattern for building scalable maintainable software.That’s because it forces you to think about what the users doing to have unidirectional data flow and follow other best practices.You don’t have database corruption wiping out all your users data,you can always recover the data.I’ve talked a lot about security and talked a lot about how it saves money and reduced risk.But it’s also just a better architechture for all software and you’ll find that if you study the frameworks put out by facebook.They are all moving toward this unidirectional data flow and blockchain just formalizes it and signatures adds you’ve done it verification.
