Executive MBA students from Wharton meet the Internet Computer
As part of their curriculum, professionals in the Executive MBA program at Wharton — a top-ranking university for MBAs — took a tour of Switzerland’s Crypto Valley region, one of the most prominent hotbeds of blockchain and digital asset activity. A stop at the DFINITY Foundation to learn all about the Internet Computer was a highlight.
Written by Angela Harp
Ranked number 3 this year in Best Business Schools, the Wharton executive MBA program not only prepares professionals with the business and leadership skills needed to realize their career goals, it also introduces them to the latest industry trends. This time around, about 60 executive MBA students from top industry players, including Apple, SAS, American Express, Goldman Sachs and Uber, got a glimpse into the world of blockchain, digital assets and next generation finance on a visit to Switzerland.
Why Switzerland? Among investors and entrepreneurs alike, Switzerland is considered one of the most crypto-friendly countries in the world, and is well on its way to becoming a leading hub in blockchain and distributed ledger technology (DLT). Over 1000 Swiss-based companies and startups are currently exploring the technology with the support of the Swiss government’s innovation-friendly framework conditions. The financial services industry, in particular, is the most advanced in the world when it comes to experimenting with blockchain technology. Industries such as supply chain and pharmaceuticals will soon follow suit in identifying and investigating opportunities to leverage blockchain-based technology.
Embarking on a “Tour de Suisse”, the Wharton class of executives went from Crypto Valley region in Zug, to various banking entities, including the Swiss National Bank and FINMA, to innovation centers such as CV labs and the Bank for International Settlements (BIS) Innovation. The tour also included first movers such as Bitcoin Suisse, an early innovative cryptocurrency exchange that introduced Bitcoin ATMs in a number of Swiss cities; Sygnum, the world’s first digital asset bank; and the DFINITY Foundation, a major contributor to the Internet Computer Blockchain.
After a warm welcome over coffee and ‘gipfeli’, DFINITY R&D experts Björn Assmann (Senior Research Scientist), Dieter Sommer (Senior Technical Program Manager) and Emma Peretti (Senior Project Manager) introduced the group to the Internet Computer, and the vision of it evolving into a World Computer, on which anything can be built at scale.
A crash course on the Internet Computer
To truly grasp and appreciate the architecture of the Internet Computer protocol, it’s important to understand where it falls on the evolution spectrum of blockchains. Blockchain 1.0 is the Bitcoin Network, a peer-to-peer software and cryptographic infrastructure that utilizes a power-hungry proof-of-work consensus algorithm to decentralize and securitize payment systems by offering a publicly verifiable and immutable ledger of transactions free of control from any organization or government. Blockchain 2.0 is the emergence of smart contract software. Essentially, Ethereum took decentralized computing a step further with the development and deployment of smart contracts, which can be used to build the backend of decentralized applications (dapps).
Fast forwarding to today, the Internet Computer is blockchain 3.0. It is equipped with next-gen smart contracts, called canisters, that can be used to build both the frontend and backend of applications fully on chain. But that’s not all… Canisters are also web-serving, meaning they can interact directly with traditional web browsers and other blockchain networks such as Bitcoin and Ethereum without relying on centralized cloud services that compromise decentralization and security. This means users can also interact and engage with dapps on the Internet Computer via any browser without having to buy tokens or set up wallets, making the user experience as seamless and smooth as that of traditional web applications. The Internet Computer is being developed as a general-purpose blockchain on which anything can be built on chain at scale. This is vastly different to other blockchains and closer to the internet we are familiar with today, only without the centralized pain points whereby end users of applications are vulnerable to hackers, censorship and the vested interests of Big Tech.
So what makes the Internet Computer function differently? At the heart of the technology is threshold cryptography — the main innovation that distinguishes the protocol from its competitors. Threshold cryptography is the core element that enables many components of the Internet Computer, including canister functionality, consensus and most importantly, chain-key cryptography — a novel set of cryptographic protocols that allows the blockchain to have a single public key. With this single public key, canisters can communicate across the subnets on which they are hosted without the need for a central hub. Subnets can also verify all messages against this one public key. And with threshold signatures, which involve a public and secret key sharing to validate messages, canister smart contracts can interact with other blockchains like the Bitcoin or Ethereum network using threshold cryptography. As each canister smart contract has its own ECDSA public key and can directly process HTTP requests, they are also accessible by users from any browser, and can own cryptocurrencies and interact with Web2. All of this combined puts the Internet Computer in its own category, and on a trajectory to become a World Computer capable of offering open internet services for the community, by the community, replacing today’s IT software.
More than cloud
As many of the participating students came from Big Tech companies, like Amazon, SAS and Oracle, there were questions flying around the room about how the Internet Computer could compete with Amazon Web Services, for example. One advantage of AWS is that besides hosting, it provides a full stack including load balancing, better versioning, etc.. While there is still much to explore to further develop the Internet Computer in a way that provides comparable features, there are already some ideas on how to optimize the blockchain’s value as a cloud provider. In the case of load balancing, for example, ideally future subnets would split, and new ones would form dynamically depending on dapp usage.
But beyond the typical internet services that we are familiar with, it is important to realize that the Internet Computer is controlled by one of the biggest decentralized autonomous organizations (DAOs) in the blockchain space. This DAO, called the Network Nervous System (NNS), lives in a special subnet that allows users to stake tokens in entities called ‘neurons’ to participate in governance. Voters and node providers (owners of the independent node machines running the blockchain) even receive rewards for their services and for contributing to the decision-making process of how the protocol should be updated and developed. This is an extremely valuable attribute in itself, as anyone can participate in governance on the NNS by staking ICP tokens and voting on proposals to update the protocol. Imagine having a say as a user on how AWS services should be shaped and developed… You’d be able to opt for valuable features in addition to load balancing or better versioning.
DeFi — next generation finance
“Why on earth should we trust DeFi over TradFI?”, one of the students asked during the presentation on decentralized finance on the Internet Computer. A valid question, indeed, particularly in light of the increasing DeFi hacks since 2020. The answer to this very important question comes back to the one key thing that makes the Internet Computer so uniquely different. Yes, you guessed it — threshold cryptography. To recap, each canister smart contract on the Internet Computer has its own ECDSA key enabled by threshold cryptography, which it uses to sign transactions on ECDSA-based blockchains like Bitcoin and Ethereum. But that’s not all, they can also hold cryptocurrencies and send them as well via HTTPS outcalls. So basically, DeFi services on the Internet Computer are implemented as smart contracts and therefore do not need to rely on any third party intermediaries or bridges because they can directly communicate with other blockchains using ECDSA keys, and with Web2 sources, using HTTPS outcall. No custodians or Layer 2 systems like Lightning where crypto assets are more prone to malicious hacks. What’s more, users do not have to pay gas fees for any services or applications such as decentralized exchanges.
But there has to be some bottlenecks of scaling DeFi on the Internet Computer, right? At the moment, throughput and latency on the Internet Computer are basically unmatched, processing 20,841 transactions per second when load testing, and 3–5,000 with regular network usage. One drawback, however, is that the Internet Computer currently has no real stable coins, while all major DeFi does. Efforts to change this are underway.
Actions speak louder than words
Enough of the talk, it’s time to give the Internet Computer a try. After learning the Internet Computer essentials and getting an overview of DeFi, the students were instructed to pull out their smartphones to create an Internet Identity, which is an authentication system that combines public standards such as WebAuthn and FIDO with threshold cryptography for ultimate user privacy and security. When everyone successfully created an identity, they were invited to join a chat group on Open Chat, a Web3 messaging service similar to Whatsapp, only it is owned by the community via an SNS DAO, and it acts as a wallet that users can use to send cryptocurrencies to friends. The students had a blast sending messages to each other in the chat. They even experienced an airdrop of ckBTC, a bitcoin twin on the Internet Computer, which they could send around. It was loads of fun seeing the Internet Computer in action!
A well-rounded visit
Overall, the Wharton students very much enjoyed the talks and activities, and many of them wanted to get involved with the Internet Computer however they could. Some even wanted to create their own ICP.Hub in countries where they do not yet exist. Perhaps, the coolest part about the whole event was that there were professionals from a wide range of industries. So the questions and insights from the group touched on various aspects of the blockchain industry: from hardware questions around costs and maintenance of node machines, to jurisdictional issues and GDPR, to the incentive structure of the ecosystem and community, to how to sustain DAOs.
It was certainly a well-rounded discussion that allowed the students to experience both sides of the coin — the bleeding edge of finance and the traditional institutions it could influence or disrupt.
Thank you Wharton Execs, for your genuine enthusiasm in the Internet Computer. The DFINITY Foundation wishes you success in obtaining your MBAs.
About the Wharton School of Business
Founded in 1881, the Wharton School of the University of Pennsylvania was the first business school ever to exist in the US. Since then, it has become the premier business finance school in the world, attracting students globally and extending its presence into other countries. It is consistently ranked as one of the top universities for MBAs, and was ranked number 3 this year in Best Business Schools.
