Blockchain Revolution

Tullio Siragusa (00:12):

Hey everyone. Welcome back to Tech Leaders Unplugged. It's Friday the end of the week, and we're having another great conversation today. I'm speaking with Bill Vannerus and we're talking about the blockchain revolution. That's right. We're going to go there today and specifically discuss how blockchain can be transforming industries we decentralized, secure, and transparent transactions. So, welcome Bill. I'm looking forward to having, this chat with you.

Bill Vannerus (00:42):

Hi, Tullio. I'm glad to be here. That, I‘m glad to be back.

Tullio Siragusa (00:46):

<Laugh>. Yeah. Exciting. So by the way, if anybody has any questions or comments, wherever you're watching us, just post 'em in your chat. We will see them and we will try to respond or engage you in the conversation as best as we can. So there are some key things within the blockchain realm that can disrupt business as usual. And, most of the experience that people know of related to blockchain, you know, speaks to crypto. And today we're going to talk a little bit about how what's happened to date isn't really representative of what blockchain is supposed to actually deliver. Specifically, I'm talking about decentralized finance, what's known as defi. And so the idea of defi is where the financial ecosystem is permissionless. It's very transparent and open puts the control in the end user. So it decentralizes how money is transferred and borrowed and transactions, but it provides a vehicle where you as the user are in control. Now, Bill, let's talk about this a little bit because I think a lot of people's like, well, that doesn't work. Everybody's lost their money. I mean, look at what happened with so-and-so, right? Yeah. Let's talk about that a little bit. Maybe we need to sort of clarify what the ultimate value of Defi is, or Dex, for example versus how it's been so far. What are your thoughts?

Bill Vannerus (02:25):

Sure. Well, thanks, Tullio. Yeah, I mean, I think the, what blockchain technology, and I think a lot of people think about when they hear blockchain, they think about crypto, you know, Bitcoin, Ethereum, and such. And some of the things that have happened in, in the last few months, which have been kind of the failure of, you know, more unregulated, centralized types of exchanges. And you know what blockchain, you know, the promise in the, what excites me about blockchain technology is that, like you mentioned, it's permission permissionless, it's transparent, it's open, it's trustless, and, and it's fast, right? And it has lots of applications. And we're talking about, you know, defi, decentralized finance and, and decentralized trading platforms, decks, right? Providing for a lo, you know, a lower point of entry for a lot of people. You know, it's like, you know, banking Al Dion Bank, there's millions of people out there that, that the point of entry for investing, for trading, for being, you know, borrowing lending is not available to them, right? I think that's the promise. And, you know, the disruption is, you know, maybe cutting out middlemen, making it more efficient really making it inclusive for, for a lot more people. That's exciting, right? Yeah. It's open

Tullio Siragusa (03:53):

Idea, bringing back the village, right? I mean, that's really what it comes down to. It's bringing back the village the way it's been managed to date, especially when it comes to investment or crypto trading. It has not been decentralized. It has not empowered the investor, or the end user, because basically what it's done is I give my money to someone who manages for me, but they manage it for me. And they have absolutely zero regulation

Bill Vannerus (04:22):

<Laugh>, right?

Tullio Siragusa (04:23):

When you look at it from that perspective, you'd have to kind of almost be insane to just hand over your money to someone else to manage that has no regulation. So we basically, we, historically, what's happening is we, we replicated the traditional money system, but without regulations, right? The promise of true DeFi and DEX, Decentralized Exchange is where I become the custodial of my investment, the money, the information sits in my wallet, and it doesn't ever get sent over to someone else. Now, there's smart contracts and things in place that allow me to transact, and, and all that is transparent, but I never give over the control to someone else or some authority that does it, right? So, so the regulation is completely within my control. That's why it's called decentralized, right? I think it's important to clarify that. What are your thoughts on that?

Bill Vannerus (05:18):

Yeah, I mean, I, I, I agree and I think, you know, we haven't quite gotten there yet, and we've seen some examples of that. But it, you know, I think it also takes, you know, when I thought about, you know, how would I engage this, it, it, it's a different mindset, right? You have to take personal responsibility if you're going to be your own bank, right? And your own custodian, the wall that's yours, you know, the private keys are your responsibility, you know, not your crypto, you know, not your wallet, not your keys, not your crypto, right? So that's a different shift in mindset versus, you know, I give that responsibility over to a centralized platform, and then, then all I do is put my money in and, you know, things happen. It, it, I think it takes, you know, more research, more responsibility to really understand what the differences are so that when you engage, right, you know, you ha have to be active, right? You have to understand what you're doing. You have to take active participation, and that yields, you know, potential benefit.

Tullio Siragusa (06:20):

Yeah. I mean, I, I equate it to this idea that it's not a TV dinner mindset, right? You don't stick it in the microwave and it's done. You actually have to go back to taking accountability and responsibility for, for how you, you know, control and, and manifest the investments you're making. And, and like you said, some people just want to hand it over, but there's risks with that, right? That's the traditional model. And that's why it's also been a big problem with crypto is because they've handed it over and then, you know, without regulation, we, we know the story, right? Yeah. Let's, let's continue talking about this because how we make this work, there's obviously other components to it, and, and there's I think a, a key benefit. Like people are always like, what's the business implication of this? How does this allow something that isn't possible today with traditional software?

Tullio Siragusa (07:12):

So I want to talk about one example that I think tells the story very beautifully. And this also ties into the value of NFTs. It's not really about you know, pictures of gorillas and, you know, selling for millions of dollars. <Laugh>, that's not the end goal of NFT. It's really about encrypting personal data. It can actually change PIA and HIPAA and credit card and e-commerce and create a value that's less likely to be hacked. But before we talk about that, I, think one of the key things to mention is, for example, there's no global payroll platform today, right? It doesn't exist. You have to set up pay payroll in every country. So if you're a global company, you're dealing with payroll systems in every country, and, and, and it's necessary because you have to have the taxes and legal implications that come with that, right?

Tullio Siragusa (08:06):

Right. But if you are a global company, and let's face it, because of the pandemic, a lot of companies have learned to be more remote and leverage talents all over the world. How you pay for those talents is not so easy. So you work with partners and vendors who have relationships, who have those corporate entities in those countries, but the true value of decentralization is the empowerment where you can do this yourself and clear this yourself. One key way to do that is with blockchain, because you actually can clear wallet to wallet as long as you have the ability to translate those currencies into fiat, into traditional money. So in, in some respect, excuse me, with NFTs, the proper use of NFT, you can create a global payroll platform with blockchain. What are your thoughts on that

Bill Vannerus (08:54):

Bill? Yeah, I think that's, that's a great point. I mean NFTs coupled with, you know, smart contracts and, and the possibility of, you know, improving or disrupting payroll and also, you know, cross-border payment rails, right? Yield swift system and, you know, I understand there's some new bank banking upgrade ISO compliance coming down the pipeline, right? That may be driving some of this. I think the opportunity is immense for businesses to, you know, reduce cost, to provide an opportunity for inclusion in, in the workplace with, you know, smooth and efficient, transparent, you know, payroll systems, cross-border payments, you know, moving money quickly and low cost. I mean, I think, you know, nowadays it takes, you know, there's huge fees and delays in companies if they're, you know, region regionally spread around the world just to get payment, you know, move money around just for payroll, just internally within the company, right? The fees and the delays are, you know, have the opportunity of being greatly reduced and efficiently efficiency improved with using a blockchain solution.

Tullio Siragusa (10:18):

Now, a lot of people will argue and say, well, that's a nice, funny, and easy way to launder money, but

Bill Vannerus (10:26):

Okay, yeah.

Tullio Siragusa (10:27):

With full transparency in a decentralized system and smart contracts that would be completely visible even to an authority that could be monitoring that kind of transaction. Yeah. So, you know, what are your thoughts on this idea that you know, oh yeah, that could just enable the bad, the bad guys to just do their thing. Is that just a misunderstanding of how it works,

Bill Vannerus (10:51):

<Laugh>? No, I think, I mean, that's a great point. And I think, you know, that, that, that comes up a lot, right? And, you know, blockchain technology is transparent, right? And it's immutable, so you transact on the blockchain, there's no change in it, right? <Laugh>, it's, it's there. And the tools are there to query and inspect the blockchain. And I think that brings in, you know, the need, for digital identity, right? So that K Y C A L M practices are easily put in place. But I think, you know, one of the, the key points of contention, if you will, between centralization and decentralization is, you know, ownership, of data, right? So data, your data, your personal data may be attached to your digital identity and hopefully, you know, in a self-sovereign way where you own your data and you give others permission, right? As you engage on the blockchain and in transactions to use or view your data, you know, hopefully, they'll be the ability to, to keep and retain your data, but also to be transparent with respect to so that it reduces this concern, right? About, you know, lender laundering or fraud, et cetera. I think there's great opportunity for that to solve that

Tullio Siragusa (12:19):

Problem. Yeah, absolutely. I want to read a little bit about the sort of promise of digital identity management from blockchain which is really about securing the identity management. It's an essential thing today, but blockchain-based identity solutions can provide individuals and organizations with self-sovereign, secure, and tamper-proof digital identity. These can streamline, like you say, K Y C, know your customer, anti-money laundering processes, reduce the risk of identity theft and enhance of privacy. And this really speaks to how do you execute on this? And I really believe one of the ultimate value of non-fungible tokens is to tokenize all identities, you know, essentially start walking around with a credit card. It's a tokenized identity, right? I do a transaction and an e-commerce platform. They don't need to know all my data or hold onto it. They just need to have my token.

Tullio Siragusa (13:19):

And that in itself can translate through those contracts into where it's going to get shipped to, because I, I decided that I, I control that and how the money gets clear. Yeah. And I think a lot of, a lot of companies are struggling with, with, with how to make that transition in a way that, that lets users know that they're actually being more empowered. And part of it's just the platforms aren't there yet. I think maybe card is probably the closest to getting to that decentralized model. What are you seeing, you know, what do you think are the challenges to achieving this goal in your opinion?

Bill Vannerus (13:56):

Yeah, well, I think, you know, I think, you know, card that you mentioned, there's, there's some others like flair network that are just up and coming that are trying to solve, you know, problems exactly like that, right? How, how do they present it more to the public? Especially with, you know, the public's kinda reaction to some of the, you know, centralized decks, you know, and, and, and the problems around that, right? The, the, I I think the industry blockchain industry's kind of in a kind of a recovery mode right now from, from, you know, taking its slicks in that respect. But hopefully, it starts to get more of a voice, because not only is the potential there, but I think these platforms are being built out. You know, if you look at, you know, there's an increasing amount of developers, right? Coming onto those platforms to start innovating using those protocols you know, with respect to secure wallets, you know, secure and trustless digital identities so that they can be built into the protocols and be easily used and uptake by business, right? Business has to see easy entry points. You know, do I have a set of APIs that allow me to transition my business onto the blockchain, right? And you know, what, layer one or layer two protocols going to best facilitate that so that, you know, I have, it's transparent, I can do my, my business planning around it and, you know, put together a plan to initiate that.

Tullio Siragusa (15:40):

You know I would've to say I was kinda late to the blockchain world. And, and recently I've been an advisor to a number of blockchain companies, including a company building index out of Switzerland called Genius Yield. And the one thing I discovered was it's very technical jargon in terms of how it presents itself in the marketplace. And I, I recall speaking to a lot of the founders and CEOs, CEOs of these companies saying, you need to break this down into business terms that people can understand. Like, , what's ultimately the value of having a DEX? How does that compare to how we do it today? And as you begin to have more of a, a business language type of discussion around the value of blockchain and not so much on all the technology jargon that's associated with it, you begin to realize, oh, wow, these solutions could actually be adopted in the fiat world too.

Tullio Siragusa (16:36):

It's not just limited to, to this new, you know, decentralized environment. The fiat world could actually leverage some of these technologies to empower investors and, and improve the clearance of funds and transactions. So the business implications of far and wide, but part of the challenges is just the language that seems it's highly technical, right? And like anything else, new technology, it's all about the jargon. And there's a few that are like, get it. And there's the rest are like, I don't understand how this works and, and I don't like it. So what are your thoughts around that? You know, what can companies in this space do better, to help everyone else understand what's actually happening and what the value of this is?

Bill Vannerus (17:21):

Well, I think, you know, I, I think I saw there was a technology training company that was transitioning to roll out on one of the layer one blockchain protocols, right? And, and to, and, and, and they were using NFTs, right? They planned to use NFTs as the mechanism of delivering their training, right? Around blockchain and taking, you know, you drop in discord channels of some of these blockchain projects, right? It's all techie guys, and you know, they have their white papers hanging up there. But, you know, to take it from that, you know, white paper discord techie space into mainstream, I think it's going to take companies like that, that are willing to bridge it and innovate to put the you know, like blockchain 1 0 1 type of training modules out there and have dialogues about it, right? Blog about it, YouTube about it, social media, about it, to really get the interaction with people, right? And, and bring the understanding level up so that people can see the, you know, potential benefits that blockchain brings around, you know, defi space digital identity space and, you know, on a digital identity it sure would be nice if things like, you know, voting moved over <laugh> to the blockchain, right? With, with, you know, digital identities in place. Yeah,

Tullio Siragusa (18:59):

Ah, absolutely, you know, let's, let's keep talking about this. I think maybe one of the easiest things to comprehend if you're new to blockchain or if you have struggled with understanding what it means, is this, this concept of smart contracts. I'm talking over my Alexa, who's reminding me of a calendar entry, <laugh>, I apologize, nothing like being live. So let's talk about smart contracts. You know, it's smart contracts are self-executing contracts with the terms of the agreement directly written into code. So they automatically execute when predefined conditions are met, eliminating the need for intermediaries and reducing the potential for disputes. Smart contracts can be used in various industries, including insurance, real estate, supply chain management, and more by automating contract processes and increasing transparency. Smart contracts can disrupt businesses by reducing costs, minimizing human error, and streamlining transactions. Now, this description's a very business-like description, not a difficult thing to understand what smart contracts are all about. Essentially, it's a vehicle for making transactions happen that eliminate human error, and it's transparent. You want to talk about this a little bit on how, you know, maybe compare what this looks like against, like, say, let's say a traditional purchase order, for example.

Bill Vannerus (20:24):

Sure. I mean, o one, one example I like to think about is, you know, a real estate transaction. I, I'm, I'm trying to sell my house. Now imagine if my house was tokenized as an N F T, and I could submit that into a smart contract, right? With a potential buyer whom both of us have, you know, digital identities on the blockchain, and now there's the potential for reduced cost quick transaction. You know, it might disrupt, you know, the, the escrow would be taken care of, you know, the title company real estate attorney interaction, but all be embedded into the code as a smart contract, right? And can vary, streamline, and, you know, maybe drop, you know, this traditional 6%, 3% buyer-seller to minimal and reduce the other fees that go along with it too. Absolutely. Right? So that, that's you know, probably a good example.

Bill Vannerus (21:21):

I mean, you mentioned other insurance and you know, other applications for, for NFTs, you know, for also for tokenizing, you know, NFTs and, you know, a digital economy using smart contracts and reducing, you know, another barrier, you know, for investors, right? That may not have been able to, you know, buy a home or apartment complex, for instance. They might be able to, through a smart contract and NFTs invest in fractional ownership of something. I think that's a huge entry point that could be opened up to really be more inclusive for a lot of people that, that may want to enter into that type of investment opportunity.

Tullio Siragusa (22:11):

You know, as we come to wrap up, Bill, I can't help to think that perhaps the mind shift that needs to happen. It's not fiat versus blockchain or how it's been versus how it could be as it is accepting that there's a natural progression on how technology can enable and streamline things that have been done a certain way for a long time that worked but can be done better. It's like any other technological evolution, it's a disruption, but it's such a significant leap in disruption that I think a lot of people struggle with the idea that that's a big leap. We'd want to do iterative steps to get there, which is the traditional trajectory of technology. It's always iterative steps and 20 years later it's changed so much, but it wasn't so painful because it took 20 years to make that transition. Whereas in blockchain, it's like we go from this to that pretty instantly and I think a lot of people are scared of that.

Tullio Siragusa (23:08):

And the other thing that I think is clear is people operating in this space need to change their language a lot. Stop being so techy and start talking about the business impact of what, of what, what, what this represents. And talk about it in terms of how it relates to what's being done today and what is the leap that's being proposed and how, what's the value of that leap. And the more that conversation happens, the easier it's going to become for people to accept this as just another evolution in technology. And I, the other thing I think it's worth mentioning is AI will help blockchain as well because it's going to because that's introducing the possibility of things that are again, a leapfrog forward. And so in some regards, some technologies lag depending on other dependencies. And I believe AI is going to actually help blockchain tremendously because it's going to help the mindset, the mindset of leaping forward.

Tullio Siragusa (24:11):

So let's see what happens. Bill, it's been great talking with you. Yep, great talking, I appreciate it. Thanks for joining us again today. What have we got coming up? Let's see things just heating up. We've been having a few Tech Leaders Unplugged conversations amongst the hosts and co-hosts really to just prepare ourselves for the primetime of having our guests join us. And what we got coming up, we have Ravi Sarkar, who's the enterprise CTO of Microsoft. Gary Sorrentino, who is CIO at Zoom, Darrel Bracken, CEO at Logitech. And Gil Rosen, who's the CMO of Amdocs. We have many others lined up. So stay tuned. We will have these shows with these amazing tech leaders and innovators and disruptors and see what we can learn from them. And you know, I love doing this because I learn every day and hopefully, you too will get something out of it as well. And learn something new, for yourself. Thanks for joining and please have a great weekend everyone.