Blockchain Speaker

Patrick Schwerdtfeger is a leading authority on business trends including blockchain distributed public ledger technology (and cryptocurrencies like Bitcoin) as well as big data, artificial intelligence and social media marketing. He covered “Blockchain in the Capital Markets” in Colombia for their stock exchange association and has covered blockchain implications (both short-term and long-term) for events in Vietnam, Barcelona, Kuala Lumpur, Canada and America. Patrick is the author of the award-winning book Marketing Shortcuts for the Self-Employed (2011, Wiley) and a regular speaker for Bloomberg TV. He has lectured at various academic institutions including Purdue and Stanford Universities. New technologies often emerge quickly and transform their respective industries, and blockchain is no exception.
 
As a consensus-driven distributed ledger that records every single Bitcoin transaction, blockchain technology promises to revolutionize the back office reality in the financial services industry. By removing the need for intermediaries (like banks and credit card companies), blockchain essentially automates trust and delivers unprecedented efficiency to all manner of financial transactions. It could effectively quadruple the number of people around the world who are capable of making online payments. The Philippines, for example, is using blockchain to develop financial infrastructure for their 100 million citizens, many of whom work in other countries and send remittances to family back home. Many other developing countries could follow suit. Patrick’s expertise of disruptive innovation and exponential technologies guarantees an insightful and and thought-provoking session.
 

Speaker on Blockchain Protocol

 


 

 

Past speaking clients include:

 

Blockchain Business Speaker

 

Recent speaking destinations include:

 

 

Expert on Blockchain Technology & Protocol

 
The primary problem is that it takes as much as 20 days to settle syndicated loan transactions using the current clunky back-office processes. Meanwhile, the front-office processes are measured in milliseconds. The dichotomy is striking. Not only could blockchain technology revolutionize these processes, saving financial companies billions of dollars, but it could open these markets up to countless other players who could reshape the industry over time. That means blockchain technology is both an opportunity and a threat to existing financial organizations. There are dozens of startups and private equity companies in Silicon Valley and other technology hubs that are investing heavily in the technology and related opportunities. Patrick’s keynote session is built on case histories and success stories, highlighting what some of these startups are working on and how they are using the technology.
 


 
The five (5) emerging use cases for blockchain technology include:

  • Supply Chain Management
  • Digital Identity
  • Digital Payments
  • Product Licensing
  • GDPR Data Protection

Whenever a new technology emerges, people don’t know what to do with it at first. This is exactly what happened with social media in 2006 and 2007. Inevitably, businesses learn how to use the technology by watching what others do with it, and then amending it to fit their own market circumstances. This is what is happening right now with big data and predictive analytics. People are learning by evaluating case histories and success stories. In these early stages, the most important thing is to identify and deconstruct use cases for blockchain technology. Book Patrick to deliver the latest examples to your attendees. He is will known to explain complicated subjects in simple language, and he will present the topic in an understandable and empowering way.
 


 

Business Implications of Blockchain

 
There are both short-term and long-term implications of blockchain. Ironically, the companies most threatened by blockchain are precisely the ones investing most in it. In the short-term, blockchain can streamline operations with smart contracts, smart assets, digital payments, digital identity and clearing & settlement. Increased efficiencies will result in higher profits. But in the long-term, blockchain may result in the elimination of banks (and other financial intermediaries) entirely. Latency issues are the primary hurdle at this point. As the technology advances, blockchain systems will handle higher volumes of transactions and more complex transactions. At that point, financial services companies may see their business models threatened. These long-term implications will emerge after 2025.
 
Currently, the majority of Bitcoin trading comes from China. Investors are hording Bitcoin, speculating on future price appreciation. The supply of Bitcoin is limited to 21 million, so the limited supply will translate into higher prices if customer adoption continues. The easiest way to invest in the blockchain revolution is to buy and hold different cryptocurrencies like Bitcoin, Etherium, Litecoin, Ripple and Monero among many others. Another way to invest is to use hedgefunds like MetaStable, Polychain Capital or Ether Capital. The Token Fund is creating an ETF-style option which diversifies invested capital across many different cryptocurrencies, and the SEC will likely approve regular ETFs in the space by the end of 2017.
 

Blockchain Startups and Early Use Cases

 
Patrick builds his keynote programs by accumulating and studying use cases. In new fields like Blockchain, the best way to do that is by following the startups and venture capital investments in the space. Some of the leading Blockchain startups include:

  • Ethereum: decentralized, secure, application environment enables for computation (Internet 2.0)
  • Backfeed: essentially an operating system for Decentralized Autonomous Organizations (DAO)
  • Stock.It: enabling the Sharing Economy with no central governing authority (intersection of IoT and Blockchain)
  • Consenys: a loose federation of Blockchains, leveraging collective skills
  • Colony: facilitating decentralized autonomous organization (measuring productivity)
  • Provenance: building transparent and decentralized supply chains
  • Ethcore: developing enterprise software to leverage various decentralized technologies
  • Enigma: decentralized cloud platform that guarantees privacy for individual and enterprise users
  • IPFS (Interplanetary File System): a common file system to facilitate sharing; a single BitTorrent swarm
  • Plex: remote, real-time automotive diagnostics for insurance companies

 


 

Blockchain Keynote Speech

 
The blockchain protocol is still evolving. These are the early days of a new technology revolution. Patrick updates his keynote program regularly and constantly incorporates the latest developments from the Bitcoin universe and the related applications of distributed ledger technology in other fields. Within the financial services industry, companies like Propser (peer-to-peer lending marketplace), Kasist (mobile virtual specialist), Osper (financial freedom for young people), TransferWise (the clever new way to beat bank fees), kickstarter (crowdfunding), Kiva (microfinance) and Lending Club (better rates, together) are already disrupting existing market structures. Blockchain technology will dramatically accelerate this disruption process. Patrick Schwerdtfeger has a powerful and empowering keynote program and is certainly more affordable than Blythe Masters (Digital Asset), Roger Ver (Coyote WallStreet) or Peter Smith (Blockchain).
 


 
When asked how soon Blockchain technology will revolutionize financial industries, Kevin Day from Riskebiz Capital Management responded as follows:
 
Yes, I think it is very close. Things are moving very fast now. Whereas only 9 months ago if I asked a large bank or insurance company about blockchain technology, they would dismiss it as a bitcoin ponzi scheme, that is if they had even heard of it at all. Now they’re setting up internal blockchain technology groups and taking it very seriously.

I think that over the next year or two, everyone from large companies to small startups will be exploring the potential of blockchain technology and looking for possible applications. Everyone is looking for the “aha” moment for the technology. This is what VC’s are hoping that their blockchain technology startups will produce.

The first big impact will be seen in the money transfer space, particularly remittances. Companies like Western Union that have built their business on charging large fees to send money will see their profits eroded and blockchain tech competitors effectively making them obsolete. The next area after money transfer, will be asset transfer. This is where blockchain is used to transfer things like stock certificates. Even now, NASDAQ is putting lots of resources in this area. I think this will happen over the next couple of years.

The most interesting and probably biggest area of change will come with the introduction of smart contracts. People are already tinkering with this on platforms like Ethereum, but the applications now are trivial, like sending a payment to turn on a light. As they get more sophisticated, they will allow for the automation of many processes, and we’ll see the first decentralized autonomous organizations.

Blockchain technology, combined with the other hardware and software technologies such as mobile, will push things along very quickly. So quickly that I think the very way that people manage financial services will change within 2-3 years. I think Silicon Valley is salivating at the opportunity to enter the banking business, especially with banks being relatively slow to adopt change and probably in a bit of denial as to how much their existing model needs to change. It’s not just the technology, but also the tremendous financial resources of tech companies. Apple’s pockets are so deep they could buy Bank of America in cash and have a hundred billion left over. Blockchain tech combined with all the user intelligence that Google, Apple, etc. have means that almost overnight, I think new banking services will be introduced. I think that early teens will not be going to a traditional bank when they setup their first bank account in a few years, they’ll want complete control over their money and have a bitcoin address, or whatever bitcoin has evolved into.

It will all go hand in hand with the other rapid changes taking place, like the way people move around (Uber), travel (Air BnB), entertain (Tor streaming and downloads), etc. It’s all about P2P, disintermediation, and blockchain tech fits right in with the payment systems that tie everything together.

It’s an overused comparison, but I think blockchain right now is like the Internet circa 1994 – it was there, but clunky, techie, unproven, basically just for geeks. But as soon as that “aha” app came out (Netscape), it went mainstream, and within a couple of years, the dotcom boom began. Now we can’t imagine the world functioning without the Internet.
 

Blockchain Questions and Answers

 
Here are a series of questions and answers that originated from a virtual event that Patrick Schwerdtfeger contributed to for SAP and their 2018 Global Innovation Day. The webinar had over 1,300 attendees, and these where the questions that were submitted after the session.

How is consensus given from the nodes? How do we know that the latest block added to the chain is correct?

Each new block has to be verified by 51% of the nodes before it is added to the blockchain.

What’s the efficiency of approval from distributed thousands of nodes?

It takes about 10 minutes to validte each new block on the blockchain.

Can you name a few lessons learned from the cotton example? What are your thoughts on standards and interoperability?

The primary lesson from the cotton POC is that these transactions can processed without human interference. In my research, I did not find a summary of lessons learned beyond that obvious initial acknowledgement. Interoperability will be a major issue, particularly for ERP providers, during the implementation phase of blockchain systems.

How this technology is included in ERP (S/4 HANA)?

To my knowledge, few ERP providers have build sufficient softward infrastructure to support blockchain systems, although I am not an expert at specific ERP capabilities. I believe this is a major opportunity for enterprise providers to support the coming transition.

How does SAP use or plan to use BlockChain technology?

I have no idea what SAP’s plans are with respect to blockchain. I believe there is a large opportunity for ERP providers to build the software infrastructure to facilitate blockchain applications.

Does the security of the blockchain solely depend on the number of nodes?

The number of nodes plays a major role, but even a blockchain with a small number of nodes is quite secure, especially because of the summary hash system from each block to the previous block.

How about energy (amount of computing involved) efficiency of Blockchain? It is being raised as one of roadblocks for BCh adoption.

Blockchain mining is characterized by massive duplication of work and enormous amounts of wasted energy. This is the biggest problem with Bitcoin, but there are other tokens being created which require far less. There will always be duplicated work and wasted energy, but it will be improved significantly from the current Bitcoin reality. Litecoin is a good example.

Why can’t a centralized instance between ‘willing partners’ digitize (with same if/then algorithms) the same process of tracking goods? Do you think blockchain is more of a change management tool (to get everyone excited) than really a path-breaking technology which everyone is finding difficult to scale?

Yes, the hype is overblown, but there are indeed relevant applications for blockchain, particularly because it facilitates a decentralized system where no one party is in control. That benefit cannot be replicated in a centralized database environment.

I missed the first part of the presentation, but if it was not mentioned yet. Are there transaction fees?

So if I want to send 1 BTC (or any other cryptocurrency) to you, will I pay something extra as a transaction fee? Like 1,0001 BTC instead of pure 1 BTC? If yes, are there ways to avoid it? To do transactions without cost

Yes, there are indeed fees, and they depend on the exchange being used. Also, the fees have been going up recently because of a variety of factors, including the amount of work required to verify each successive block. To my knowledge, there is no way to avoid fees entirely.
other than the finacicial services / crypto there are lot of POC are there any actual productive uses cases with blockchain

POCs are leading to pilot programs, but actual implementations and deployments are still few and far between. Of course, Bitcoin is a fully deployed platform. There are also some simple applications like the dock.io social network. But once one large player deploys, adoption will happen quickly, owing to the decentralized nature of the technology.

What happens if the server(s) a given Node is running on fails? I am thinking about how DR/ system redundancy, etc. is handled in the distributed ledger model.

If one node goes down, the rest of the system continues unaffected. Keep in mind that anyone can become a node on the Bitcoin blockchain, but there are many individual players who come and go on a random basis. It doesn’t affect anything because the 51% consensus requirement continues in either case.

Are you seeing some blockchain based traction in the Business Travel space?

There are two primary opportunities in the business travel space. First, blockchain can facilitate digital identity and that could significantly reduce the risk of an unauthorized data breach. Second, it could be used in the processing of individual trasactions (described in the presentation as the supply chain management use case).

Every process involved / all components in blockchain needs automation to be fully complaint? If any process is manually done then is it onsidered as fully complaint to be called blockchain?

Each node on a blockchain distribute ledger will need to download and run the corresponding software foundation. As soon as that software can operate as intended, other unrelated things may indeed be done manually. But the core components of the blockchain as well as the software mechanism connecting the node to the rest of the network must be fully operational as designed.

Being a student, I see my future in block chain technology and for that reason,I am writing my master thesis on block chain technology role in insurance industry. I need to know that how we can verify one block chain? And is it possible that I can get more useful study material regarding block chain?

There are enormous resources online describing the specific operations of blockchain technology. Each blockchain is designed differently, so they each have slightly different requirements. I encourage you to dig into the available online resources within the specific use cases you are studying.

No admin costs for blockchain? Are the servers operated for free?

You are absolutely correct. Servers cost money to own and operate. I wasn’t clear in my statement. Once built and deployed, the blockchain should not require admin expenses like employee salaries of order entry, order tracking, project management, audit, compliance, etc.

who maintains the nodes? I there no admin cost there?

In a public blockchain, anyone can become a node on the network. On a private blockchain, it is limited to participating parties. There are costs associated with server ownership, electricity, etc., but the blockchain could eliminate many administrative roles like order entry, order tracking, project management, audit, and complicance, etc.

can you please throw light upon GDPR compliance in blockchain

Blockchain can be used in GDPR applications, but part of that regulatory framework requires the “right to be forgotten” which is something that blockchain cannot deliver. So for maintaining records that do NOT require the “right to be forgotten”, blockchain can provide a robust and immutable solution.

Is SAP planning to have an own blockchain?

I don’t know what SAP’s plans are with respect to blockchain. I think there is a big opportunity for SAP to build the softward infrastructure to support blockchain applications.

Isn’t a blockchain completely run on a cloud platform provider also a centralized model? The cloud provider has the majority of compute power and so has the power to change the blockchain. Am I wrong in this?

On a public blockchain, anyone can be a node. Some people may start nodes and run them from a cloud platform, but most run it from their own onsite machines. There is no central authority in a blockchain system, No one party can make a change to the blockchain. It can only be done through 51% consensus.

Cloud is centralized, On premise is de-centraized. Do you think blockchain will drive de-cloudification back to on prem.?

Within the context of operating a node on a blockchain network, yes, it will generally be operated onsite. But individual nodes may choose to run their nodes from a cloud platform. That’s up to them. But generally speaking, the trend towards cloud continues. The latest trend is toward hybrid clouds “on the edge”, bringing data processing closer to the customer.

“What is the consequence of making an incorrect entry in blockchain w.r.t traceability aspect?
How can that be rectified?”

If there is a mistake on the blockchain, a corrective subsequent entry must be used to correct it. You can’t go back and change the original, but you can amend it with a subsequent entry.

Please tell more about GDPR use case

Blockchain can be used in GDPR applications, but part of that regulatory framework requires the “right to be forgotten” which is something that blockchain cannot deliver. So for maintaining records that do NOT require the “right to be forgotten”, blockchain can provide a robust and immutable solution.

What is the business model behind ID 2020? who and how makes money at the end of the day? To my knowledge, nobody makes a profit on ID2020. It’s essentially a public utility, paid for by UN agencies, NGOs, governments and other interested parties. Blockchain does not generate revenue. It only reduces expenses by delivering efficiencies.

If everything is decentralized .. is there any need for governance ..

There will always be a need for governance, but the interests of governance will increasingly be at odds with the decentralization provided by blockchain technologies.

Do you expect in the future that banks will create their own crypto currency?

Yes, I think some banks will attempt to create their own tokens, but those tokens will have to be as decentralized as Bitcoin or Ethereum if they hope to gain traction with the public. Any attempts to “control” their tokens or monitor purchasing behavior of users will be met with disdain and disgust.

who is responsible for the infrastructure that “nobody” ons?

Once a network of nodes exist, the platform’s functioning becomes the responsibility of those nodes, through consensus.

Have the lifespan of data been considered?

I’m sorry but I don’t understand this question. The lifespan of data depends on the medium on which it is stored.

Where our money will reside over bitcoin network ? Like today we have bank.

The money is stored on digital wallets. Most of these wallets are on exchanges like Coinbase, but you can also have offline wallets like a USB drive. That is called “cold storage.”

any valid use case in aircraft manufacturing?

There are two use cases. The first is the use of blockchain to streamline the supply chain management process. The second is to trace individual component parts that become part of the finished aircraft.

If you have these items without the companies behind, then how can things like updates or patches for vulnerabilities be applied?

This is a primary danger of blockchain-based platforms. If a vulnerability is found, it can be rampantly exploited until the network of nodes agrees through consensus to bug-fixing improvements.

Who has the incentive, who gains from, running the blockchain cluster?

Arguably, nobody gains by operating a node on a blockchain network. However, individuals can elevate their own credibility and exposure by being involved in the ecosystem. The same is true in the open source community. Those who contribute to the platform can market themselves as experts and can thereby secure development contracts and/or consulting opportunities as a result.

Whats you view on the point that banks would cut their own profit if they start using these new blockchain technologies e.g money transfer with ripple?

It’s true. They would lose profit dollars by adopting these technologies. But they are also being attacked from every angle by Fintech startups looking to steal their revenue, so they are forced to pursue efficiencies themselves. The banks have no choice. Their business is being disrupted whether they like it or not. So at this stage, they need to preserve whatever business they can, even if it means a reduction in margins.

Given information written to the block can’t be removed – how do we address things like GDPR and other privacy issues. GDPR requires the “right to be forgotten” and that is not possible on blockchain. As such, blockchain will only be applicable in those instances where that right is not required.

How do you measure the public trust of blockchain-driven models versus institution-driven models (example: Bank vs. peer-to-peer, Uber vs peer-to-peer)?

It will take time for the public, en masse, to trust these new platforms. It will creep up over time. Most of that will be driven by (1) awareness and (2) education. I don’t know where that trust level is today, but I guarantee it’s a lot higher than it was 5 years ago, and it will be much higher 5 years from now.

In which sectors are smart contracts already being used/implemented today?

Software is full of if-then statements, so in that sense, all companies already use it. APIs are an example of software solutions agreed upon by multiple parties. Again, that’s a form of smart contracts as well. But in the blockchain context, they are mostly being used by blockchain startups like Slock.it, Etherparty, Populous, and Fizzy AXA.

What is the implication for SAP in say 10 years with the ramping up of block-chain? Does it impact our digital core business?

The challenge for SAP will be to support the interoperability of different participants in a network, all connected through blockchain technology. Once a standard protocol emerges for different use cases (like supply chain management, for example), it will be important for SAP to aggressively built the software infrastructure needed to support that protocol.

Bitcoin has ups and downs in value. Talk about the acceptance on Bitcoin based on the speculative nature of its value.

The best measure to see where the value of Bitcoin is going is the number of daily transactions. Just search for “Bitcoin daily transactions” on Google and you’ll find it immediately. What you’ll notice is that the usage is not going up. People are not using it to conduct commerce. They’re only purchasing it as a speculative investment. In order for the value to go up, we have to see those daily usage figures go up as well.

How the disputes may be handled in the blockchain world?

This is an open question, and I don’t know the answer. There will undoubtedly be conflicts along the way and it will be up to each network, through consensus, to determine how these conflicts are resolved.

With data distributed, how is GDPR a usecase with blockchain? Isnt the data more openly available for all on that specific network?

Yes, the data on a public blockchain is public, by definition, but it is also encrypted. Also, for certain categories of data, the immutability of the record may be more important than privacy. And finally, in many cases, as a result of the “right to be forgotten” requirements, blockchain may be unsuitable for GDPR applications.

With blockchain is there a possibility that only a few nodes in the chain know about the specifics of a transaction while others just know that a transaction has just happened?

That depends on the way the blockchain is designed. Yes, in some cases, the specifics of transactions are maintained by some nodes while only summary information is maintained by the whole network. In other cases, the details are accumulated by some nodes and then only shared across the network at certain times.

Have you considered directed acyclic graphs? Blockchain will probably never become mainstream due to scaling issues

I’m sorry but I don’t know anything about acyclic graphs. I believe the scalability issues will be resolved through (1) better designed blockchain protocols and (2) the ongoing acceleration of data process, data bandwidth, and data storage.

In a “decentralized’ world … what is the “incentive” business model that get the “foundation” off the ground?

Look to our media and political environments. Both are in a state of anarchy already, but there are still winners and losers. You can still make money. Success amidst anarchy requires (1) leadership, (2) defiance and (3) unselfishness. Check out my book “Anarchy, Inc.” for a lot more detail on that.

What are the top applications of Blockchain that you are seeing in Life Sciences/Pharma industry?

The primary use cases include (1) supply chain management and (2) date and time stamps for traceability.

What entities are currently creating the smart contracts? Thinking along the Title/Morgage world. Seems like there are opportunities for new enterprises that are heavily legal and techno savvy.

Software is full of if-then statements, so in that sense, all companies already use smart contracts. APIs are an example of software solutions agreed upon by multiple parties. Again, that’s a form of smart contracts as well. But in the blockchain context, they are mostly being used by blockchain startups like Slock.it, Etherparty, Populous, and Fizzy AXA. With the mortgage industry, follow the Fintech startups like Rocket Mortgage and Affirm to see what they’re doing. I don’t believe either of them are using blockchain technologies yet, but I’m fairly sure the innovators will come from that corner.

Is there a clear connection between IoT and blockchain technology that SAP can use to it’s advantage?

The IoT is simply the vehicle through which data is accumulated. When companies begin deploying blockchain applications, it will be important for SAP to aggressively develop the software infrastructure to facilitate implementation and interoperability.

how do you secure the payment for mortgage in the blockchain? oracle problem?

To my knowledge, no large ERP provider has developed the software infrastructure necessary to support blockchain applications between companies. Having said that, the transfer of funds can be a requirement of a smart contract, verified by the recipient.

refugees example: is it possible to have more than one identity in the System as refugee?

No, the system is designed to allow only one entry per person. I know it includes both demographic and biometric data, but I am not sure of the specific data points required. I suspect this information would be included on the ID2020 website.

What are the cost considerations while thinking about the decision of switching from traditional DBs to blockchain?

There will be significant costs to migrate from the current paradigm to the blockchain paradigm, but most market participants will have no choice. If they want to continue doing business with their large suppliers or their large customers, they will be forced to adopt the blockchain approach. I dont’ know who will delpoy first, but it’s inevitable that someone will. Once that happens, migration will happen quickly.

what do you think about the computer resource consumption (e.g. eletricity) of blockchain technologies, like bltcoin

This is the primary problem with Bitcoin. The difficulty of mining results in (1) the latency issues, (2) massive duplicate work and (3) insane power consumption. As a result, it’s unlikely that Bitcoin will ever be used to conduct regular commerce. But there are many other tokens that are designed with more efficient protocols, and they may eventually gain broad market adoption.

blockchain is a technology – so why is bitcoin so expensive? And why is there so much variance in the “values” of the cryptocurrencies?

The value of Bitcoin is only determined by supply and demand. There will never be more than 21 million Bitcoin, so it’s a limited resource like gold. There are currently about 16.4 million Bitcoin in circulation. By contrast, there are 100 billion Ripple tokens possible, so the supply and demand intersection has to be divided by the number of tokens in circulation to determine the price. If there are 5000x more Ripple, it makes sense that the per unit price is much lower.

Computing technology is already available to break blockchain security, this is a fundamental flaw. How is this being addressed?

To my knowledge, today’s computing power is not sufficient to hack an established blockchain with a significant number of nodes. Nobody has successfully hacked the Bitcoin blockchain so far, so it is indeed very robust. If someone figures out quantum computing, where multiple states of being can be calculated simultaneously, that would invalidate the current security inherent in blockchain platforms.

As you just mentioned EU GDPR, what ideas are there to enable individuals execute their right-to-be-forgotten when the data is stored in a block chain?

Blockchain cannot support the “right to be forgotten.” As such, blockchain will not be a solution for data systems that have that requirement. However, there are plenty of other areas where blockchain can support data security and privacy. I’m not an expert in GDPR, but it will be interesting to see which specific use cases emerge for blockchain in the GDPR framework.

What use cases do you see emerging in distributed power generation?

There are already marketplaces emerging to allow individual homeowners to buy and sell power directly from each other. Of course, these marketplaces to not need to be built on blockchain technology. We have plenty of similar marketplaces already (including Uber and Airbnb) but I think it’s inevitable that an open source blockchain-based marketplace will merge in the next few years.

What is the business model for the Open Source apps like LibreTaxi if it’s all peer-to-peer and cuts out the “middle man”?

In the future, we will have only (1) providers and (2) customers. There will be no brokers. There will be no middlement. Nobody will make a profit by maintaining a decentralized open source platform like Libretaxi. Instead, it will be a business model for drivers and a service available for consumers.

Are there some use cases of block chain and distributed ledger – by industry that we(SAP) have been involved in.
It will be great if you could share them.

This is a great question but I am not aware of such a resource. Please ask your contacts at SAP. If such a listing exists, I would love to see it myself!

Who is the contact point in the decentralized systems like block chains?

There is no central contact for a blockchain platform. Any individual node would be your best bet. However, the participants to each marketplace will undoubtedly publish lots of supporting documentation in an attempt to secure consulting opportunities, including answering questions from users. There are tons of resources like this already for Bitcoin and Ethereum among others.

Is it true that blockchain processing takes huge amounts of electricity? I have heard that it’s not considered “green” for this reason.

You are 100% correct. The process of “mining” is extremely power intensive, and thousands of nodes are all doing the exact same work, duplicating each others efforts for no additional benefit. This is the primary problem with Bitcoin, resulting in the (1) latency issues and (2) insane power consumption. But there are many other tokens that hvae been designed to mitigate this problem.

Are there any downsides to blockchain technology ? For example, I understood there are limitations to the number of transactions that can be processed / decoded. What other possible issues exist and what’s your view on how they can be solved?

The biggest problems with cryptocurrencies are (1) the lack of recourse, (2) inefficient power consumption, and (3) latency issues limiting the number of trasactions that can be processed in a given time period. But advances in data processing, data storage, and data bandwidth will mitigate many of these problems. There are also many new tokens designed to avoid these obstacles.

What do you think about the lightning network as an off-chain solution for Bitcoin scalability?

The lightning network shows a lot of promise but I am not an expert. There’s lots of hype about them right now, and I’m sure it’s based on real advantages, but I really can’t speak to the future potential of their approach. It’s like betting on Friendster or Myspace before Facebook came along. It’s inevitable that improvements will emerge to make blockchain more scalable than it is today.

How bitcoin technology does authorization, Like this is legitimate ledger transaction or not?

Once both sides of the transaction (buyer and seller) have accepted it, it gets added to the list of transactions which will make up the next block. If only one party accepts the transaction but the other does not, it fails and has to be initiated again.

How green is blockchain technology? Enery consumption could be an problem?

The process of “mining” is extremely power intensive, and thousands of nodes are all doing the exact same work, duplicating each others efforts for no additional benefit. This is the primary problem with Bitcoin, resulting in the (1) latency issues and (2) insane power consumption. But there are many other tokens that hvae been designed to mitigate this problem.

Your perspective on the importance of the economics in form of crypto-tokens (e.g. utility tokens) sometime used on different blockchain networks/communities – are such models essentially critical for the sustainability/ continuity of those networks/communities?

I’m not sure I understand this question. I’m sorry. There’s no question that any marketplace (or community) needs sufficient supply and demand in order to function properly. The only thing that is truly “disruptive” is customer adoption. If nobody adopts it, it is not disruptive. If a lot of people adopt it, it is very disruptive. I hope that helps.

Blockchain based currencies have often a liquidity issues. What is the key to fix them from your perspective?

Most cryptocurrencies have very little interest. Broad market adoption is required. It’s just like stocks. If nobody knows about the company, and nobody cares about their business model, liquidity dries up and the stock price plummets. The only way to solve the liquidity issues is to get broad market adoption. That will happen either as a result of (1) superior technology or (2) great marketing (pump and dump campaigns come to mind).

keeping the transactions in blockchain like a purchase order..does it make sense? how well can it go with the policies like GDPR?

Blockchain can be used in GDPR applications, but part of that regulatory framework requires the “right to be forgotten” which is something that blockchain cannot deliver. So for maintaining records that do NOT require the “right to be forgotten”, blockchain can provide a robust and immutable solution.

In a supply chain scenario where multiple parties are involved, how many parties would be required to be on a Blockchain for it to be effective and to avoid collusion between parties?

This is a great question. I think it would depend on the situation, but my instinct would be to have at least a dozen nodes on the network, at a minimum. Also, in a private blockchain, you could require 100% consensus among participating nodes, eliminating the opportunity for collusion.
Please name 3 jobs that would be eliminated in the near future because of Blockchain. Order entry, order tracking, and audit functions. Keep in mind that these job eliminations will happen over time as confidence builds in the new system. I’m not expecting widespread layoffs of admins in the next few years.

When gurus such as buffet and Charlie munger are bashing crypto currencies- do you anticipate a reduction in overall block chain based platforms- digital ledgers/crypto currency etc.

There will always be people who are for or against any given technology. Those individuals may affect the speed of adoption. And yes, they may halt adoption entirely. In the case of blockchain, so much money has already been pumped into the process that I doubt anything can stop it from advancing further. The real test will be after broad deployment. A lot of people will be watching to see what efficiencies are realized along the way. If those efficiencies don’t materialize, it’s possible that the technology will reverse course or morph into something different.

is there a specific range of nodes to make it efficiently (low latency) and securely distributed

This depends on whether (1) it’s a public blockchain or a private blockchain, (2) the percentage required for consensus approval, (3) the design of the ‘proof of work’ mining requirements, and (4) application of the record. For example, a private blockchain with 100% consensus requirement could be efficient with just 2 nodes.

When we say decentralized, is the data replicated on all the nodes of the network? As a result, is the data footprint higher with blockchain compared to database model?

Yes, absolutely. The data is duplicated on every individual node, and the data footprint is WAY larger than a database environment. The only reason blockchain is even possible is because the cost structure for data processing and data storage has plummeted over the past 50 yeras. At this point, the insane duplication inherent in blockchain platforms does not represent a significant obstacle, but it is indeed inefficient in that regard.

how possible is the 51% attack for private blockchain?

To my knowledge, current technology is not sufficient to hack 51% of the nodes of an established blockchain with a large number of nodes. If someone figures out quantum computing, where multiple states can be calculated simultaneously, the security of blockchain would be rendered ineffective.

Obviously this new technology will change also a lot of already existing jobs, so how about new jobs? Do you have some examples of new jobs that will be created in the future ( except BC developers)?

Certainly, software developers are safe for now, especially with new technologies like blockchain. But speaking more broadly with respect to technology and automation, the jobs that will be safe in the future include (1) those requiring complex human relationships, (2) those involving unusual one-off problem solving capabilities, and (3) those requiring true creativity (including artists, architects, entrepreneurs, even politicians).

can SAP mine Bitcoins in their Data Center?

Yes, absolutely. If SAP wanted to maintain a node on the Bitcoin blockchain, they could indeed do that.

When many nodes in a blockchain are shut down/retired/down-for-maintenance/become obsolete, how are the transactions verified because it is understood that all nodes need to validate transactions?

The percentage of nodes required for consensus is different on different platforms. For Bitcoin, the requirement is 51% but there are thousands of notes, so it is highly unlikely that half would be down at any one time. Besides, the requirement would simply be applied to those nodes that are active at that time. People start nodes and shut them down again on a regular basis.

How do you want to reduce power consumption of blockchain? Consensus over all nodes and all nodes holding all (or most) of the blockchain data is simply a no-go when we are talking about billions of nodes… Even improvements in storage/processing will never outweigh that. I.e., the amount of data and processing is increasing with the product of number of transactions and number of participants.

The process of “mining” is extremely power intensive, and thousands of nodes are all doing the exact same work, duplicating each others efforts for no additional benefit. This is the primary problem with Bitcoin, resulting in the (1) latency issues and (2) insane power consumption. But there are many other tokens that hvae been designed to mitigate this problem. Also, for context, there will never be billions of nodes, but I do understand your point. In the long run, I believe some other cryptocurrency, not Bitcoin, will emerge for conducting regular commerce. Bitcoin will probably function similar to gold.

How should SAP make money, using blockchain, what is one example for a valuable service to our furtune 500 customers?

I believe SAP should aggressively develop the software infrastructure necessary to support blockchain applications. They should watch for emerging protocols that are gaining traction, and then race to support those protocols. Then, it would make sense to cultivate an army of implementation consultants that can help enterprise clients implement the technology. Keep in mind that many of them may be ‘forced’ into adoption by buying or selling to another entity who has deployed blockchain already. Once that starts to happen, there will be a mad scramble to deploy en masse. The people who made the most money during the Gold Rush were those who sold the shovels!
 

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