Bettina Warburg - Robots with wallets: A.I. in the Blockchain

okay let's move on to our first keynote of today Bettina Warburg is co-founder of animal ventures a startup studio supporting fortune 500 executives with emergent technologies focusing on blockchain AI and IOT in this keynote she will show how these three technologies will eliminate age old models of commerce now we do have a section of Q&A at the end so please do head on into the app and click on the asking vote section if you want to submit your question via that means or we can do it via the mics on the floor but for now please give a very warm welcome to better know Warburg [Applause] our future economy will be much more decentralized we've all heard stories of robots to have wallets or of drones that are going to be making last mile deliveries but these future stories they sound a little random right they don't ground us in an understanding about where we're headed and where our economy's headed and there's sort of a reason for that mostly it's because we actually use the same part of our brain to imagine the future as we do to remember the past so we're sort of stuck with old paradigms things that don't necessarily help us explain some of our innovations forward so today I actually want to use some of those old paradigms the stories of how we've done economics and trade for a long time to help imagine where we're headed and why we're headed into an decentralized economy so if you think back to our early agrarian days we used to trade much more one-to-one we had a lot of direct control over our trade because we lived in these smaller societies but as the distance in our trade grew and the complexity grew we ended up with a lot more uncertainty over how our trades were going to go to cope with that uncertainty we basically built up institutions institutions like banks government entities different rules that helped codify our exchange over greater distances and act as middlemen to facilitate our trade now eventually we put these same institutions online we built platform marketplaces like Amazon eBay Alibaba and these really are just a continuation of this story another institution that helps us lower our uncertainty about one another at greater and greater distances so that we could do business together now that's kind of a fast history of economics but we're actually changing yet again and now instead of relying on these traditional institutions even the digital ones we've actually created a technology but does the exact same thing and lowers our uncertainty about one another but instead of using an institution or a middleman to do this we're actually using blockchain technology so I want to tell you a little more about blockchain and why it's at the core of what we talk about as this decentralized economy now blockchain is kind of a buzzword you've probably heard it in different innovation forums and and talked about in different ways but I actually like to use rather familiar analogy to help bring that sort of more to life what does blockchain really do and the analogy is that of a checkbook so when you go to write a cheque which maybe you do today or you don't anymore you are basically writing down the terms of a transaction right I'm gonna pay you X dollars and I sign it at the bottom with my name to authenticate it and then eventually your bank and my bank will use our routing numbers and the account numbers to execute that transaction now over time as you fill out all the checks in a checkbook you end up with a bunch of different carbon copies left over and this is essentially what we can call a block of data in a blockchain a block really just represents a lump of different transactions that have happened over a period of time that are cryptographically linked to a set of previous transactions and so they form a chain now the main difference here though is that instead of using your bank in my bank to transact and execute our transactions we're actually using a whole network of computers that are running the same software and coming to agreement around the transactions that happen and so we've created a system to you eliminate a middleman of sorts because there's no central administrator to this network it's literally run by all of the participating nodes so this gives us like a global decentralized database of all of these transactions kind of like a global version of everybody's checkbook now if we think about the story of the Internet we have a similar evolution with blockchain we have public block chains similar to sort of our public Internet they're free they're free is and open to everyone anyone can read or write to it the same way you can with our current internet we also have private blockchains and private blockchains look more like an intranet they're scoped to a set of known participants the same way you could scope an intranet to a company and they can have slightly different governance structures so we have sort of both of these architectures public block chains that anyone can read or write to and then more private versions now this all started in 2008 with the publication of a white paper that described Bitcoin as a peer-to-peer electronic cash system now today I think that coins that around 94 billion dollar market cap in a rather short amount of time but we've actually already evolved past this original architecture Bitcoin functioned much more as a tool for these more financial transactions similar to the checkbook example I described between accounts but today we've actually gone past that we've created newer block chains like the etherium Network and others that actually generalize this infrastructure and allow us to do many kinds of transactions across this peer-to-peer set of intertwined computers so today we can actually think of modern-day block chains as global decentralized virtual computers so it's thinking of this architecture as one large computer that you can actually write applications to and have executed in this decentralized way without middlemen so the technology stack for block chains is not that dissimilar from our digital technologies today we have core infrastructure so for the internet that's things like tcp/ip and SMTP the protocols that define how our networks communicate for blockchain we have core protocols as well those that define the Bitcoin network or the etherium network or others we also have middleware right in our modern digital lives that's things like api's and libraries and then in blockchain that's more like a client that you use to communicate with the core infrastructure and then at the top we have applications if we think about our digital era we use many many kinds of applications everything from email to things like uber now today in blockchains we're seeing a proliferation of application experiments people are starting to try different proofs of concept to imagine how we can use a decentralized infrastructure to run software so this application space is quite different and the main difference for blockchain applications is that they actually run on something called smart contracts so think back to that checkbook example cheques are actually a sort of contract right there are an IOU they're the terms of the deal and they're signed we can actually use that same thinking and apply it to anything that you can write as as computer readable so any kind of terms if this then that that you can write in code can get executed across this decentralized computer this allows us to automate not only business logic so the terms of our deal but actually also governance and it's an important step towards a decentralized economy so this future might still sound rather abstract and strange or far off but I wanted to actually take it a little bit further when we think about all of these times that we've innovated in history to allow us to lower our uncertainty about one another but expand the scope and scale of our trade we've done this in different iterations but we're still talking about sort of trade right we're talking about a buyer and a seller well I want to take it one step further and have you think about what goes underneath our trade what are the goods and products that we trade in general and this is something people don't often think about but basically everything we buy or use has a supply chain it comes from somewhere from some raw material and goes through many different kinds of transactions to end up as a finished good so when we talk about starting to decentralize the architecture by which we trade and transact we can start to imagine more decentralized supply chains as well because those are just a set of transactions that end up in a finished good what this means is we need to actually go beyond thinking about trade to thinking about how we design make deliver and even coordinate all of these products as they flow in our global trade now don't get me wrong our modern supply chains are innovating in lots of ways we have many different kinds of sort of AI or intelligence at the top that are starting to help us make better decisions about forecasting on demand or even on the supply side we're using a lot of these algorithms to just help make better decisions based on the information we have we also have this sort of middle layer of much more connected devices all of the things you've seen outside of this room that are getting embedded as sensors and connected devices or smart machines across our manufacturing our production our distribution and logistics systems so we're seeing machinery 80 and devices give us a lot more real-time information and help us sort of understand what's happening with our products over time but this bottom layer this this term that we use called maintaining Network State we've actually never really had this and part of the reason is most of these systems these intelligent systems or even the devices we're using they communicate with a set of specific enterprises they're scoped to the firm or a business they're not shared with everyone and so what we're actually able to use blockchain to do is unlock this bottom layer this idea of a network state which you can think of as shared reality how can we actually have a shared reality that we transact on and use all of this data and intelligence to actually make more informed choices and decisions so blockchain is in some ways giving us autonomous networked state the ability to manage all that information and make choices on it by transacting it without middlemen what autonomous network state gives us is something we had animal ventures called machine trust so if you take this one step further rather than just these innovations in the course of human history to improve how we trade at scale we can also include how machines trade at scale and that brings us back to this idea at the beginning of robots that have wallets right robots you should think of as the next consumer class and they actually need an infrastructure upon which to transact and trade and use data and all of these things and so this is the role of network state and it's part of what will take us forward to a decentralized economy now people often ask us how do we thrive in this new world what's going to happen to humans and a decentralized economy and we're very fortunate at animal ventures to get to talk to a lot of different luminaries we've had conversations recently with people like Kevin Kelly I was the founding editor of Wired magazine and recently wrote a book called the inevitable which I highly recommend or general david petraeus who's been in the intelligence space for a very long time and as the four-star general and again and again these different individuals have honed in on this idea that we actually need to learn how to learn so we need to learn how to develop new paradigms and actually innovate faster and then we also need to learn how to unlearn if you get rid of some of the old assumptions we've had about our trade but also about just how we do business together so I always like to bring up Leonardo da Vinci who I think actually really embodies this future he was the epitome of a combination of artist and scientist this is a image of his sort of imagination of a flying machine of a future helicopter and we're actually going to need to cultivate both of these skill sets because on the one hand if our whole supply chain structures and the trade that we do is going to decentralize in different ways we're going to need to become the design inputs to these more auda systems we need much more creativity that gets to flow through and get prototyped faster and faster and that leads us to the scientist part we need to be able to experiment much more quickly using all of this new infrastructure we can get our ideas out into the open faster test them simulate them even and get to new solutions quicker and we won't be doing this alone right we'll be working alongside machines and even new kinds of organizational structures to be learning together and creating value together in this decentralized economy so it won't just be about humans needing to learn and unlearn we actually need to train our machines to learn and also unlearn so this I want to actually go back to the beginning and say that as we move to this decentralized economy we've continued this evolution of lowering our uncertainty over time but we've also expanded beyond trade to include how we make and design our things and now to include how machines will help us make and design our things and trade those things and I don't want you to think that I'm describing this as a better future because I'm actually not I'm describing it as inevitable I'd like to steal Kevin Kelly's term on that which is basically he argues different technologies have different biases and a lot of the technologies we have today are in fact biased toward decentralization which means even if we don't think it's a better future it may in fact just be inevitable that we start to unwind a lot of these older paradigms of trade or of how we get things done and do business and so we all need to take on this idea of learning and unlearning in order to start to thrive in a decentralized economy thank you so much hope you [Applause] thank you so much would you like to proceed and we can open up to the audience fascinating talk has anyone got any questions that though I'd like to start with a gentleman over there and if you just head to the mic it's just down there good morning thank you very much Bettina for fascinating talk and being familiar with with not in your level with the blockchain my question is regarding regulation in cities right now we see cities sitting on a fence avoiding handling this this fascinating option of deploying blockchain because of fear fraud regulation etc how do you foresee cities adopting blockchain technologies for data repositories for transactions for trade etc that's a very good question I would say primarily I've always been asked about nation-states doing this and and I think for good reason because it's something that we have a lot of federal laws around that people do want to start to imagine okay you know how does the currency side of blockchains like Bitcoin fit into existing financial regulations or how does the other parts of the technology the more decentralized database architecture how might that be scoped in a different set of regulatory bodies so we're starting to see a lot of back-and-forth from different regulate regulatory bodies in different nations approach it very differently I have not done a lot of research on how cities are approaching this but I think there's actually a lot of opportunity to start to imagine it in how you're doing any kind of planning around open platforms and how data is going to be used and managed in the future in particular because there are tools within blockchain already to actually deal with confidential information and so we're not just talking about oh these are totally open structures that you know that we'll share every little bit of information that's put on them we're starting to see evolutions where we can actually scope and protect different data structures that are using a blockchain to communicate more more freely so I think there's a great opportunity cities to start to experiment I don't I mean I don't think that's where the regulatory lens will come we'll see that from much more the state structure or the nation state structure but it's a great place to start experimenting there are definitely ways to experiment safely and I would recommend doing that thank you I'm gonna go to you a question from the app it says will block change chain will block chain change the monopolistic role the state has in certain areas like security citizenship and territory I think blockchain is a tool that's going to allow us to reimagine a lot of those structures I think it's going to be important to see how governments do engage with block chains in certain parts of the world because they will inevitably face certain regulations but we're seeing already lots of experiments in voting and using it as voting architecture to do that more safely we're seeing it used for everything from you know energy management to you know remittances there's there's a lot of different spaces where we're already starting to see block chains emerge and sort of challenge traditional architecture so I don't I wouldn't rule it out I think if anything it opens the door for us to be much more much more experimental in areas that we used to think of as either you know solved or or never to be solved things like internet voting that's never going to work so I think it actually opens up a lot of opportunity for change and change that we may not have imagined that block chains can do any other questions from the floor yes this gentleman hey can you sorry our mics are fixed if you could just head out and turn to the right thanks for a very much for a lovely talk actually very interesting made me think about the stability of the system by definition a system that that can change very quickly has a chance to or is susceptible to oscillations so with us being able to make quick changes which is by technical rules so algorithms and so on is the system that we're actually running and of course includes the city then susceptible to oscillations I would say before we implement change quickly we're going to be simulating change and that's that's a really big step forward we haven't had a lot of tools to be able to do system-wide simulation and I think that will be the first step I would I would be I wouldn't try to imagine that we're just going to change everything you know on a dime you know pressing a button or changing an algorithm I think we're much more likely to just be able to simulate and then take advantage of that knowledge to make changes that we do need to make over time and I would you know I would caution at the very least that there's a lot of conversations around the ethics around algorithms and how they're designed I mean there's a lot of human input to those systems we're not talking about perfect machines that exists you know in a vacuum so we do need to have caution around how we experiment and doing so safely and ethically and then making sure that we can actually simulate those kinds of changes before we implement them so I think we're we're headed towards a lot of capability on that front and that's what's exciting but it's up to cities and governments and innovators to start to experiment in that space in a way that pushes the boundaries in a really positive way thank you going back to the app what are the social implications of clock blockchain is it going to change not just the economy buts as a whole I think if we change the economy we do change society I mean that's my personal belief but we focus at animal ventures primarily on business-to-business structures right now I do think that we'll see a lot of main adoption in blockchain technology come from enterprises before or even governments before we see it really proliferating at the consumer level and and that's that's a good thing it means we move towards standards it means we move towards safe experimentation at scale so I do think it's important and hopefully we'll see what kinds of early experiments actually succeed one of the issues with the blockchain space today is there's a lot of hype there's a lot of vaporware there's a lot of conversations that sound like there's real movement but there may not be on the back end and so I love looking at the different kinds of experiments people are attempting that maybe are more consumer oriented but I actually do believe most of this is going to take a certain amount of just concerted effort from cooperating between the technology teams developing these protocols at the infrastructure layer and that sort of protocol layer with corporations and governments to be able to sort of actually standardize and scale some of those aspects before we get to more direct consumer or sort of societal change thank you any further oh you're ready to go thank you no problem thank you David Ebert's from Oracle and Betina personal thank you that was one of the clearest explanations of blockchain that I've ever heard so thank you so with all these new paradigms there's always a certain amount of skepticism but with blockchain everyone seems to see it as a complete no-brainer and I'm not hearing too many issues or threats or anything like that just wanted to hear your your perspective on that is there anything that we should be seriously worried about thank you quantum computing no I mean I as with any new technology there really are things we just don't know yet it's it's very nascent I think it's it's overly optimistic to sell it as the solution to everything and we need to be careful about that some of the issues today are around scalability you know confidentiality actually architecting these things in a way that you can put different types of data on them or share them differently so we're we're going to see some of those they're already working on a lot of those types of problems the issues of scalability the traditional things you see as questions when a new technology emerges you know isn't going to be able to handle the volume of trade is it going to be able to do all of these things we want those I think we'll actually get solved they do need some time and then and then quantum computing people will argue different in different directions but that's a more societal issue that's that's about the way our internet exists today as well we really do need to be thinking about encryption differently in the long term in order to protect against against quantum issues basically so that would be one that I would look at for the slightly longer term but I think there are issues in blockchain we're just starting to see people approach them systematically from all the fields involve cryptography mathematics distributed systems architecture we need a lot more people in those fields to hope that answers your question thank you a final question from the flow yes please make way done thank you hello in the same direction because we already had many expectations and even utopias about the in doesn't transition that the new technologies had brought in our societies and we observed with the internet with the web dot 2.0 and so forth and we observed at the same time emerging huge new forms of concentration of power value and so forth so in the same direction even Bitcoin already showed that there are new forms of concentration of power in the markets for example in the control of the transactions and so forth so I wonder if we shouldn't be aware that we have not to just focus on the centralized Xing effects and look since the beginning before diffusing this expectation and this framework which is just focused on the distributed effects to understand how at the same time it seems intrinsically the new technologies in the contemporary context produce at the same time new forms of concentration of power I think you're you're spot-on I do hope people will look at either what happens to areas that were formerly centralized or where new centralized ations can occur I mean your example in the Bitcoin space you can centralize computing power to some degree and through some of the mining efforts you can also centralize based on people aggregating their wallets on an exchange you know and those those central points will always be attack worthy because you know they're easier to attack so I I don't argue that we're gonna get rid of all centralization or centralized authorities but I do think those are those are areas that we're seeing again and again posed pretty significant threats and we don't have particularly resilient structures to deal with how we manage global activity without those central lysed architectures so I think it's it's a bit of both we need to look at what's going to resent relies how it might resent relies and sort of imagine that forward but there's still a status quo that is relatively easily threatened and so I think it's worth already pursuing ways that we do in fact decentralize a lot of our existing systems thank you I'm afraid that's all we have time for on the question front but a massive round of applause Bettina Warburg camera thank you [Applause]

Channel: Smart City Expo World Congress

Views: 60,295

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Id: QCRIcrja-Zs

Length: 33min 7sec (1987 seconds)

Published: Tue Nov 28 2017