S1E1: 10 Things I've Learned About Blockchain

The first ever episode of Blockchain Won't Save the World, which covers why I believe Blockchain has a marketing problem and how I plan to set the record straight. I’ll walk through my Top 10 learnings and observations from 5 years working in Blockchain and share the topics that you, the community, most want me to cover in future episodes. Including:

- Myth busting
- How to ‘sell’ Blockchain
- Blockchain architecture
- Scaling platforms
- Forming ecosystems
- Blockchain commercial models
- Digital & self-sovereign identity
- Supply chain management
- Central Bank Digital Currencies (CBDC)
- Climate action & social impact
- Stablecoins
- Open source & ecosystem governance
- Government & public initiatives
- Blockchain legal matters
- Regulation

Links to those mentioned in the Podcast:

Peter Diamandis: https://www.linkedin.com/in/peterdiamandis/

Singularity University: https://su.org/

Rutger van Zuidam: https://www.linkedin.com/in/rutgervz/

Odyssey Hackathon: https://www.odyssey.org/

Transcript (Courtesy of Sonix - Apologies for any errors from the AI):

Welcome to Blockchain Won't Save the World, the podcast that aims to demystify blockchain and exponential technologies with real-world examples for beginners and experts alike. Because blockchain won't save the world, we will.

Hello, everyone, and welcome to the first ever episode of Blockchain Won't Save the World. This is Season 1, Episode 1. And today, it's just me. This is the 'Set Up' episode where I want to take you guys through the reasons why I want to start this podcast. Talk a little bit about the content that I'd like to put out, some of the themes that you, the community, have asked me to cover on this particular show and also go through some of my key learnings or some of the experience that I've gathered from five years or so working in and around blockchain. So let's get straight into it. Why am I starting this podcast? Why blockchain won't save the world as I see it. And I've been working in the space for about five years now. Blockchain has a marketing problem. For the last four or five years, we've had enterprise and government engagement in using decentralized technology, distributed ledgers, blockchains, and even so, you still see people making false promises. You see lots of 'blockchain will do this'. 'Blockchain may transform that'. And on the other hand, you're seeing also the typical trough of disillusionment conversation saying blockchain is overhyped. It doesn't have its own killer app. It's never going to scale. It's never going to succeed. And the reality is, it's somewhere in the middle. We've seen lots of great value creating opportunities where blockchain is one of many technologies has delivered value to the participants involved. We've seen lots of examples where blockchain makes no sense whatsoever.

And so over the course of the next few episodes, what I'd really like to do is to go a level down on some of the practical, real world experiences from people who are using blockchain in production today, people from across sectors, people from across different walks of life, from startups to governments to large organizations, technology companies, all of the above. You know, in twenty nineteen we saw about $3 billion spent on implementing blockchain technology and varying different estimates around that. And that's across all sectors worldwide. Now, that's not quite to the scale of artificial intelligence, which I think maybe, you know, 10, 20 times that or cloud or e-commerce, which may be a hundred times or 200 times that, but it's still a significant amount of spend on what is still a relatively early technology. And so what I really want to do is try to dispel some of the myths, create some really tangible examples, and help those who are interested in working with Blockchain and DLT to get some relatable examples that they can help take back to their companies, to their organizations, and really do good work, use the technology where it fits and where it should be applied, and try and stay away from some of the pitfalls or some of the traps where it doesn't. So a little bit about me before we start. I'm a digital strategist by trade. I've spent most of my career helping clients to make difficult choices around investments, whether that be with technology, whether that be about market entry, whether that be related to customer led growth or consumer led growth.

But in the last five years, my focus has been primarily blockchain and why I think my interest is piqued. There is from a strategy perspective. There are lots of difficult choices to make in terms of where you play, in terms of who are the participants you work with, in terms of the types of domains and types of use cases, types of technology applications that you can build together with a blockchain or a decentralized platform. And intellectually, that's a really fascinating domain, but it is very complex. You've got the technology design itself, the architecture, the implementation, you've got the governance model. You know how the organizations come together, how do you form a consortium of peers or competitors? And from a business perspective, and one of the most critical domains is what's the business case behind having 10 companies come together to invest in what is essentially a global startup as a place to work, as a place to ply your trade? I don't think it gets much more interesting than that in 2020. So that's why I do what I do. So as I said, I'm really excited to bring some of my friends, colleagues, people that I've met over the course of working in this industry together to share their ideas with you. So over the course of the next few episodes, I'm going to be dropping hopefully on a weekly basis, a new and different perspective based on some of the areas that you guys wanted to see and to get specifically into that.

Before I launched the podcast, I asked people on LinkedIn, people who know me, what are the topics, what are the domains that you really want to learn more about in blockchain? I've spent most of my time working in private sector, but not exclusively. Most of the time in private permission networks, but not exclusively. I've seen a lot in five years and there's a lot to cover in the space that we call 'blockchain'. So what were the things that were particularly interesting to you? So I'll run down the list in no particular order, but these are the ones that I'm going to try and cover over the course of the next few episodes. First thing mentioned, myth busting. One that people wanted to hear more about what some of the the common myths or common misconceptions in and around blockchain. And I think linked to that, another one was around how to talk about blockchain or rather how to help explain why blockchain is useful to people who may not have as much context or as much experience as we do. And I think that's something that I feel uniquely positioned to help with. And I've tried it many times in many different ways, using many different analogies. So lots to cover there. And we'll try and do some of that today on this episode.

Blockchain architecture, helping people understand what are the components of building a blockchain network. What are the various different integration challenges? What are the various different platform choices? Hopefully going to get somebody more technically experienced than I, an architect or two to go a level deeper on that one. Scaling and growing ecosystems, something that I've had people come to me again and again saying we've got a great proof of concept. How do we get this into production? How do we get this to scale? How do we get other participants on board? I think that's a really important area. And particularly with decentralised networks, the network is everything, the scale is everything. And a lot of the assumptions around whether the initiative pays back, whether the investment works, comes down to the size and scale of your network. So again, a really important one there. Blockchain commercial models, distributed identity and self sovereign identity, really, really good examples of that in the space. Lots of thinking going on, but maybe not so much in production as yet. So lots of people touting the potential of self sovereign identity, claiming back our own data, data that should be ours, taking some of the power away from the data platforms out there. Really excited to see what we can do in that in that space. Supply chain use cases. Obviously a hotspot for where blockchain and DLT is being used today.

Central bank digital currencies. Another really interesting and really important one and potentially a critical enabler for some of the tokenized or machine to machine or IOT based ecosystems. We see out there a lot of consideration of stable coins, but maybe central bank digital currencies could be a lead in or an alternative to stable coins as we look at them. So another really interesting one there. A personally very important topic to me, climate and social impact. Seeing where the types of capabilities that blockchain can provide could elevate or accelerate some of the climate projects that we see out there. Some of the social impact projects. And I've got some great people lined up for you, so don't worry.

Open source and ecosystem governance: would really love to talk to some of the larger platforms out there that are managing open source communities. A very large part of how blockchain technology has evolved, how every every major technology is evolving today is closed, closed governance. Closed software is becoming more of a risk, is becoming more of a challenge for some of our clients where they're very concerned about tech and technical lock-in or vendor lock-in. So open source, really, really important area. Government and public sector initiatives too. So going to try and see if we can get some people working in the public sector, people working in government, talking about some of the work that they've done. Some of the challenges of working and trying to engage government stakeholders around emerging technology, whether that be blockchain or artificial intelligence or any of those ideas. Regardless, public sector has a significant impact on the way citizens receive services, the way we live our lives, the way we're taxed, the way our society works in general, and really interested to see where blockchain is on some government and regulatory agendas.

Legal matters. Another personal topic that I really enjoy talking about. One of the things I say often is we need more lawyers in blockchain and a lot of what we do in the world is we're breaking stuff. We're testing the boundaries of regulation and law. And so getting perspectives from from a legal standpoint, from a regulatory standpoint is going to be really important, too. Finally, lots and lots of requests for industry specific examples, whether that be supply chain, automotive, life sciences, banking. We've had lots and lots of comments from different people saying, could you tell me more about blockchain in industry X? So going to do my best to try and cover lots and lots of different industry sectors as well, to give a broad range of those real world examples that we're trying to cover.

In summary, a lot of different topics, a lot of different areas. A lot of different viewpoints into digital transformation and blockchain in the way that we see it today. And I'm going to try as best as I can to bring Real-World stories, no hype, no B.S., just stories told objectively from people who are doing real work in this space.

So before we go further, what I wanted to do is set some context around thinking around blockchain and where blockchain makes sense to be applied or where you go looking for transformation in this way, because I think that's an important foundational learnings that I've taken from from my work, from my studies that I think are important for people to have regardless of the setting that they work in, but also particularly in blockchain. What we're not trying to do is use technology for technology's sake. Blockchain gives us a number of digital capabilities that I think are particularly relevant and interesting in some cases because you get them all working together. It saves from technical efficiency standpoint, but also it unlocks certain activities that we wouldn't otherwise be able to do. Let me break that down. Oftentimes, the way that I look at it from a private sector perspective or from a private permission perspective is what we're trying to achieve is digital transformation through business networks or through consortia. So multiple parties working together to share information, connect systems to automate activity, reduce risk and generally improve the way that we do things today. That's the ultimate goal. Not trying to overcomplicate it. Not trying to use a too technical term. But what we're trying to do is solve problems together that we couldn't do previously in isolation, by working together or connecting together. We're going to be able to have a better, stronger, more efficient, less risky, higher quality network than we had before.

So that's what it comes down to. And if that's the basic premise, how do we deal with digital transformation at a network level or at an industry level or at a country wide level? Why I think blockchain is different is this is a technology for collaboration, for integration, for transparency, for automation. We're transforming the way things are done, how processes are delivered, how information is shared by creating a platform that multiple parties can connect to. Whether that be private permissioned or whether that be an open platform that anybody can connect to. For years, we've had organizations improving their own technology, investing in technology, looking at front-end experience, apps, user experience, user interface, use of data analytics, new channels like IOT or Alexa or whatever it might be, and saying we're going to optimize the best that we can of our business at this point in time. Why I think blockchain is interesting is that we can then combine multiple organizations together to say if I had all of the banks or if I had all of the automotive companies or if I had all of the logistics providers in a particular country working together, what more could I achieve? And so you can think bigger. You can say, actually, we've got multiple stages or sequential processes or point to point connections between different companies today. That's causing us bureaucracy, that's causing manual errors, that's causing us to have a terrible customer experience. And if we were able to join the dots or if we were able to connect technically in a way that was secure, that didn't put anyone's competitive advantage at risk, we could do things differently. We could do things better. We could re-imagine how an industry works, or we could create entirely new platforms or new marketplaces because we've got a much greater scale because these parties are prepared to work together.

So that opens up a very, very broad box for us in terms of where we can look for creating platforms or creating networks. Notice I didn't use the word blockchain there because it might be that actually once you completed your exploration, you find that blockchain technology isn't needed. It might be entirely appropriate to create a centralized entity where you can you can build a platform or you can operate in the same way that Uber or Air BnD or eBay do. But at least you can start looking in the right place. So we know that what we're looking for is digital transformation. We're looking to use technology to change the way we do things. And I wanted to share with you a couple of learnings that I've taken from two people, one who I've met, one who as yet I haven't around how to think about disruption and transformation, because not everybody goes through the school of training.

And I think it's really useful to start with Peter Diamandis, his definition of where disruption comes from for those who don't know. Peter Diamandis, he was one of the founders of Singularity University, a prominent speaker on abundance, on the impact of exponential technologies and somebody that I think is well worth following. So if nothing else from this episode, please go follow Peter Diamandis. Go check out Singularity University and some of the content that they put out. What I took from him specifically is he saw there are a number of phases around digital transformation or digital disruption in an industry or in a sector. And these are worth noting because I think they apply particularly well to blockchain. First things first is standardization. This is why we see a number of different initiatives of standards, bodies or industry bodies spinning up in and around blockchain initiatives, because actually if we can't agree on a standard unit of measure or a standard definition of a token or a standard agreement on a process or a legal contract, it's going to be quite difficult to get to the next step. So the first step is standardization is that we can agree on the items, the entities that exist within our network or the process that we're trying to follow.

Second step fairly logically is digitization. We're able to put that information into a digital record or put it online or share it on the Internet or network of nodes as we have on a blockchain. From there, we then see demonetization reduction in the cost of doing business or reduction the cost of things happening. The original example of this would have been with digital photography at the cost of taking a photo. The marginal cost of taking more photos and then the cost of doing something with that made digital photography a revolution. It changed the economic model for photo printing very significantly and gave rise to the proliferation of amateur photography and creation of image content as we know it today, and also had a significant contribution into the cloud storage market, no doubt, but the demonetization of that industry allowed for that transformation.

And then from demonetization you have democratization, which basically puts the activities of that particular industry into the hands of anybody. Again with digital photography, the cost of taking photos is now next to zero. All you have to do is buy the equipment. The cost of participating in the token economy, of launching a token based business is now particularly low because all you need to do is to create your protocol, to create your token and launch your website. Write a white paper if you choose to. We can try and democratize and monetize activity. We can take away some of the natural or unnatural monopolies that we see in the world. We can take away some of the complexity we can allow for innovation the more people that can participate. If you look at fintech or startup banks, the more participants that can enter the sector, the more likely we can get innovation and challenge the incumbents. So the more that we can democratize and do monetize and digitize and standardize, the more we have a chance for digital transformation, the more we can work towards an improvement and what it is that we do today. Now, granted all of this theoretical, but that cadence of how disruption happens is critically important in my view, because if you can't get to the first step, which is standardization, an agreement between multiple parties and what we're trying to do, you're going to struggle with doing the following steps and open up and scale and network.

So that was the first thing I thought was particularly important to cover. A few months ago, I had the pleasure of meeting a gentleman, got Rutger van Zuidam. He's the founder of the Odyssey Hackathon in the Netherlands. And he showed a brilliant slide to me, which unfortunately I never got the copy of. But the premise of what he was saying was, is there a number of new business theories that we need to be aware of, new concepts that are critical to helping us be successful in a digital era.

And those were not the traditional laws of competitive advantage. Those were not the traditional things that we taught in business school. These are actually relatively new domains. So thinking about Network Effect, Tokenomics, Game Theory, Moore's Law and exponential thinking, these are the theories or these are the domains that anybody working in our space should be deeply familiar with. Because as we will say over and over again on the show, it's not about building a technical proof of concept. It's about having a real world impact. And so if you cannot scale a network, if you can't make it commercially viable as well as technically viable, it's going to struggle, it's going to scale or it's going to need an unlimited pot of investment to be able to sustain. So thinking about the incentive structures, the network structures, how to bring multiple parties together, how to prevent malicious actors in a network. All of these things become critically important as you're looking to create platforms. Blockchain or otherwise. And so two things that I wanted to set out at the very beginning and that I'll probably refer back to over the course of the coming episodes.

What I'm gonna do next is I'm going to go through my top 10 key learnings, key observations, things that I think about as I work in blockchain on a daily basis. Some of the most common things that I get asked or that people come to me to talk about because I want to shortcut some of those questions and get straight to the good stuff.

So what I'll do is I'm going to run down from number one to number 10. Some of the things that I think are most important or most talked about in blockchain today. At number one and starting off with an easy one. This is my favorite list of blockchain idioms or phrases that people come to me with that either are received wisdom or people believe are truisms about the community that we work in that I actually think we need to challenge and push back on. And the first one that I love is 'blockchain is a technology looking for a problem'. And while I sympathize with the sentiment and that a lot of technology gets built and then ultimately thrown away, this is one that cuts me quite deep every time I hear it. Because first things first, blockchain isn't looking for anything. It's not going to save the world and it doesn't have a purpose or an intent. It is a series of capabilities of ones and zeros of protocols that we can use. However we want. Now, you could say that blockchain people are looking to use the technology to solve a problem. Absolutely. And there's plenty of examples over the last few years where people have invested, where blockchain doesn't make sense to be used. But maybe that was a test. Maybe that was part of the exploration in the learning process itself. I've seen firsthand with my clients and I've seen a number of colleagues and people in the community create networks, create open platforms where they are generating a real impact. They are saving money. They are opening up trade. They are solving real world customer problems, preventing fraud and enabling a more seamless digital experience for customers. Lots and lots of outcomes that, regardless of whether it is blockchain or not or outcomes in isolation that are worth pursuing. And so where I hear blockchain is a technology looking for a problem, I feel there's an intellectual shortcut that it's very easy to say. But in reality, it's something that's often said by those who don't or haven't done the legwork to validate whether that was actually the case. And we have a bit of a responsibility of those working in the sector to surface those cases more often. And I'm hoping to do more of that over the coming weeks and months.

The second one is 'a sledgehammer to crack a nut'. It's that blockchain essentially has more capability or is more complex a solution that needs to be for a particular use case where otherwise you could use robotic process automation or you could use a workflow. And in that case, it could be considered more technology than is needed for a particular challenge. And in that case, you've got to go back to how a solution was architected if actually it isn't the most effective technology to use or a problem could be solved with a lighter weight technology or something less complex. Do that. Absolutely do that. And I think a lot of this comes down to the objectivity of the architects or the leaders involved in spinning up these platforms is saying if we want to explore and we want to learn and we want to build capability in our teams in doing this work, fantastic. Let's go for that. If you actually want to do an objective technology analysis of what is the appropriate solution to use for this particular problem or for building a particular application, then oftentimes the natural conclusion won't be blockchain. But sometimes it will. And I think in some of the engagements that I have with clients, the assumption is not 'we will use blockchain because we have it', it's saying we will identify the problem first. We'll be clear about the requirements will be objective around the commercial case or the value that's been created. And then we'll assess whether a platform of this nature makes sense. The run costs or the operating costs of a distributed network are not insignificant. So first things first, we've got to have an objective case for why. And that's not a blanket case that you can apply across all of the work that we do in blockchain.

I hear also oftentimes that blockchain is 'missing its killer app'. And again, I feel that that one's slightly misguided because what's in a killer app? A killer application, a single use case that gets repeated over and over again until it becomes something that's that's the de facto use of the technology. OK. I think we're still early on that one, but at the same time you can see where does decentralization make sense? Let's take blockchain out of this. Let's take the technology definition and say, actually, why does it make sense to decentralize? What does it make sense to share data or work together or create an efficiency in how information is shared or how automation is achieved across industries? You can look at banking. You can look at reinsurance. You can look at supply chain or manufacturing. You can look at social impact. You can look at regulatory reporting. All of these where oftentimes data exists in silos or information isn't shared in a timely manner. Any of those sectors can benefit well from some decentralization, but may not have got there yet. And while I think the killer app is probably just a reference to the degree of maturity of a technology or the degree to which it has successfully been implemented in three to four to five years of blockchain being on the scene, I think you're seeing lots of implementations, but maybe not enough of the scale across multiple geographies and multiple industries for people to feel comfortable that it ticks the 'killer app' box. But I think we're on the journey onto number two.

This is one of the questions that came from you guys at the beginning of the show, it's how do you talk about blockchain to the non-expert? And hopefully some of that's what I'm doing on today's show. But a few principles that I'd like to share because I hope that it's going to make things easier in many of the early videos or conference presentations or examples that that I saw around blockchain, that oftentimes confused me, was we started with an explanation of how the technology worked. We talked about nodes, we talked about consensus mechanisms. We talked about Byzantine fault tolerance. We talked about immutability. We talked about trust, slightly opaque terms or certainly not specific terms that may not have helped the non-expert audience understand. And I think one of the key principles when you're talking about any technology with with a non-expert audience is go in with empathy, understand the knowledge base that they have. Understand the sector that they work and understand the industry that they work in. Understand the role that they have in the company. Are they financially literate? Are they technically literate? Can you use analogies or examples of previous technology applications or can you give an example from a different industry, a case study, something that brings the example to life? Talking about how a car works by going through a Hayne's manual or going through the instruction manual is not necessarily the best way to get people excited about what to do with it any more than trying to explain why you would enjoy a game of football or cricket or rugby by explaining the bylaws and the detailed offside rules or whatever it might be in the game is no way to get someone passionate about it.

You show someone playing the game or you throw them a ball and you say kick that over there and see what happens. I think we can certainly show more empathy to our audience. And the first things first is don't make the assumption that blockchain has a purpose or that deserves to be used in any way, any more than anything else. I oftentimes try not to use the word blockchain in some of the early conversations I have with clients because oftentimes I find it polarizing. You've had lots and lots of technical difficult to understand presentations made lots of promises that weren't fulfilled in the early days of when blockchain was being talked about. And that baggage comes with us regardless of what we do. Every newspaper article you ever read will reference blockchain: the technology behind Bitcoin, which creates its own polarizing factor or immediately lands you in the space of talking about payments or money, which is not the only application for our technology.

So the key thing that I've learned about talking about blockchain try not to start with the word blockchain, tried to talk about networks or platforms, bringing multiple parties together, trying to work together to solve a common problem or goal. If you can start there, then actually you can go down the road of creating the business opportunity first or being able to describe the problem clearly and concisely. And then you can sell for what technology to use. Chances are it's likely to be a blockchain case, but it might not be at the same time. So you leave yourself open to be objective from what technology to use. But you're applying a lens of saying I'm going to help you identify the opportunities or the strategies for how to create a platform.

Number three, how to get beyond proof of concept. So really, really important question and something that I get asked about a lot in 2020, I'm pretty sure we've proved all of the concepts around blockchain. We can hash this, we can decentralize that, we can run notes here and there. We can get behind firewalls, we can share data privately, we can do zero knowledge proofs, all of the technical domains around which industry can work in what type of data we can use, whether we can link it to IOT, whether we can use analytics on top, whether we can get the automation and smart contracts to work, whether it can be legal, et cetera, et cetera, in some way or another.

I think we've proved all of these concepts that these capabilities exist, that it is technically feasible to deliver. And so what I'd love to see going forward is saying, let's believe that it can be done, but let's focus on a commercially viable implementation of what this is. So everybody can imagine a use case of saying, oh, wouldn't it be great if we apply blockchain to this, that or the other, or couldn't we blockchain? YouTube or couldn't we blockchain my rent money or couldn't we blockchain? Et cetera, et cetera? And a really important consideration in all of these cases is what's the incumbents experience or what's the current party or the current parties providing that service today? Let's take my my rent, for example. Do I need a digital token to allow me to pay for my rent on my mortgage? My reference example is a direct debit from my bank account, and that's a pretty seamless experience. I'm not sure if I need to get into public and private keys. I'm not sure if I need to get into an entirely new currency just for that one specific application or that one specific domain. So think very carefully about the incumbent experience and are we going to be creating something that is at a bare minimum, better? The second part of it then is the cost.

You know, the operational elements of this. What is the business case for doing so? If there's a significant amount of inefficiency in a particular model, there's a significant amount of fraud, significant amount of manual process errors, delays, the business case can be built up and in lots and lots of different components. And it's going to be different every time. But unless you have an objective understanding of how does this piece of technology improve what we currently do or allow us to do something different that we didn't have before. If we can't quantify that, we're going to struggle to put an investment case together. And in most cases in the private sector and public sector, that's gonna be a requirement. Likely we're going to be spending in the multiple millions of dollars, euros, pounds to be able to implement something at scale. So if we're doing that, we need to be creating at least as much value, if not more. And the second thing I'd say about going beyond the proof of concept is where possible, try to imagine multiple applications that could work on a particular network. Now, if you're going to bring multiple parties together, let's not just think about that single application traceability of a products ability to identify somebody, whatever, whatever those use cases might be.

If you can say, OK, having an entire supply chain together, we can look at identity, we can look at finance, we can look at traceability, we can look at fraud, we can see multiple use cases all working together or multiple applications that these parties can benefit from. You're on to a great story there. And again, that's going to be different depending on which industry you look at in life sciences. You might be looking at traceability, recalls, customized drugs or sex sharing, sensitive personal data. If you're looking at automotive, it might be around vehicle payments. It might be around payments of tolls. It might be around the history of the vehicle or its parts. In most of those cases, you're using some of the similar ecosystem to deliver those or data from similar parties in that ecosystem. So think about trying to find multiple applications which can sit on that platform, not building one blockchain for one application.

Number four: how do we structure a business case for blockchain? Now I could do an entire podcast just around the different line items of a business case, but I'll try and keep it relatively simple to start with because first things first. I think it depends on what you're trying to do, the different types of platform, whether you're trying to focus on being a dedicated business that can be for profit, that can identify new ways of delivering value, or whether you're looking at creating a market utility, potentially a not for profit where everyone benefits from using that technology, but it's not designed to be for profit entity in itself.

So first things first, you've got to think about what's the cost of getting us into production? You can go through the step of proof of concept into pilot, into production, but at a bare minimum, there's going to be incremental cost as you go live from connecting and integrating with existing systems from the infrastructure itself. The blockchain, the cloud, the nodes, any software applications that need to be managed on top of that. That's going to need to be built and maintained. And on top of that, who is going to maintain it? Would you need to create a separate legal entity to be able to manage that particular task? Oftentimes, you know, at least from a legal perspective, if a utility has been created, somebody wants to know who's liable for for data, for risk, for bad things happening. Do we need to create a separate legal entity? So we're gonna need some lawyers that could be at least up to a year of effort of just getting the legal and contracting work done and completed. So that goes into the cost bucket up front as well. And then once you're in operations, are we just gonna leave it up and keep it in its in its existence? You're still going to need to upgrade software. You're still gonna need updates for operating systems at a base level. There's gonna be operation and run costs for that particular platform that you need to consider. That's your cost side.

On the value side is saying, how does this help me relative to what I have today? You know, how is this saving me money year on, year on year, or how is this reducing a risk for me? It might actually be that by having this platform in place, you dramatically reduce the risk of a business going bust, fraud events happening, money being stolen, consumers data being put at risk, which is essentially spend in fear of a greater cost down the line. So are you looking at efficiencies or are you looking at risk if you're in the for profit box, you're saying actually. What's the commercial model for this once it goes live? So to offset all of those costs, are there going to be subscription fees? Are they going to be transaction fees? How many participants am I forecasting to be on my network? How much am I going to charge them? Am I going to have future applications or future things that I can that I can build on top of this platform that can generate me further revenue software products, individual licenses to access data, new products that don't exist today that I might be able to charge for because I'm able to convene a network or be able to collect data that I didn't have before.

How do I value those? How do I how do I cost the development time to build those new software products? And then how much is it gonna generate me in terms of revenue? This is oftentimes uncertain and you've got to build off an awful lot of assumptions if you're working in particularly new spaces. But all of these things need to be considered into the model. Again, I wanted to keep it quite simple. They're happy to double click on it in a future episode if need be. But there's a very important difference between the market utility versus that for profit entity, which I think is worth calling out.

Number five and one that I definitely had to check myself on a fairly regular basis is what I mean by 'ecosystem'. And I realized even that, as I say, it now is a relatively opaque term. So let me qualify a little bit. And when we start looking at building blockchain platforms or starting up business networks, we use the term 'MVE' or minimum viable ecosystem, which ultimately just means what is the minimum number of participants, entities, companies, parties that I need or that we need together to bring onto the platform to make it function and deliver the value that we intended to do a lot in that.

But first things first. There's two main types of ecosystem. One would be a vertical, which is oftentimes related to a supply chain. End to end. So from a manufacturer right down to the customer, including its first tier, second tier suppliers, logistics companies, companies that provide a services for that individual company. These networks are often easier to convene because you can have a large dominant player at the top of the chain who can mandate standards, who can mandate technology implementation. Think of a Wal-Mart or think of a government or think of an Airbus, a Boeing, whoever it might be. Large organizations in the world who have very, very large supply chains, maybe they may be in an oligopoly position in their particular market and saying they get a significant center of gravity of people wanting to work with them. So being able to establish technology standards and move the market can be quite quick. Verticals oftentimes the fastest networks to spin up.

The second type is a horizontal, which is a network made up of industry peers. You can think of that being a network of competitors. And oftentimes a regulator at the same time is saying that actually we have an industry wide challenge that we need to address. That could be traceability, that could be fraud, that could be sustainability. If we are able to share together information, we are then in a better position together to be able to address some of those problems. Now, in these particular networks, it takes a lot of legwork, a lot of time on the ground. A lot of convening, a lot of discussion and oftentimes a lot of lawyers and also a lot of I.T. security folks. These are some of the hardest networks convene. But we've seen in areas like trade, finance with We.trade where you've got 13 of the largest banks who've formed a joint venture together and a separate legal entity or TradeLens, which is a global shipping network where you've got something like 60 or 70 percent of global sea freight shipping providers all working together to deliver the same platform. It can be done, but the scale of opportunity has to be large. It has to benefit all parties. Maybe not exactly the same across all of those parties. Some might benefit more than others, but at least they're all in it for the same goal. We can all agree that increased growth or addressing a larger market together makes sense. We all agree that reducing the risk of fraud or reducing the risk of money laundering is something that we all deal with and we deal with it in siloed ways today so we can break that down. We can develop platforms and serve software and technology together to be able to address those kinds of things. In these cases, it's a lot of meetings, it's a lot of proposals, it's a lot of revisions. And again, you're working with traditional competitors, organizations that aren't used to working together oftentimes. So these are the ones that take a little bit longer to do, but oftentimes you can get industry wide scale by doing that.

And so it takes longer, but you might get more verticals. You can go faster, but you're still working in an individual supply chain. Not to say that you can't then add others and extend a vertical network into a horizontal network over time. Absolutely possible. But those are the two major considerations around the ecosystem.

Number six and following on directly from the ecosystem point that I made before. Don't underestimate the importance of governance in these particular networks. We already talked about convening a network, having a common enemy, having a common goal. Those organizations can work together. That gets you the first stage that gets you on the table. At some point, then you're going to have to write the business plan and agree a whole bunch of different areas that that need to be governed. We talk about intellectual property around funding. Many of these parties are going to be bringing their resources to the table. And do we value the equity of an early party in the same way as we value the equity of someone who comes later when the platform was more established? Governance around the roadmap. How do we make technology decisions around which gets which application gets built first and next? What happens if we end up with a disagreement around what to build? The profit model, whether we're for profit, not for profit, whether we all agree that we're the same type of model and whether that needs to change, starting to get into concerns around anti-trust data, privacy and so on.

When you've got a horizontal network, you've got a very, very large group of individuals together that from a regulator's perspective, could look like it could be a risk or could look like it could be an antitrust concern for them. So how do we give a certainty to the regulators are how do we give comfort to consumers that this network is being governed appropriately, that it is there for the benefit of the parties and for the consumers and the customers of those particular of those particular networks? So governance, something not to be underestimated. And to me, of equal importance than technology and business case as you go through this. And so being mindful that there is a significant lead time around establishing governance and getting agreements on everybody working together can take as long as the technology, if not longer.

Number seven: What does it take to form a consortium? I've covered some of the previous points here. But ultimately, persistence is something that I think you have to have, particularly if you're looking to convene a network, whether you're one of the participants or whether you're looking to bring multiple participants together. This is not necessarily something that happens overnight. It becomes easier over time as you get more examples, as you see other others, building networks in particular industries or as you see more blockchain platforms going to production. I think drawing analogies and saying I want one of those or I want to join a network like that where I want to establish a network like that can become easier.

But still, it's not going to be as simple as as working in a single organization trying to make technology change in one governance structure. You're likely to be working in multiple. So long story short. Stick with it if you're clear about the value case. If you're convinced that there's something there, keep persisting. Not every stakeholder or not every person you meet is going to be as excited about technology change as you are. There are multiple different people within organizations who are at different levels of the innovative, non innovative willing to disrupt, wanting to keep status quo. It's complex and stakeholder management is a critical skill when you work in blockchain. But over time, if the value case is strong enough and you can be objective in your description, it can happen and it can work.

Number eight: how do I get into blockchain or how do I get into working with blockchain? And I love this question because it's such a multifaceted one that there are so many different ways in which you can work with any kind of technology that is almost almost contextual, almost different with every person you speak with. But here's a few of the main considerations for me is obviously there are different entities working in and around blockchain technology today. You start with the enterprises themselves. Is this something that within your company or within the place that you work, where there are technology teams or innovation teams or I.T. functions where blockchain is already being trialled? Can you get the opportunity to learn from them? Can you get the opportunity to work with them while it's already happening? Technology companies, there are any number of vendors out there who are working and delivering blockchain programs for their clients (my organization being one of them and there are many others). Oftentimes they give talks, speeches, meetups, go to those, check them out, see what the guys are doing. Maybe you might want to work for them. Maybe you want to apply. Maybe that's a career choice that you want to make. But be mindful when you get into those organizations. There's probably two types of career role. One being a developer, one being a business analyst or being a business person. There are very, very different skill sets for those. And I'll talk specifically about my journey as a business person as we go as we go into No.9 and be mindful that just because you're interested in working in a space doesn't mean you're necessarily likely to get there. So it takes some perseverance, it takes some understanding of the organization that you'd like to work for. So as you're making your plan, think about do I have skills that are particularly relevant for this organization today? And if I don't work and I get them from a training perspective, we're very, very lucky that there are no different people out there who are providing blockchain training on an open source, free and paid basis. You've got online training courses, university training courses, plenty. And I can shout out some. But, you know, there are many, many places where you can get trained on the basics of understanding about decentralization around networks, around blockchain architecture. Lots and lots of content out there. So maybe retraining is a part of that narrative. And then looking at startups and what we've seen in the last five years is a proliferation of small blockchain based startups, some of them development houses, some of them propositions in their own rights. Some of them token based businesses, some of them small technology companies, all looking for talent, all growing, all likely to continue growing over the next few years. So even if you don't want to work for a big corporation, think about some of the startup opportunities that are out there. Get to meet some of the people, go to meetups, understand their business model a bit better and see whether they're looking for somebody who has the skills that you have. Also, I think it's important to consider why am I interested in working in blockchain? This may seem like a bit of a trite question, but honestly, I think it's important not just because this is a decision that you will make over the course of your career. What is it that attracts you to working in a space like like this? Like ours? And I said at the beginning of the show, what interests me about blockchain is that this is digital transformation of a very different scale in a more complex manner. And maybe that's your answer.

Maybe it's not. Maybe you've been impressed by a particular piece of technology or a particular initiative that uses blockchain. But be careful to make a career choice. That's right for you. As I move into a space like this. Am I going to be learning transferable skills? Is this gonna be something that I'm going to enjoy in two or three or four years time? Is this a stepping stone to doing something different or is this a great place to start in an organization and then to move on? Be conscious of the reason why you're doing it. And so also, don't be disappointed if you get turned down the first time because there's plenty of other opportunities out there. But as long as it's something that you're clear that you're passionate about, that you can talk to with passion, you're going to keep doing the reading, you're going to do your research. You're gonna be excited to get better and improve the skills that you have over time. And and ultimately, if that passion, that effort pulls through, you're going to find yourself in a role that you're going to love in no time.

And then finally, number 10: what are the skills that you need to work in blockchain? And I'm not going to talk from a developer perspective here because I want this to be a personal story. But from my perspective, as a non-technical person working in blockchain, what are the skills that I have or that I've brought to the party that I look for in my team members? Remember, what we're talking about here is the domain of digital transformation. So there are a number of baseline foundational skills that will help you to look at the commercial model, the industry processes and flows, the particular contextual analysis you need to do to understand. Can I create a network? Can I bring these parties together? And so first things first, strategic thinking, the basics of business models, the basics of industry dynamics and financials. These are things you just have to understand, to understand 'why would it make sense to invest in technology'? What are the choices? Business case analysis. Business case planning would be number two. Number three. I think you have to have a basic appreciation of enterprise architecture, not to a detailed technical level, but being able to understand where does blockchain fit? What does a blockchain platform fit within the existing technology stack of an end of an organization or an industry? What are some of the other applications that those companies would be using that need to integrate? Learning about APIs, learning about how data is orchestrated and moved in a particular industry or a particular company. It's important also learning about the other exponential technologies and traditional technologies that you compare with blockchain. It's important not to be blinkered. If your business is digital transformation, it helps for you to know the alternative options. It helps you to know that it may make a ton of sense to implement a workflow system or a robotic process automation system here instead of spending up a bunch of blockchain nodes. Or actually if we can augment this system with IOT, Internet of Things sensor data, we take away some of the other challenges that we see in terms of data integrity down the road. What can we do with analytics? How might this particular data structure help inform some machine learning or artificial intelligence that can help us optimize this particular system? There's lots to it, and curiosity about technology in general I think is is important and it's helpful to help you remain objective as you do the work that you do.

I'd say another key skill is helping to manage difficult conversations or how to tell stories. You know, a lot of what we do is to convene or convince or to influence others to make decisions based on objective analysis. In those situations, you're going to come up against a lot of bias, historical bias, technology bias, personal bias, political bias. You believe objectively that the solution you're proposing is the right thing to do, but somebody else may have competing objectives. They may have a different agenda. They may be busy. It might not be one of their priorities. So how can you have a productive conversation? How can you reason with somebody who's bringing bias into a conversation and hopefully get them to at least acknowledge your perspective? You don't have an obligation to be listened to. You're just trying to be an influencer. You're trying to objectively share some facts and ideas about what could transform an industry or a particular business for the better. So in those storytelling, how to craft a series of insights, how to craft an argument, how to respond to criticism, how to remain calm, how to keep your focus on the big picture despite adversity, are all important skills.

So a little bit of a whistle stop tour of my experience and my observations around blockchain, but I hope this was a useful start. There's a lot more to come. And the guests that I'm going to have on on the show I think are going to be inspirational and provide some really great stories for you to take away. Please do feel free to comment and reach out to me on LinkedIn. If there are things you like, if you things you've heard today that you really enjoyed. And tell me what you didn't like so I can improve for next time. Thanks again for listening. And I look forward to seeing in the next episode.

Thank you for listening to The Blockchain Won't Save the World Podcast. All opinions here expressed are those of myself and my guests. If you're looking for more, you can follow me on LinkedIn for more blockchain related content. And until next time. Stay safe out there.