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Ep 9: How Deloitte is using smart contracts to accelerate disaster relief
85 Plays1 year ago
Peder Muller and Tim Davis from Deloitte, alongside moderator Justin Gunnell of Sher Tremonte LLP, explore how Deloitte is leveraging blockchain technology in disaster relief. They delve into Deloitte's 'Close as you go' project, a prime example of blockchain's capabilities. Built on an Avalanche subnet, this initiative uses tokens, smart contracts, and decentralized architecture, all seamlessly integrated and invisible to the user. Join us for an insightful look at practical blockchain applications in critical humanitarian efforts.
Find out more in our explainers at owlexplains.com
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Transcript
Introduction to 'Owl Explains Hootenanny'
00:00:06
Speaker
Hello and welcome to this Owl Explains Hootenanny, our podcast series where you can wise up on blockchain and web3 as we talk to the people seeking to build a better internet. Owl Explains is powered by Avalabs, a blockchain software company and participant in the avalanche ecosystem. My name is Silvia Sanchez, project manager of Owl Explains and with that I'll hand it over to today's amazing speakers.
Smart Contracts in Disaster Relief
00:00:34
Speaker
Hello and welcome. This is the smart contract session part two. Faster, cheaper, better. How Deloitte is using smart contracts to accelerate disaster relief. I am joined today by Tim Davis and Peter Muller from Deloitte. Peter is currently a blockchain architect in Deloitte's blockchain and digital assets
00:00:58
Speaker
of practice responsible for designing architecture of blockchain product offerings and leading the Deloitte Advisory Blockchain Studio development efforts. He is the solution architect for Deloitte's Closes You Go asset and his team is currently focused on improving client cyber posture through blockchain powered security tools. Tim Davis leads the blockchain and digital asset practice for the advisory business at Deloitte.
00:01:26
Speaker
His clients have been mostly in the technology and financial service industries, and he serves a range of emerging crypto-native companies through large institutions. Thank you very much for joining me, Tim and Peter. Thank you. Pleasure. Great to be with you, Justin. Thanks. And let's start from square one. So why don't one of you tell me what is close as you go?
00:01:49
Speaker
Well, it closes you go is a tool that we provided clients to manage the eligibility requirements behind grants that trickle down from FEMA to localities. As you can imagine, there's a lot of paperwork and process that goes into that flow. And things get lost in the mix. People lose paperwork. People lose contact. People leave their work. And this has caused problems in the past where some of these grants, these loans, they don't get accomplished for many years. And that's a problem when you have to pay
00:02:19
Speaker
your contractors to remove trees, say, after a hurricane, because these localities aren't sure if FEMA is going to show up later and say, hey, you didn't do your paperwork, right? So we're going to claw back that loan. And if you've paid people, you don't have the money to pay back the clawback. That's a problem.
00:02:36
Speaker
Close You Go is based on a platform that uses blockchain to manage all these eligible requirements for our clients. So they know by following the checklist inside of Close You Go and uploading the proper documents they need to do, that everything is as it should be and they can be confident in using that money as it comes down from FEMA.
00:02:58
Speaker
Great. And so a client then may choose to use clothes as you go to get an advantage in this process by using your system. But alternatively, they might just try to handle this themselves and apply directly to FEMA. Is that how it works?
Blockchain Simplifies Grant Compliance
00:03:17
Speaker
Yeah, indeed. In the past, there was always a problem with, well, we have
00:03:23
Speaker
We have this requirement, that requirement, nothing was very clear, and everything was paper-based. So just imagine file cabinets and file cabinets and stuff that's everywhere. Clothes you go, gets rid of all that madness. And we have an account team with the localities. It's set up. Basically, think of it as a checklist.
00:03:39
Speaker
It says here, according to your local rules and state rules, here's what you have to do. Here are your requirements. If you fill these out, you can be confident that you are in compliance. And furthermore, the system will let, for example, the state know that, hey, this locality has done what they're supposed to do. You need to check this out and review it. And that's all powered by the blockchain in the background. And what type of solutions, if any, existed in the past for making these types of applications?
00:04:09
Speaker
There have been a number put out there. Many of them are built on Salesforce and Oracle put together specifically for what those developers saw in counties. But I don't think they encompass all the rules that we go over and close as you go, that checklist I was talking about. So you have Deloitte's ability to understand.
00:04:30
Speaker
hey, this is what your state has to do, and this is what your state has to do. And so we customized that experience for them. Clothes You Go is the tool that you use to get into that experience. But there's that big difference is Deloitte's understanding of all the requirements and the compliance stuff. That's an important piece of it. So it's more than just software, right? It's making sure that you're in line with the law.
00:04:55
Speaker
And people often like to say that a lot of what can be done with Web 3 can actually be done in more traditional ways using Web 2. So here, why the blockchain? Why a decentralized architecture? The architecture is important because there are a lot of players in this system that aren't quite sure what the other players are doing.
00:05:19
Speaker
That's one thing the blockchain does. So it keeps everyone honest, basically. Did you turn this paperwork in? Yes, we did. Did you review it? Yes, you did. Now I'm talking about two separate entities here, the state and local level, who don't necessarily talk to each other time. And it's not like it's just one-on-one all the time. They have a hundred different localities in the state, right? They need to keep track of. The blockchain helps manage all that, who did what, and it's transparent to everyone in the ecosystem of who did what.
00:05:44
Speaker
That's what's really important. So there's no more argument about did you get that paperwork? No, I didn't. Yes, you did. It's back and forth. Also interesting that we use the blockchain for stuff like login. It's not just what you want to make sure people see. It's also for stuff like what you can and can't do in the system. We use smart contracts to control that kind of authentication and authorization. And I would imagine, you know, especially given
00:06:12
Speaker
how your clients are becoming involved in making these applications, right? There's usually a natural disaster or
Why Deloitte Chooses Avalanche
00:06:19
Speaker
some catastrophic event behind it. It's probably not always the easiest of circumstances to keep and preserve paperwork for a long period of time on their behalf. So for them to scan it, get it up and load it up on your system as quickly and easily as possible, it seems like that would be important to something like this.
00:06:39
Speaker
Yeah, no, it's been a, it's been a real pain in the past for them. Cause you know, they, they used to excel spreadsheets or a word document, you name it to make sure that, Hey, did the last person make sure the things are as they should be? I think so. You know, so it, and it was a mess and they had to have physical paperwork of here's what we turned in and copies and all of you can imagine it. It's just a huge mess. We've digitized all of that and made it much more clear and made a nice workflow that they can follow.
00:07:08
Speaker
And whenever you're talking about insurance products, or in this case, government grants, the question of fraud always lingers. Is that something that you have some experience seeing in this space? And how is that in play? And does the blockchain or do the systems you've created in any way help to combat that concern?
00:07:35
Speaker
Yeah, indeed. One of the biggest concerns is fraud. I can give an example. When they fill a truck with leaves, someone has to say, is that 75% or is it 80% full? And that matters when you're talking about leaves, you know, pounds of leaves and how many dollars per pounds of leaves.
00:07:52
Speaker
When you get into that minutia, there is opportunity for fraud everywhere. Our system keeps track of all of those transactions and keeps a running ledger of hashes of all those transactions that have been digitized to say, this is what was said. Here's where we can prove what was said. So it really brings down that fraud potential. I'm not saying it eliminates it. But when it was just all paperwork, as we all know, it's right for fraud at that point.
00:08:23
Speaker
And so you spoke a little bit about why the blockchain sounds like auditability is a big component of that, security is a big component of that. But aside from why the blockchain, why Avalanche in particular? Tim, you want to speak to our relationship with Avalanche?
00:08:42
Speaker
Yeah, I mean the Y avalanche is the really got to do with the subnet feature that avalanche operates right which really creates for us the benefit of operating in really a private
00:08:56
Speaker
subnet chain, but having all the benefits of the public chain, right, so that we can take advantage of the consensus mechanism and being able to put basically heartbeat hashes to the public chain that give a level of verifiability to the actions on the private chain. So we're getting all of the strength of that permissionless chain consensus mechanism
00:09:20
Speaker
but yet being able to kind of keep the transactions confidential to just those entities that are operating on the chain. So that's one of the biggest reasons in terms of the Y avalanche. I did just want to go back and as we were talking about the Y blockchain,
00:09:38
Speaker
There are, as Peter was saying, other attempts at database-based solutions. We talked about some of the reasons why, but one of the other things that we've done with Clos as you go that I think is important is the usability. Blockchain is complicated for a lot of these local buyers. I don't really understand it. Having a really familiar
00:10:02
Speaker
user interface that they don't have to worry about all the technical plumbing on the background is really important because it just works and it's a familiar user interface. So that piece of the solution I think is really important relative to the willingness of people to adopt it and use it. Yeah, that's a good point. And this is not a theoretical use case, as I understand it. Clients are actually using this
00:10:30
Speaker
today. It's in production now. And how long have you been live? Almost a year now. We're coming out with a new version here very soon. One of the features that Tim mentioned was the heartbeat, and that's because of the new subnets that we're using. That heartbeat is important. I think it's rather
00:10:54
Speaker
It's rather new to the whole world is that we are submitting this heartbeat to the public chain. It's basically an hourly heartbeat that is considered a Merkle root of all of the hashes on the current close as you go status. What's great about that is, you know, it's an audit of the auditors without revealing what our clients have in the system. It is irrefutable. It is a cryptographic hash with a timestamp saying,
00:11:21
Speaker
Here are all the transactions inside of clothes you go. And we submit that to the public chain. So any regulator or anyone who has questions and has that authority and says, hey, I want to see things are as they should be, yes, we can prove that through the public chain. That's fascinating. And that is really something unique to this technology. You can't really do something that equates to that in the more traditional web
00:11:45
Speaker
It's a real powerful feature of it. The problem is your solution needs to be engineered to take advantage of that. And I think we need to see more of that. It sounds like you guys are certainly doing that and will hopefully be an example to others.
Document Tracking with Smart Contracts
00:12:04
Speaker
The title of this series is really geared towards smart contracts, and a lot of Web3 development at its core are, as you know, a series of smart contracts that work together and interact. But if you can get a little bit more technical on that, what are the smart contracts that make up clothes as you go, and what are they doing?
00:12:29
Speaker
Well, obviously, some of them keep track of these documents that I mentioned before. They help the clients realize, here is a list of items that have been hashed. So that's how we keep track of it. Have you done this? Have you done that? That's one way you use smart contracts. The other way we use smart contracts, as I mentioned before, is for security.
00:12:50
Speaker
Well, again, too much detail. They basically decide what you can, can't do in the system. They help us generate our tokens in the backend that decide what your experience looks like, your React experience from the user perspective, I mean, because we don't want
00:13:07
Speaker
you know, we don't want to have a whole bunch of stuff for everyone that looks the same for everyone. It's got to be customized to what they want. They need to see the smart contracts help us do that. Another interesting feature we use is we use them for siloing data. Your smart contract
00:13:22
Speaker
protects others' data by keeping your data separated from them while still in the same system. As such, if your private keys are compromised, well, only your data is compromised because the smart contracts keep the rest of it solid away from your experience and from what's associated with your public key. And I think we've danced around it a little bit, but if you don't mind, can you walk us through
00:13:50
Speaker
When a user comes on and they see the login screen, they log on, what do they do? Walk us through the process. Well, like with any system, they log in and they get to a dashboard effectively that shows
00:14:06
Speaker
How prepared they are for the next disaster and by that I mean how prepared they are with their documentation and what the requirements are It's like to Tim's point. It's made to be very simple. It's not meant for you to be technically savvy. We don't want that There's a basically, you know, you get a green light yellow light or red light saying have you done this? how close are you to being done it gives you the the big picture of a
00:14:32
Speaker
whether or not you can expect human to come down and say, this is not right. And if they do, you can prove that it is right. That's really what they care about. They care about seeing that, have I met the requirements? And that's what it shows them. And it doesn't get into anything else. It doesn't need to get into anything else.
00:14:49
Speaker
So following up on that, that kind of gets back to Tim's point, which was what I'll call abstracting out the blockchain. Really, you have the technology, the blockchain's powering it, but the user doesn't really see that or necessarily interact with that part of it.
00:15:10
Speaker
In your view, is that a good thing for blockchain technology? Is that a bad thing? Is it just case dependent or do you have a view on that? Yeah, I mean I would just I think it's a good thing because it brings all the power of us Having being able to design UIs that you know, we're really getting much better at it
00:15:33
Speaker
The UI can be extended to mobile devices and other form factors. So it gives us all of that power and flexibility while not having to sort of take blockchain and the tech further than it really should. The blockchain tech and the smart contract have a critical role, but it is a role in a larger ecosystem of the overarching experience. And so being able to kind of bridge something that we found is really critical is
00:16:02
Speaker
being able to make sure the user understands the function the system's performing without necessarily needing to understand why. Once they see that it's
00:16:14
Speaker
in it you suddenly can get a you know a lot more willingness to adopt the technology.
Enhancing User Experience with Blockchain
00:16:21
Speaker
One of the biggest impediments to adoption quite frankly is either a poor UI or just an over complicated experience where they're not really sure you know web 3 in so many ways is so different than web 2 and sometimes we're just asking users you know to give them a roar experience again too much of a leap of an understanding of what's happening and what am I doing
00:16:45
Speaker
So, you know, someone might refer to this as Web 2.5, right? Where we're sort of bridging the best of both worlds together. But I see this as being a critical sort of modality of sort of how we continue to bring blockchain technologies into production going forward. It's incredibly important that we don't focus so much on the blockchain, the smart contract, the technology. Your users don't care.
00:17:11
Speaker
The best blockchain solution you can build is one where your users don't realize blockchain is being used. And don't build it just because of blockchain. Build it because the solution, the challenge is appropriate for a blockchain solution. You know, you look on social media everywhere. We're all talking about blockchain, Web3, all the technology. Doesn't mean anything. We're not talking about TCP, IP. We're just using the internet, right? It's the same concept for blockchain. We need to focus on the solutions. Be more pragmatic about it.
00:17:41
Speaker
I think that's a great point. It might be an interesting turning point for the industry when people, as you put it, you're just talking about the thing and not the technology powering the thing. I think that will be an important time when
00:18:01
Speaker
when we adopt things in that manner. I don't think we're quite there yet, but things like this will certainly help that happen. So if I have it right, it's really local governments, municipalities, state governments, government agencies, maybe government contractors.
00:18:18
Speaker
that are really the clients here. So you have some experience with that clientele. Are there any other logical applications for this type of a system that you think could service these same types of municipal government clients that you think would be a logical sort of outgrowth from what you're doing here?
00:18:43
Speaker
Thinking, going back to the point that Close You Go is built on a platform, that platform is, you know, for workflows that might have a lot of paperwork or eligibility requirements associated with them. So it depends, we could change the front end. That's not the issue. But it would apply to many industries. Banking could use it, insurance could use it. The government, of course, can use it. We're showing that.
00:19:07
Speaker
But anything that has a complicated workflow that people feel like, man, I don't know if from doing this right, there's your client. Those are the people who need it. But not something that's easy, but something very complicated. And you can imagine even something like all the talk right now about COVID money not being used properly, stuff like that, that's all requirements. Those are all that have been lost in the minutia of
00:19:32
Speaker
getting that money out. That's where the underlying platform that Close You Go lives on could be used. And you name it anywhere like that, where it's complicated. Tim, if you have any thoughts on that. Yeah. I mean, the number of applications is really huge when we think about all the benefits the government pays and the eligibility requirements go behind that and the level of fraud that exists in that system today. But even as Peter said, in the private context, if
00:20:01
Speaker
claims and how some of the experience with claim adjudication and the level of errors there is quite high. It's of great inefficiency and cost to then have a healthcare provider believe that the claim is eligible and then find out that when it comes to the claim adjudication that it's
00:20:21
Speaker
up getting denied. So being able to bring all of that decisioning to the front end and then having this immutable trail and the accountability of decisions that are made. But being able to also take some of these decisions and automate them to the extent possible, so you're minimizing the amount of human judgment. All of this leads to tremendous efficiency in these systems. Yeah, yeah, yeah.
00:20:47
Speaker
That's all fascinating. I mean, an obvious application that's always talked about in government is voting. I think this is a little, you know, maybe not directly adjacent to voting systems, but
Building Trust with Entities like FEMA
00:20:59
Speaker
certainly something that these clients might be interested in at some point. And also, right, your clients here could almost...
00:21:08
Speaker
almost switch roles because I'm sure a lot of the state governments and local governments are doling out funds for particular purposes on a local level. And they may very well want these systems or similar systems to process things on their end. So it seems like there could be countless clients and applications just staying within this lane.
00:21:30
Speaker
Yeah, indeed, the idea is to have the state and localities and eventually FEMA all playing in the system. Right now we're pretty much focused on the state and localities getting their ducks in order, but it doesn't just help the localities it helps the states too because you can imagine they got a review like I said 100 different localities.
00:21:49
Speaker
They want to get to the point where they feel like, you know what, Close You Go says that their ducks are in line. So their ducks are in line. I don't need to worry about that. Here's the stamp of approval, which has already been done cryptographically. So we can just go ahead and eventually, because FEMA's policy really in the end is they want to get the money to the localities. Of course they do. But they have to make sure things are right. And if they start getting that warm and fuzzy that things are as they are because Close You Go says so, then we get the money out faster and we have less chance for problems.
00:22:20
Speaker
And that's really, they often throw around the term trustless in this space and things of that nature. But really here, you want trust. You want trust from FEMA that when they see clothes as you go behind this, they understand the technology and they understand the systems that are auditing this to a level where they are comfortable. The mere fact that it has gone through that process gives them additional comfort that this stuff can
00:22:48
Speaker
you know, has that stamp of approval and things can, you know, things can get processed. And I'm sure that just, that takes time. That takes, you know, exposure to these systems, some trial and error, getting to know the teams behind it. But it sounds like eventually that's really, you know, might maybe the secret sauce. It is. And they, you know, they're so used to things being broken with all the paper.
00:23:14
Speaker
It's going to take a while. It's not just, here's the clothes you go, everything's fine. It's a new technology. And we don't, we don't talk about blockchain when we're meeting potential clients. That's not the point, but because it's new technology and they figure out it's blockchain, you know, it's, it's, it's going to be a little bit until they're totally comfortable with it. But when they do, I personally think it's a slam dunk.
00:23:36
Speaker
I think you know in this case with FEMA I mean they see the benefits firsthand because all the documentation is there it's immutable so it's not like it's subject to any interference stuff like that so they see the benefit but if you kind of go back to like the voting example where there is maybe I'll just say inherently a high degree of public skepticism about these
00:23:59
Speaker
huge weight relative to the level of trust. That's not an example. There are other systems that have to carry a disproportionate amount of trust as to whether or not the black box works. When we talk about trustless systems, this is just my own personal belief.
00:24:20
Speaker
The systems arguably don't need to be audited because they're essentially auditing themselves in real time. And once people understand that, they might be able to get there. But I just believe that human nature, we probably will still need auditors in those types of settings that is giving the public assurance, yeah, the black box actually is getting to the right answer. And it's just sort of the transition thing that as we get more comfortable with the technology,
00:24:47
Speaker
Eventually, that need for the manual auditing, I would say, might go away. How do we introduce this technology into the human condition that's inherently for these high-trust applications? Maybe I just say skeptical. How do I know the black box actually works? We have to think about ways that we can help the public at large just get more comfortable with these kind of systems. It may require a little bit of inefficiency in the
00:25:19
Speaker
during long term. Yeah, and in the first part of this series, we looked at, and I spoke to some folks at Lemonade, and they're using blockchain solutions to deliver crop insurance to subsistence farmers all across the world, where really, given all of the costs that are associated with traditional insurance, just printing the paper and all the layers of brokers and agencies, et cetera,
00:25:47
Speaker
made it almost impossible to deliver insurance to the end user in the situation where they're delivering insurance in that use case. But there they're not abstracting the blockchain out as much as you guys are. There is still
00:26:03
Speaker
a system that needs to be interacted with, there's cryptocurrency going from one bank account to another, and then a deposit ultimately made back if the insurance is paid out. So the technology is a little bit seamless in their sense, too. It's all done through text messaging, and even basic phones can run it. So they've abstracted it out a little bit. But I think the users still feel the blockchain more
00:26:31
Speaker
in that use case, here it seems like they don't really at all. I guess I've seen certain NFT platforms where users can use a credit card, they never have to actually know what a wallet is or interact with a particular wallet or address or really the backend blockchain stuff. They just log into their account, they see an NFT or whatever they want to buy and they do it on their credit card and they don't really know
00:26:56
Speaker
about any of the blockchain stuff. But I'm wondering, I haven't really seen too much of that other than really the NFT example I just gave and what you guys are doing. Are you aware of other applications where they're just sort of seamlessly running this technology in the background without the user really even knowing it's there? I haven't seen much. Many of the applications I've interacted with that have blockchain in them, the blockchain is very apparent.
00:27:24
Speaker
And to your point earlier, I think we're starting to move away from that. In my personal opinion, as a solution architect, blockchain to me is a force multiplier for the rest of the stack. It is a lens through which you look at a problem. It is not something you just put out there as a tool.
00:27:45
Speaker
for people to use. If you can follow that and going back to abstraction and abstract that away from the experience, it's absolutely a back-end process. It's not something you want people touching. And if you are clever enough to integrate it into the rest of the stack where you have Stripe, where you have all the other features involved, and you
00:28:09
Speaker
You use it appropriately and not force it into roles where it might not be clunky or it might be inappropriate for what you're trying to do. That's where you run into trouble. And I think it's because we focus so hard on blockchain caps lock. We love blockchain. Yeah, that's great. But that doesn't provide you a solution. And that's what we're seeing now. I think we're moving from that tech focus to solution focus now.
00:28:35
Speaker
Yeah, and I think we're also beginning to see, just to Peter's false multiplier point, other disruptive tech.
Blockchain and AI: A Complementary Duo
00:28:43
Speaker
interacting with blockchain in a mutually beneficial way, like applications for AI that does analysis on the record of transactions that are then on the chain to sort of look for patterns and to drive insights in a way that can even take to the next level. So I think we'll continue to see this intersection of some of these disruptive technologies, but all in the context, I think, of the point that Peter made of understanding the end solution you're trying to drive to the user and then
00:29:13
Speaker
necessarily abstracting the user from some of that complexity, so they just get the benefits of the result. Probably one of the biggest roles as a solution architect, a blockchain solution architect, is telling people no. I know that sounds weird, but one of the hats you wear is you don't need blockchain. Well, I want to buy a red, black, or blue blockchain. What are you waiting on blockchain for? And that goes not only for the clients, but for us as developers. Stop the hype. Just focus on the solution.
00:29:42
Speaker
Right. You're probably more likely to get someone come to you and say, I want to use blockchain. How can we do it? Rather than here's my problem. Tell me the best way to solve it. And then you can say, well, you know what? Blockchain can really solve this in a unique way. And it's appropriate here, not just, you know, not just blockchain for the sake of blockchain.
00:30:03
Speaker
It does happen when you solution with a client. They say, well, maybe blockchain. Well, hold on a second. Walk me through what is inefficient. Walk me through what's expensive. What makes your life horrible every day? Tell me about that. Let me as a solution architect worry about the tech. Don't worry about the blockchain. If I can help it, I'm not even going to talk about the blockchain. I want to hear what I need to fix. And if blockchain is appropriate for that, we'll do that.
00:30:31
Speaker
Yeah, it's sort of that question about, can you fix it in another way? Because if you can do it in another way, odds are the tech is probably better the other way than using blockchain. And conceptually, I think it's really important for the end user to appreciate. We use blockchain here because we're able to do something that is not possible through other means in terms of technology. And that's the critical piece of sort of their understanding here.
00:30:57
Speaker
Yep, that's great. And, you know, as I'm sure you are following, you know, cryptocurrency, blockchain technology, it has been a focus of regulators around the world and certainly here in the U.S. Is the regulatory environment something at all that you guys have to focus on or that, you know, play a role in what you're doing? And if so, you know, what concerns do you have
00:31:48
Speaker
use of the technology to transform the way we manage data in a more intelligent way. Peter also referenced that there's identity and other types of solutions possible. There's very little regulatory crackdown on those spaces. It's still very open. I do think eventually we do probably need some regulatory standardization.
00:31:48
Speaker
in that space.
00:32:15
Speaker
I wouldn't say we need more government oversight, but it would be helpful to have some industry consensus through the production of technical standards on minimum security approaches, things like that. And things that are done, I would say, at a principle level as opposed to a rule level. The rules are going to apply to different blockchains differently, but having some consensus on what those principles should be, I would say, would be very helpful.
00:32:39
Speaker
The other point just in terms of what it is that we're sort of focused on and concerned about is the one thing that I think we need to see more of in commercial use of blockchains is confidentiality capabilities because this is important to all of our
00:32:55
Speaker
Both our government and our commercial enterprise customers, they have to know that there's enough confidentiality built in that only they can see what they need to see in that sort of role-based access capability. So oftentimes that's something that we might either have to layer on top with traditional tech onto the blockchain, or we come to solutions like Avalanche and Subnet that gives it to us natively. So I think we will just continue to see this evolution in these types of enterprises.
00:33:29
Speaker
Yeah, I'd like to pile on there, Justin, to tell all my blockchain friends out there, if you want this to be mainstream, if you want that critical mass, you're going to need to play along with some regulation.
Regulation for Mainstream Blockchain Adoption
00:33:41
Speaker
We can't have it without that. Now, how we get to that regulation, I'm all for that argument, get private business involved in that.
00:33:49
Speaker
That's fine. We're going to have that discussion. But there is no doubt about it. We can't eliminate the government from blockchain going forward. We've got to help them get to that point. And when we get to that point, we'll see this flourish. But right now, the banks are waiting to hear the government tell them exactly what they need to do. But the government doesn't know exactly what to tell them. Same thing with identity. They're not quite sure yet. And we all know the government's not fast.
00:34:14
Speaker
But we can't abandon the idea that we need regulation. It has to happen. Otherwise, this will not reach critical mass. It will not become mainstream, regardless of how much we love it. It seems to me, and I'll ask you if you share this view or not, but it seems to me that for any regulator approaching this, it's an extremely complicated technology at any level, really. What's going on behind the scenes, how it works,
00:34:42
Speaker
different components that are involved. And like we were talking about, in a way, it's extremely transparent because everything's accessible. But in another way, it's extremely private because you have to keep all this secret codes and everything, exceed phrases very private. So this is sort of inherent intricacies in how people can understand this and adopt it. But putting that aside, it seems to me dangerous to regulate technology
00:35:10
Speaker
as opposed to regulating conduct or someone's behavior or misuse of the technology. But to regulate the technology itself seems like that might set a dangerous precedent going forward. I think I'm on board with that, Justin. And that kind of goes back to the solutioning discussion we had. It's not about the technology. It's how it's applied. Because, yeah, I can think of ways to use blockchain
00:35:39
Speaker
ways that we wouldn't find appropriate for a democratic society. I mean, there's considerations, for example, in China, the way they're using it. They don't want to see CBC because they are trying to unlock financial freedom. There's control there. And that's all because of the way you put the blockchain in the solution in this case. And that can be used in some nasty ways, if you're not careful.
00:36:10
Speaker
with that technology. I mean, I agree with your point, Justin. I think that if we have effective regulation, it really has to be more principles and conduct based because otherwise we end up locking into the current tech environment we have today, which is only going to, in the future, constrain innovation because then the regulators are going to be saying, well, you're trying to do something that the rules don't allow for, you know, and it's just it's not a productive conversation because then the regulators are trying to
00:36:37
Speaker
sort of constrain or you feel compelled to somehow bring your innovation in line with these antiquated rules. So, given how difficult it is for the government, I think, to agree upon rules, principle space just seems the way to go. And then to have that underlying flexibility that we all agree on the values that we want to try to see being met and the government then has the flexibility in terms of how those are achieved.
00:37:06
Speaker
Great. Well, I think we're nearing our time here. This was a great discussion. I thank you for both coming on. And I guess I'll just ask if any of you have any final thoughts or final words you want to part with. The floor is yours.
00:37:27
Speaker
Yeah, I think we just remain very bullish about this overall technology and its impact and eventually the receptivity of this in the U.S. I mean, I think now, as you mentioned earlier, and there's a lot of regulatory uncertainty right now, I'm fairly confident that this, we will find our way through this, you know, and it becomes, I think, for
00:37:53
Speaker
competitive leadership priority for the country and necessity that we have to work our way through it. So I'm confident we will. So for those of us that are a little bit doubtful about where does this sector go, I think it's going to continue to grow. And it's probably more important now than ever that we have all of the advocates that are leaning in and believing this technology really engaged in helping understand all of the benefits that it can bring to our representatives, our regulators, et cetera.
00:38:24
Speaker
And I would add, you know, from a design and being in the weeds, be pragmatic in your designs, be practical.
Pragmatic Blockchain Applications
00:38:33
Speaker
You're not gonna fix the world with blockchain. I know there's a...
00:38:37
Speaker
great air of altruism around it. And it's going to save the universe. It's not. But it is something that's powerful. And it is exciting. And we all want to see it excel. But if you want to see that, we need the regulation. We need to be pragmatic. We need to be practical. And we need to think of solutions that are appropriate for the technology. Don't shove blockchain down a solution where it's not appropriate. It just hurts. It hurts the ecosystem as a whole because it makes us look clumsy. That's my advice.
00:39:07
Speaker
Well, those are great parting words. So again, I thank you both for joining me today and have a good one.
00:39:18
Speaker
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