A few days ago I was at a dinner with friends
and one of the people around the table started talking about Blockchain.
So I was curious, because it’s been over a year now
I’m working on the Blockchain.
And from this dinner, I remember two things:
the first is that everyone had heard of it before
and the second is that, overall, nobody understood anything.
So what’s the Blockchain?
I’m asked this question almost every day now,
and the truth is that there are many different definitions.
I will give you one,
Even if you will see, the definition is not what is most important.
The Blockchain is a technology of storage and transmission of information
secure, transparent, functioning without a central control body.
Concretely, what does it look like?
A Blockchain is a register
which contains information, data, transactions;
this information will be grouped into blocks
– that’s why we say a chain of blocks,
in English, a Blockchain.
This register has a particularity: it is not stored on a central server
but he is held by lots of computers at the same time.
The registry will be stored on a large number of servers,
called the nodes of the network.
This is very important because it makes it harder to attack.
If one of these servers stops working,
all others continue to store the registry.
But above all, the Blockchain works without a central control body.
What does it mean ?
It means that there is not a centralized entity,
a company, a person, who has his hand on the register.
It’s an algorithm that will allow all users
to agree on the state of the register at a time t.
Generally, once I say that, people look at me and say,
“And then, what is a revolution? “
It’s a revolution because the Blockchain
allows the exchange of value from peer to peer, without intermediary.
You will tell me :
“Peer-to-peer, it already exists, especially with the Internet. “
That’s right: with the Internet, I can send you information
by e-mail, directly, peer-to-peer.
Except that this information, it will be duplicated.
If I send you a photo for example, in fact, I send you a copy.
You will have access to this photo, but I too will always have access to it.
It’s not a problem
when it comes to a photo, a video, information in general.
But that’s a big problem when it comes to value.
If I send you 20 euros, it’s very important that I do not have access anymore.
So all the peer-to-peer that has been made possible by the Internet finds its limits
when it comes to sending something that has value,
whether it’s money, loyalty points, votes,
train tickets, shares, etc.
Today, to get value, we use large intermediaries:
banks, governments, etc.
Except that these intermediaries, they are not perfect.
Last example in date:
a few weeks ago, in November,
the Indian government decided overnight
that the 500 and 1,000 rupee bills were out of circulation.
So overnight, 80% of the money in circulation is worthless.
Through this example, we realize
that these great intermediaries, in whom we place our trust,
sometimes they can make decisions that are not necessarily in our interest.
The question is:
would not there be a way to get value
without these intermediaries?
This question was answered in 2008
a person whose identity is still unknown
and that we know under the pseudonym “Satoshi Nakamoto”.
2008, you remember, it’s the economic crisis,
the banking system falters,
people no longer trust their bank …
Satoshi Nakamoto publishes a white paper
where he details the functioning of a digital currency
that works without a bank.
A peer-to-peer digital currency.
This digital currency, he calls it Bitcoin.
Bitcoin today, if we cumulate the value
of all the Bitcoin tokens in circulation,
it’s worth more than $ 11 billion.
Bitcoin has a course, which is established by supply and demand:
a Bitcoin is worth about 700 euros.
It’s a currency that does not belong
to no country, no government, no bank.
It belongs to all its users.
To make this digital currency work,
Satoshi Nakamoto invents a computer protocol
which will allow all users
to agree on the transaction history
which were made in Bitcoin.
This is the underlying protocol called Blockchain.
Indeed, this invention is revolutionary for several reasons.
Already because it allows a rebalancing of access to resources,
it allows two billion adults unbanked
to have access to financial services and to exchange money.
That’s why for that reason
than 90% of the volume of transactions made in Bitcoin
take place in developing countries,
because it is very easy to have a smartphone
but much more difficult to have a bank account.
More broadly, the Blockchain upsets the transfer of money.
Suppose we all want to make a transfer together
for a friend who is in the United States and who needs it tomorrow morning.
We know how it will be.
Already it is Friday night, so the agency will be closed.
It will be an American RIB, so it will take longer.
In short, it’s almost impossible with a conventional bank,
it will take days,
and there will be quite a large transfer fee.
With the Blockchain, especially with Bitcoin and other crypto-currencies,
I can send money internationally,
in minutes, and at almost zero cost.
But the currency is only an application of the Blockchain.
This is the first, historic, especially with Bitcoin
But it is not the only one.
If we manage to create trust between individuals
to exchange money,
we manage to create trust also on other elements.
First example:
in some developing countries,
it is sometimes extremely difficult to prove
that you are the owner of your land or your home.
Either because there is no cadastre
to list who owns what,
because there is a cadastre,
but in the hands of unstable governments
who can modify it as they please.
Imagine someone coming to your house
and say, “This house is mine. “
and you have nothing that proves otherwise.
In Ghana, there is an NGO called Bitland,
who created a decentralized registry running on Blockchain
to certify the existence of title deeds.
As this register is distributed,
no one can unilaterally decide to modify it.
Thanks to the Blockchain, we will allow individuals
to prove more effectively
that they are the owners of their lands.
Second example: the music industry.
If you are an artist, you create a song,
you want to sell it on a download or streaming platform;
in general you pay a fairly high commission, between 20 and 30%,
and an annual subscription.
But above all, your compensation comes at the end of the chain.
That is, the platform will first collect all the revenues
before you redistribute some and you will be the last to be paid.
With Blockchain, artists could be allowed
to manage their rights in real time
and to be paid automatically once a work has been consumed,
basically as soon as a song has been listened to or downloaded.
It would allow artists to regain control over their works.
There are applications in almost every sector.
Local communities of peer-to-peer electricity exchange could be created.
This is what is being tested at [Lyon] Confluence.
We could with the Blockchain better protect our privacy,
by giving citizens control over their personal data.
In short, all these applications, which seem very utopian
are indeed being tested.
And they foreshadow a new world
where we could self-organize thanks to technology
by dispensing with intermediaries in whom we no longer have confidence.
Somehow, it makes sense,
to prefer to trust an algorithm
rather than an intermediary,
because it is less subjective,
because it belongs to the community that manages it.
But once you say that, you still have a lot of questions.
We are talking about the elimination of intermediaries,
but today an algorithm can not handle everything.
The Blockchain can certify the existence of title deeds.
Certainly,
but she can not check if your title deed is genuine,
since she can not read the document.
She can not come to your house and check that you are the owner.
We can already answer a question:
no, the Blockchain alone will not completely replace the notaries.
And then, the condition sine qua non for a service exists,
it is that someone, a community, a company, creates this service.
We are talking about an Uber without Uber, thanks to the Blockchain.
We could, thanks to the Blockchain,
automate direct transactions between drivers and passengers
without going through the account of a central business.
But at some point, my driver, I do not order it telepathically,
there must be a service that allows me to access it.
Same if I want to make Bitcoin transactions,
I do not go through a bank, but I go through an exchange platform
which allows me very intuitive way, very fluid,
to buy Bitcoins, to exchange them.
So, what we see is that all intermediaries
that we try to eliminate with the Blockchain,
they are recreated elsewhere.
It is for this reason that today,
many very large companies are very interested in Blockchain.
Because they see it as both a threat and an opportunity.
If the Blockchain facilitates relationships between individuals,
it also facilitates business relations.
For example, on a complex supply chain,
where there would be multiple partners,
or to optimize contractual relationships.
So companies will seek to appropriate this technology.
They will create prototypes, build consortiums,
sometimes even build their own Blockchain.
And what we see is that very often,
their approach is part of an incremental logic,
that is to say, we do not disrupt all of a sudden,
we evolve step by step,
we are slowly transforming, we are appropriating technology.
This is the paradox.
The Blockchain is not a technology that is added to the existing system,
it’s a new model in itself,
based on the concept of transparency, decentralization, trust.
We must not believe that the Blockchain will be the solution to all problems.
I am often asked why the Blockchain can be useful
to such sector or job.
The Blockchain was not created to be useful
to a sector category or a trade category.
It can be, provided to radically change the business model.
Let’s take a comparison.
Beginning of 1990-2000, when the Internet developed,
all industries wondered
how they would use this new technology.
At the time, the music industry said:
“Let’s create DRM (Digital Rights Management)
to prevent everyone from sharing the songs. “
She could very well have created innovative services
like Deezer, like Spotify.
Obviously a posteriori,
it’s easy to say what should have been done.
What we see through this example is that all too often
we seek to use technology to protect the gains
rather than to question them, and to transform everything in depth.
Like the Internet in the 2000s,
the Blockchain has the potential to radically transform
our organizations and our society.
And so the question that must be asked now,
it is: “What do we want to do with it?
How do we want to transform our society? “
The Blockchain will most likely be tomorrow’s trading infrastructure.
It is time for all of us to take part in its construction,
during our free time, our work, or even during a simple dinner.
Thank you.
(Applause)
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