Blockchain is a technology that has been around for more than 10 years now, yet it’s applications are limited. More importantly, businesses are still struggling to realize the importance of the technology, and how it can be used to deliver value.
In this episode moderated by Frank Wammes, Chief Technology and Innovation Officer, Capgemini Europe speaks to John-Paul Thorbjornsen, Co-Founder and CEO of CanYa, and Duncan Cameron, an expert in blockchain from Capgemini’s Applied Innovation Exchange in Melbourne.
A well-known concept of economic theory is the ‚tragedy of the commons’ – which is used to indicate that when a group of strangers are given a shared resource, they will act in their individual self-interest, and consquently the shared resource will deplete very fast. John-Paul explains how blockchain can provide a solution to this problem.
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Transcript:
Frank Wammes:
What’s the first thing that comes to your mind when you hear blockchain? For most people it’s Bitcoin, but we need to separate the technology from the platform and its use cases. It’s easy to forget the bitcoin is just one application of a new technology. In some ways it’s analogous to the early days of the Internet, when Hotmail was an exciting new discovery, and the internet was synonymous with email.
Welcome to the second episode of the Applied Innovation podcast, brought to you by Capgemini’s Applied Innovation Exchange. My name is Frank Wammes, I’m the Chief Technology Officer for Capgemini Europe, and today I am in the fortunate situation to be joined by John-Paul Thorbjornsen, Co founder of CanYa, a blockchain based startup from Australia, and Duncan Cameron, our resident blockchain expert from the Applied Innovation Exchange in Melbourne.
JP and Duncan. Welcome to the show.
John-Paul:
Hey, thanks for having us on board where we’re really excited to chat to you today.
Frank Wammes:
I was really looking forward too, but I would like to start up with the question to you, Duncan. Most of you and most of the audience that are listening to this podcast, are quite familiar with blockchain or would have at least read about it, but just to make sure that everybody’s on the same page, could you give a quick refresher on what blockchain really entails?
Duncan:
Sure. Thanks Frank. So blockchain is basically a distributed ledger system that secures data or transactions, via cryptographic links or blocks, that are all joined together in a chain. Now, new blocks of data are kind of continuously added onto the chain, allowing participants in the blockchain to update information as well as verify and trace all the transactions that have previously been lodged onto the network. So in summary, it basically allows multiple parties that may not necessarily trust each other to transact and exchange information via a decentralized network without the need for a third party to verify that information.
Frank Wammes:
Oh, that’s very cool and short description. What is the trigger why it’s such a hype at this moment in time, do you think, Duncan?
Duncan:
A good question. I mean obviously most of our listeners may have heard of bitcoin. The very infamous bitcoin, which kind of exploded in the last few years in terms of hype, speculation and of course value, and I think it wasn’t until people started taking notice of blockchain as a technology, and started exploring its use cases beyond just a payment system, which is what bitcoin is, but seeing where else we can implement blockchain to kind of securely transact and verify information exchange between parties.
Frank Wammes:
Well thanks Duncan. I think that is a very good to explanation, and that brings me to what CanYa is doing. JP, could you tell us more about your company, your background, and what exactly attracted you to this field of blockchain?
John-Paul:
Awesome. Thanks Frank. We are creating a decentralized ecosystem for the gig economy. So in one very quick way you can say it’s the gig economy, powered by the GIG economy. Because we believe by using decentralized technologies powered by blockchain, we can reduce the operating costs of a marketplace to almost negligible amounts. And by using cryptocurrencies we can facilitate, or the platform can facilitate a medium of exchange between two parties paying for services, in a very trustless and permission-less way. And the end result is basically a marketplace, an online marketplace like Upwork, but it runs by itself. It runs through rules that have been published onto the blockchain, which govern how value flows between participants of the ecosystem. And it also allows anyone in a commission-less way to stake tokens into the network, which is an economic value, and become aligned with the marketplace ecosystem, and help contribute to the maintenance, upkeep and operational support of the platform.
And this has never been done before. It’s because for the first time ever we’ve been able to solve the tragedy of the commons, which is a well known phenomena where if you give a group of people who may or may not know each other a shared resource, then everyone should naturally act in their own self interests, and very quickly the shared resource is used and it’s depleted. It’s called the tragedy of the commons.
Now in CanYa, we commit the value to the ecosystem, which becomes the resource, but because the rules of the resource are already predefined, and can run without any rulers, it actually encourages everyone to continue to act in their own self interests. But now the self interest’s aligned with that of the ecosystem. So for the first time ever we’ve been able to solve the tragedy of the commons by using blockchain technology.
And this is most interesting to me and most motivational for the team as well, to know that we’re creating something that previously could never have been built before, and that’s what mainly drives us, and excites us.
I have only recently, in the last two years, been involved in building businesses on blockchain. I was actually an air force pilot and an engineer for the previous 12 years, but I’ve been a bitcoin adopter for just over five years now, and bitcoin allowed me to see how, for the first time ever we can redefine what value is, and ready to find the rules around by which value can be transmitted.
So that got me into cryptocurrencies and blockchain, and certainly Satoshi Nakamoto’s original white paper, was most definitely a redefinition of electronic cash, digital cash, between two peers with no intermediaries, and that philosophy still underlines and underwrites what we’re building with CanYa. That there are no intermediaries, and it’s completely peer to peer. And that’s where we are today, so very excited to be part of this industry. Very excited to be building something that’s never been built before. And that’s what we’re doing.
Frank Wammes:
It’s really interesting because actually this is the second time this week that I’m talking to a former air force pilot. At the beginning of the week, I had a conversation with a guy who’s now in a startup on drones, and who basically wants to make sure that through very simple apps, you will get more regulation and more insights on drone delivery.
Is it the case that perhaps if you’re up in the sky, you have a better overview of what’s happening? That therefore all these great ideas are coming from air force pilots or, what is it JP, with people in the air force?
John-Paul:
We like to question and challenge our surroundings. As a pilot, you have to be very focused and be ready to take on any challenge, and certainly the industry that we’re in is definitely nothing short of challenging. Nothing is… very little is defined, there’s very few rule books to go by, so I think we just gravitate towards the challenge of the industry.
Frank Wammes:
Oh, that’s very interesting. Well, I’ve got another question. There seems to be a little bit of confusion around the different types of blockchain. The bitcoin blockchain, for example, is probably the most popular and distributed public blockchain in operation, but they’re also other private blockchains, which are really becoming popular in the enterprise, like Walmart and DHL. Duncan, can you tell us a bit about the types of blockchains you are exploring with your clients?
Duncan:
Sure. Thanks Frank. Yeah, this divide between kind of public and private blockchains is a very interesting one, and a lot of our clients that come to us come with kind of a misconception that everything they’re going to put on the blockchain is going to be publicly broadcasted, and everyone’s going to be able to see it. Obviously that’s a concern for a lot of large businesses that are dealing with sensitive or confidential information, so the key differences in public blockchains, anyone’s allowed to read the content and anyone is allowed to write through the blockchain by operating a node, which means they are contributing to the network’s consensus protocol. This also introduces the concept of pseudo anonymous participants, because effectively all you need is a computer and an IP address and you can become part of these public blockchain networks.
In contrast, we have private blockchains. Now the key difference is, the actors or the participants in the network are already known to everyone else in the network. So any authorized participants can read and write information to the blockchain. So the solutions we’re predominantly exploring at the moment, clients are very much focused on these private blockchains purely because they are often dealing with sensitive or confidential information, and so we see private blockchains or what’s known as consortium blockchains, as having a really strong value proposition to connect various parties that may exist within a particular industry or particular business model, and these parties have to kind of communicate with each other, whether that’s within the business or outside the business. And when I talk about communicating with each other, I’m talking about all kinds of industries from logistics, supply chain management, prominence tracking, any real area where you have multiple parties that need to verify information that’s exchanged between them. And blockchain provides the ability to do that in a secure and an immutable way.
Frank Wammes:
Can you give me some examples of application? So is it the, it is supply chain or is it different kind of firms? Can you give some examples of applications that you are exploring with clients?
Duncan:
Sure. I mean one of the key ones we talk about is in kind of retail goods and consumer goods. If you’ve ever had a discussion with me, I may have brought up the example of running out of milk at home, for example. You have this kind of intersection of IOT, sensory data and of course blockchain technology. The common scenario is your consumer comes downstairs in the morning to make their morning coffee or cereal and they open the fridge and they’ve run out of mil. Using a combination of IOT, a private blockchain network, and smart contracts. Smart contracts are basically self-executing protocols that exist on the blockchain if anyone’s not familiar with them, and we can use these IOT sensors to basically firstly detect when your milk’s running low. That sensory data can then be fed through directional channels via a blockchain to your local supplier, informing them that the customer’s are run out of milk, they need more milk.
That milk can then be delivered directly to your doorstep, also by executing a smart contract, and then upon delivery a smart contract can be used to then finalize and execute settlement payment to the supplier. Now all of this can occur in real time without the customer needing to actually do anything or be aware that they’ve run out of milk, and additionally, blockchain provides full traceability. So there is an immutable record of every single event in that cycle happening, right from when you first realize you’re out of milk, or perhaps don’t even realize you’re out of milk, your sensors to do it, right to the milk being replaced in your fridge before you even get home. In summary, huge potential in terms of automation, transparency and certainly creating a very unique customer experience.
Frank Wammes:
Well that’s indeed a very good example, but I have a critical question. To what extent are we not looking like, you know, blockchain is the answer to any problem, or is this something that through automation you already could have done as well? So what’s the value of blockchain?
Duncan:
It’s a very good question. And again, a lot of the clients we speak to come in with a lot of kind of preconceptions about what blockchain can do, what blockchain can’t do, and I agree that to an extent, a lot of that is driven right now by kind of hype and speculation, particularly riding off the coattails of bitcoin.
The reality is that you’re right, blockchain won’t be the solution to every problem, and one of the biggest challenges we face here at Capgemini at the moment is basically sitting down with our clients and articulating what the use case is and how we can utilize blockchain to actually deliver value. Whether that’s value to customers, or value to the business, or whether that’s just automating processes within the business. So yes, I agree it’s a real challenge, but given the technology is still very much in its infancy, the biggest challenge we have is working with our clients and with our wider partners to try and articulate those use cases and then find where the real value is.
John-Paul:
Yeah, and what you already said it, it’s the traceability and the irreversible character of the blockchain, that when trust is in place, then probably blockchain will be a very dominant element, and a solution, I think.
Frank Wammes:
So JP you gave already the explanation that you are building the platform, but in what kind of use cases do you see your platform being used? What are the things that you are currently working on?
John-Paul:
That’s a good question. So one of the main problems with blockchain and crypto currency at the moment is the use experience and onboarding into the platform. It’s very hard at the moment, because the infrastructure is so new, for new people who are not familiar with cryptocurrency to enter the ecosystem without a lot of friction being created. So whilst at the same time we’re building our infrastructure will allow us to help take cryptocurrencies mainstream, and the benefits of cryptocurrency mainstream. We need to focus in people right now who are familiar with crypto, and that’s our flagship marketplace is CanWork, which is a marketplace built for digital freelancers, developers, designers, virtual assistants, who are already very familiar with cryptocurrencies and technology.
But we are also intent on building marketplaces for a number of rather different platforms, such as essentialized marketplaces for recruiting we’re about to launch another platform, called CanSeek, which allows anyone to become their own recruiter and for companies to put up bounties to attract recruiters. But we won’t stop there, we believe… and there’s certainly a lot of evidence pointing to the fact that people like to work for themselves rather than the ye old industrial revolution, nine to five job that we’ve become used to.
A study said that 40% of America, in the next five years is going to migrate towards freelancing, and the gig economy, such as [inaudible 00:15:51], and we want to be part of that. We want to build a platform that allows people to work in a freelance role, or the gig economy, but to not be ripped off by fees. To retain control of the data, and the wealth, and their identity, and to communicate and trade their time and skills, to anyone in the world’s in a permission-less, global, border-less marketplace.
Frank Wammes:
And that would mean…? Is that by you know the, the payments towards the freelancers or also with the smart contracts on what are the conditions that we’re going to work in? Can you illuminate a little bit on that?
John-Paul:
Sure, so the platform is designed so that it on-boards basically any skill or service, but each vertical is tuned and optimized for each service. So the marketplace that we build for recruiters is going to be different than the marketplace that’s built for designers and developers. But anyone can join. It’s permission-less, and we certainly see our technology being used for practically any marketplace, like local task or if you sell artwork in a local environment, our marketplace could serve that. Sharing of homes, sharing of office spaces, so basically any good, skill, or service that can be shared, and that there’s a medium of value trans to it, then the CanYa infrastructure is appropriate and great to use. And the rules of the smart contracts that power the platform, are mainly around the transfer of value, so that the value of a job that is agreed is locked up by the blockchain or escrowed by the blockchain, before the job’s been done, and that the escrow is not released, or can only be released by the client when the job has been done to their satisfaction and all of this is governed by the blockchain.
Frank Wammes:
It’s very interesting because that is then also like an enabler for the sharing economy almost. You can have all different kinds of applications where if sharing is a key part of of the business model, then the blockchain will enable a smoother settlement of the values. Is that a good interpretation?
John-Paul:
Exactly. Yeah. I’d say we definitely agree on that. That is definitely the vision, that there should be no limit to what you can share, and what you can transfer value around.
Frank Wammes:
This is really cool, and it comes actually back to a article that I read by an analyst who said like, you know, 10 years ago we have this perfect storm with mobile and cloud and data and social, which if you look at the merge or the mash-up of those technologies that led to the Uber’s, the Airbnb’s, the [inaudible] like you know, all the [inaudible] that now know basically were made possible because we had this mash-up of these new technologies.
Now if I look at, and that’s the argument at Ebay is like, you know, we are now in another perfect storm where now we’ve got blockchain, we’ve got IOT, we’ve got AI, perhaps even, you know, the mixed reality in it. What kind of companies do you think or what kind of value proposition will this combination bring? Do you have any predictions, because he actually said like, you know, we’re now going to find out, but do you see value in mashing up these kinds of technologies and drives new business propositions?
John-Paul:
Yeah, I think it’s very clear for me that with blockchain technology and tokenized assets and the tokenized economy, that we are going to see new business models. We’re going to see business models that don’t require the collection and selling of data, that don’t require to trend, to require your money to be transferred via centralized accounting and commissions, heavy commissions taken on top of that.
We can see business models around where machines talk to each other, where there’s more of the implementation of programmable money, where for everything that you buy and sell today, or for all of us, we make that decision. But in the next five or ten years, we are going to give our machines permission to make, buy, sell and transfer value decisions, with the rules that we give them, and a very good example of this is as a, and this actually [inaudible 00:20:40], but I see that in the future, if you wanted to overtake someone, you would put your car on James Bond mode, and it would overtake everyone on its path, but it would pay them to overtake if it came across a slow car and it’ll just pay them a dollar and move around them and away they go.
So we are going to tell the machines to act on our behalf, and make more decisions around value. But then the next question is once we give our machines access to value and programmable money, are we going to teach them, are they going to experience a characteristic like greed, like cheating, like theft are our machine is going to steal from us? Because once they gain the notion of what is valued, and if you think about humans psychological drive and motivator for us, we are generally, ninety nine percent of the world, is generally motivated to economic gain. So once you teach our machines the value, and how to gain economically, is this going to cause a singularity, where suddenly our machines become greedy and want to take over the world and that leads to epic amounts of inflation and growth, that’s not driven through us it’s driven through our machines? These are all very exciting and interesting questions to answer.
Frank Wammes:
Yeah. Yeah. And I, and I hope on a positive outcome, as Elon Musk says, I hope that machines are nice to us. By the way, really like the example that you gave from the James Bond car, because although perhaps some of the listeners will think what a strange example, I’m also involved in an organization that stimulates the innovation in mobility, and actually if you look at trucks are tuning, so where the trucks are driving behind each other, one of the major difficulties that they see is that the one who is riding upfront will always use the most oil. So there is no incentive for the one to be up-front, and actually I think the example that you gave is a good example on how we can solve that.
So if there is a platoon of trucks that based on the usage of the gasoline, the system and the interactive system can basically determine like, you know, what is the value exchange that the different trucks need to have with each other in order to have an equal cost parameter while all having the benefits of driving in a platoon, and if we can’t solve it, and I think this is actually a very good example, of how you, how you stated that blockchain will help. This is actually the things that we need to solve in order to get this autonomous platoon trucking kind of mechanism into play. So I really like that example. Duncan, do you have any perspectives on what you think of this mash-up of technology will bring our society?
Duncan:
Yeah. Thanks Frank. I’m careful because we can open up a whole can of worms on this area which could go well beyond the scope of this podcast. You could probably chat for hours about it, but two things I will add. If you don’t know, I’m actually also a lawyer and come from a legal background, and the legal industry is obviously set for a huge shake up with the advent of not just blockchain, but also smart contracts in general and this and this kind of principle that code is law, and so you can execute transactions on the principle that you can rely not on lawyers or written text or kind of the English word, but rely on hard coded rules to execute transactions, to distribute assets to, you know, to drive your autonomous car even, and you rely on blockchain to provide all that data for that to actually happen.
One of the prime examples I think of is obviously distribution of estates. If anyone’s had the pleasure of dealing with wills and estates you’ll be familiar… you’ll probably be aware that the process can be quite lengthy and difficult and obviously quite expensive. Blockchain can obviously digitize a lot of that distribution process. It provides a single source of truth to verify firstly the contents and declaration of your will, but also distribute everything from your significant savings, titles, deeds to properties, any other various assets you can tokenize and distribute almost instantly at the point of death, which vastly speeds up and also provides a new level of transparency and authenticity to distribution of assets. Of course, this isn’t just confined to wills but extends to all kinds of industries that may require some form of moving or distribution of assets.
The second point I’ll add is, which JP is obviously very familiar with, particularly having worked with CanYa myself, it’s kind of fundamental with their business model, is this shift from business models that serve shareholders, to business models that serve stakeholders, and the ability to use tokens, whether it’s utility tokens or cryptocurrencies or otherwise, provides a method for businesses to construct business models that rely on the co-creation of value amongst participants within a network, rather than the traditional method of be serving shareholders, ensuring your profits are gradually increasing. The ability to kind of align those interests by circulating a native token, for example, whatever it may be, opens the floodgates to whole new business models and whole new ways of working and engaging with customers.
Frank Wammes:
Yeah, that’s some other really good examples, and I do agree like you know, we can talk for hours. It is the singularity kind of world that’s lying ahead for us, but we don’t have that time. Therefore, I would like to come back and ask you one more question, and the question is, where to start? And actually I was in the ONS, in Stavanger, it’s the largest oil and gas conference in Europe, and I spoke with a guy and he said, „But where do I start now? Should I start from the business issue, or should I just start exploring from, you know, just take blockchain and what can I do with it?”
John-Paul:
Yeah, it’s a great question, and I would always recommend that users who are new to blockchain start off by reading the bitcoin white paper, which is at bitcoin.org/bitcoin.Pdf, because it really contains some fundamentally timeless concepts around what a blockchain is. And then as Duncan was discussing about before, that public blockchains are very different to private or permission blockchains, in what they’re to achieve and the end goal. And currently at the moment blockchain is a very esoteric industry, where it’s so hard to understand, and takes months to wrap your head around the concepts and the opportunity.
But I would like to stress that there is a huge opportunity at play, and it is definitely worth the investment of your time into understanding those core concepts, and as Duncan alluded to, blockchain doesn’t solve world problems. It’s very good at solving a subset of those problems. So I think the biggest thing for new users and new employments of this technology and this space, is to really define what a blockchain should be doing, rather than what it shouldn’t be doing, and then building an ecosystem around that. What do you think Duncan?
And Duncan, from the applied innovation exchange, what would be your advice and then also perhaps together with JP, because I think you work and collaborate together with JP in that setting as well. What would be your advice to clients who start exploring? Should they just take the technology and look for opportunities or is it you know, first come with a very big business issue that you have and see if blockchain is relevant?
Duncan:
Yeah, absolutely. I mean drawing on some of my experience working in the Melbourne AIE with some of our clients in the blockchain space. Obviously as I mentioned before, blockchain won’t solve every problem, and in fact a lot of the clients we speak to are having trouble articulating where, they know blockchain is an exciting new innovative technology, and they want to kind of get the hands on as fast as possible, but then we need to kind of slow down a little bit and just articulate what the business case actually is, and where the value is for our clients in actually building a blockchain, and where we can kind of shift or pivot their business model to now include this new piece of technology.
A lot of those kind of situations will involve integrating current architecture. Your cloud solutions won’t disappear, your ERP solutions won’t disappear for example, but there are definitely avenues now where we can find niches to start building blockchains with our clients, or even just working on proof of concepts, to start to articulate where the value is in implementing a blockchain, and how we can start shifting our businesses into a new way of working and a way of utilizing this technology now, and into the future.
Frank Wammes:
Excellent. Some great insights, and new insights and perspectives again from this podcast. So gentlemen, thank you very much. JP, if people want to know more about your company or want to have more interaction with you, where can they find you on the social media?
John-Paul:
Absolutely. Just search for CanYa, head to CanYa.Io, or check out our new marketplace, called CanWork.io, and you can catch me as @jpthor, on most Twitter, Reddit, Medium, LinkedIn.
Frank Wammes: Excellent. Duncan, if people want to have more information about the applied innovation exchange, or the things you’re doing with blockchain, where can they find you?
Duncan:
Absolutely. Obviously reach out to myself, Duncan Cameron on Linkedin. Otherwise we have a growing blockchain community here in Melbourne and in Australia, at Capgemini, so just reach out to our socials and you should be able to find us.
Frank Wammes:
Well, excellent. Well my name is Frank Wammes. You can find me on F Wammes, on both LinkedIn and Twitter. I hope you enjoyed this podcast. I hope you gained more insight into blockchain. And if you have more questions, please reach out to my guests.
If you have suggestions or questions for other kinds of topics for the next podcast, also please interact with us and we’d love to hear from you for next time. This is the Applied Innovation podcast brought to you by Capgemini’s Applied Innovation Exchange.
