blockchain, finance, Fintech
by Trond Arne Undheim, Ph.D.

The future of enterprise blockchain – show notes from futurized #25

Intro (00:01):
Futurized goes beneath the trends to track the underlying forces of disruption in tech policy, business models, social dynamics, and the environment. I’m her host thrown on her own time, futurist and author in episode 25 of the podcast, the topic is the future of enterprise blockchain. The guest is Toby Lewis, CEO and founder of Novum Insights, the frontier tech monitoring company. We talk about the financial services industry in London right now, the influx of fintech, and specifically about enterprise blockchain and its impact on corporations and on the investment banks that serve them.

Background

Speaker 2 (00:47):
Toby, how are you doing today?

Toby Lewis (00:49):
Really well, Trond. Great to be on your show.

Trond Arne Undheim (00:52):
Fantastic Toby. So I thought that we would start by bringing people a little bit up to speed on what you’ve been doing. So I know that you’ve had some time the global corporate venturing, and you’ve done a lot of different things in your career. Right now you are with Novum insights, which is a company you founded before that I know you studied philosophy and a few other things. What, why don’t you give us a little sense of you know, at least what is the most important thing that you think you, you have done in your career and what sets you up for, for where you are today and what you care about now?

Toby Lewis (01:30):
We actually met through global corporate venturing, and I do think that was a very impactful group to help set up, right? So there from very early on and had some great colleagues and just a great idea, really in terms of we sat out, my colleague came up with this concept of let’s track, everything that large corporates we’re investing in startups. And I think the business is, is still, still a relatively smooth business in some ways, but I think it was very impactful to help grow from last number that they had sort of 600 or so corporate customers from memory maybe more now, but they, they really helping that journey was, was a lot of fun really from like we were three free people, large share at the beginning. And it was a really fun ride trying to deeply understand. I was largely on the sort of analyst tracking side of that business, looking at exactly what the strategies were of a 10 cent or an Intel when it came to venture investing.

Trond Arne Undheim (02:52):
Can you give us actually a quick little overview, because like you pointed out the little outfit global corporate mentoring has an outsized impact, both in terms of communicating what global corporate venturing is today and teaching individuals who are entering that business about that. And perhaps also communicating it beyond the industry, but give us a little sense of what, what is this animal corporate venturing first and then we’ll move into FinTech and stuff in a second.

What is corporate venturing?

Toby Lewis (03:21):
So I think it’s an absolutely fascinating field, right? So, so the, and I think the nice thing about GCV is I think we, we help bring some best practices and a much bigger overview of everything that was going in on that, which I think is the impact they made. And I think it’s been really beneficial for that industry, but corporate VC is essentially the major activity of the corporate VC is large corporates investing in startups and taking typically a minority stake and trying to do the activity of a similar to a sort of sand Hill road VC, typically a partnership, but under the guise of a corporation and there are many, and it’s a very complex exercise to pull off well, because unlike a small partnership, you’ve got a corporation with thousands of people that it’s meant to be serving as a providing a toe in the sort of fast growth fostering company landscape effectively for those groups.

What does philosophy have to do with finance?

Trond Arne Undheim (04:40):
Hmm. I wanted to bring up one more thing from your background. We talked about philosophy for one second. You said you were a philosophy student and you told me it has shaped your outlook on life. I want you to expand on that just because, you know, in the UK, that’s a statement that some people might make. What, but what does that mean and how does that even happen that you then start out thinking philosophy has shaped your outlook on life yet you are obviously you’ve had a career in kind of news, financial news analytics and, and venturing. So how does that work?

Toby Lewis (05:14):
Yeah, so, well, I think it’s, it’s, it’s a great discipline philosophy just because it really is just asking questions and really attempting to sort of deploy rigorous thinking towards any subject matter really is what I’d say. It teaches you. So I was always relatively on the sort of mathematical logical side of that, but also very interested in just any, any element of why or how we live, right? So it’s, it’s like the Greek philosophers and any of the, the sort of bright thinkers in philosophy from sort of Vic and Stein to can. I mean, it’s, it’s a very interesting discipline because it’s all about who we are, what we do. And so then you can begin going as you go on the path of a career, that makes sense. And, and you, you actually pick this up before you sort of did the interview, you were kind of fascinated about the fact that I’d studied philosophy, which I think is like you say, probably quite an English discipline. It’s like everyone sort of picks whatever they feel like. And then go about figuring out how to make money a bit later, which I think is a great thing about the English system educationally. And work-wise because you get a very rounded, different group of thinking coming to the table. But I think in, in today’s day and age, maybe, maybe it would have been sensible of me, like to be a trend. I believe that you were a computer scientist by background initially, so

Trond Arne Undheim (07:14):
There’s background, but it’s, I just, I find it fascinating because I’m getting more and more interested in this question of, you know, what is it that’s going to prepare us for the future as a species and as individuals and you know, what kind of background, because actually it’s not the case that everyone is going to be able to afford for eight or 12, in my case, years of education, in order to prepare you for whatever you think you want to be doing. But on the other hand, these kinds of broad perspectives and a set of deep perspectives, that’s more than one is actually I think, fundamental, but it makes a lot more sense to me. Now, when you point out that, of course it was the analytical philosophy and the logic part that fascinated you the most yet philosophy with all of its broad questions has also been universally helpful. So I just thought it’s just interesting for me as a, as a context.

Toby Lewis (08:08):
Yeah. And, and that surely on that when I, I asked you to master them philosophy as well and went to a great faculty that had a huge sort of cognitive science then, and there was the first, my first real exposure to like people doing AI technology and that kind of thing, almost model human consciousness. And that kind of thing was totally mind blowing actually. So I was really excited after a stint of the wall street journal when Jim who was also working at Dow Jones wall street journal with me basically decided to get deeper into tracking the venture world. And then it, it sort of, it almost brought me full circle in a way, because there were a lot of very similar, like the way I see the venture and startup world is very, and just very sort of business, creative ideas space where it’s, it’s a very similar mindset to do well, and you just need to be quite open minded, quite forceful, and being thinking about what, what a lot of the tech trends and business trends that are going on, what they mean for how users are going to develop and what’s going to be interesting to really take things forward.

Trond Arne Undheim (09:38):
That’s fascinating, definitely cognitive science and all of its siblings. You know, it’s very much a part of, of this venture here with, with the podcast as well. So bringing us a little bit into FinTech and the financial services industry, I know that your office and activity really is in London, but you told me when we spoke earlier that you actually got out of London pretty early, what’s be my eyes and ears on, on the UK right now. I mean, where are you? Are you still down in Kent? What’s happening? How has the city and city, as in the financial district dealing with COVID, what’s been going on over the past few months. And is there any sense of a opening of a, the financial services industry in terms of people being physically back or, you know, how do you see this?

Toby Lewis (10:30):
I think, I think people at the moment the offices are beginning to open up. Right. So I I’ve decided just because I, I don’t see this thing going away for a year or two that it’s quite nice living in Kent. And I think, I think showy, like the whole fabric of like the way where people live in Western society, that’s going to change. Right. And I think there is going to be a bit of a pull away from cities. So the, yeah, I’m, I’m staying in camp for the longterm beds an hour train ride from London. So in, in a sort of Silicon Valley context, you could be easily living in Palo Alto and working in San Francisco or whatever. It’s pretty much the same thing. So the, but it’s obviously, but I would say that the UK, because I think we did, we didn’t have the most stringent locked down and actually COVID was pretty bad hair, but the lockdown was cautious enough that I think that other than certain selected pockets, that it’s not that widespread that you, you can’t go to meet people outside office spaces are gradually opening up, but all taking a lot of precautions.

Toby Lewis (11:57):
And at the end of the day, I think a lot of people are going well, maybe I do two days a week in London, three days a week here, or, or less if you can get away with everything on zoom, why not right

Trond Arne Undheim (12:12):
Point out to my listeners, this is being recorded on the 6th of August, 2020. So that’s the timestamp for when we’re talking about this, let’s move into the heart of the matter that we had agreed to talk about. So you or your company, Novum Insights has been issuing and working on this report on and blockchain and trends in the, in the FinTech industry, in any case, give us a little sense of the, of the new study that you’re coming out with. What, what is it that you set out to discover? What are some of the findings? Well, you know, what’s the hot topic right now.

A New report on blockchain trends in the fintech industry

Toby Lewis (12:46):
We’ve been going for about four years now and looking at, at doing to the we’ve got various different sort of Python crawlers going out, mapping a whole bunch of frontier technology companies. So we look at blockchain, AI, FinTech, and then we’re expanding into the circular economy in green tech, which is about a hundred thousand companies. We, we, we use machine learning as well to map news sources and trends and tracking around them. What we found out from users is really, there’s a specific different groups of people who need to know very specific different things typically about what their, their competitor group are doing. So I’d say one of the major constituents for adoption of block chain will be the investment banking industry. So we’re publishing this block chain and investment banking analysis that, that when your show comes out, well, we’ll be ready and available.

Toby Lewis (13:55):
And effectively we looked at the different levels of adoption of, of every single major bank. What kind of software’s what kind of groups they’re using. And, and I think the, the big picture, and this is all of these groups are looking at how they monitor the transactions that they’re making keep, keep hold of the data photos about as ever with this kind of level of financial innovation. There are some that are fully embracing it, and some that are are pulling back and it’s been a very regulatory, challenged area just because of the the cryptocurrency space, which I think has been very, very controversial. I find it very exciting and interesting, but there’s a lot of noise and complexity, but there’s also a whole area around enterprise blockchain. That is where a lot of the banks have been spending their time adopting. And we’re looking in this report and monitoring that effectively. So I think

Trond Arne Undheim (15:15):
Blockchain is a fascinating technology, fascinating space. You seem to in this report, be focusing on corporate use cases, but specifically aimed at trying to understand how a specific actor in that industry, the investment banks are, are gonna react to this and, and what they should or shouldn’t be doing about it is this report by the way, going to be public what’s the business model around.

Toby Lewis (15:39):
So some of the findings of the report will be, will be public. I think the it’s purchased for where we’re currently deploying a whole host of graphics and things, but I think that will be, that will be a tiered layer of the, the major report that will be for purchase, because the idea is really, we know there’s quite a big demand within the investment banks to understand what that competitive landscape is because a lot of them are, are trying to piece together a strategy. And some of them are, for instance, there’s been adoption of the trade finance technology we trade developed by IBM, that’s been relatively widespread. Others are obviously are free quarter. Then there’s certain technologies that the groups are using that are beginning to gain traction, but there’s tens to 20 solutions that are popping up in all the different banks and people wanting to get a bit of a, a bit of a unified picture as to, as to what they’re doing practice for us Toby, because

Explaining what Enterprise Blockchain is

Trond Arne Undheim (16:55):
First of all, in the report, do you take for granted that people know what the basics of blockchain are? Or do you actually start from scratch considering that you’re actually trying to bring in new actors in the financial space to discover the opportunities. And then, you know, if you could speak to some of these specific solutions that you have looked at within that, you know, what are the main distinctions now in enterprise blockchain? What are we really talking about?

Toby Lewis (17:23):
Yeah, so the, the, the basic idea of blockchain, and I guess probably the easiest thing is to start with a definition, right. Which will be in the report, but it’s a it’s, it’s a consensus mechanism for the sharing of information between independent parties, that is a mute effectively. So allowing so immutability being data that is, that is stored permanently in a particular place. And in some temporal, why that’s particularly exciting in space like banking and of course bank banks are affective of intermediaries, right? So they’re looking to control the flow of information and these data sets are designed to be just the data that can be shared by anyone in the crowd with no sort of one party, more looking, looking over it. Right. and so the, the difference between a enterprise block chain is typically those those block chains are closed.

Toby Lewis (18:42):
So they can only have specific parties that are allowed to sort of play in that realm allowed into it. Whereas the, probably the, the blockchains, the cryptocurrencies that get a lot more attention and, and actually sometimes are being used by the enterprises well, in, in that tech stocks or the public block chains, and the reason why a lot of the enterprise sector is gravitating towards the sort of private area is there is a, there is an, there is a closed, safe space where they can share this information, but it’s still pretty radical because the D the information layer itself is put together by put together in a code based way, and different people, different organizations are finding different use cases for that.

Trond Arne Undheim (19:39):
What are the specific brands that are leaders and perhaps even laggards in this space? I’m just thinking back to my own expert network, the published a report on Bitcoin’s impact on banks back in 2014 and way back then. And, and, you know, one of our conclusions was the whole point is to understand the blockchain, but that’s already now six years ago. And there weren’t that many examples of adoption. We did find some in your report now. So just charting six years later, you have many, many companies. I believe you have a hundred top corporations that you have mentioned, have some form of blockchain experimentation. Can you give us a sense of within those hundred top corporations, I believe from Walmart to Maersk, what is the level of experimentation? How deep do they go with blockchain? You know, and, and, and how shallow can that exposure be in order to still learn and track and, and make use of it?

Speaker 2 (20:37):
Yeah. So, so a lot of these, these companies are and, and yeah, so there’s a, there’s a broader sort of enterprise blockchain base that we’re looking at on, on all the different sort of major corporate players and Walmart and Maersk, a particularly good example in that they’ve got tens of people at each company, all specifically working on this, and, and typically that they’re working with some of the larger vendors in this space. So the, the, probably the best known are IBM’s Hyperledger or Hyperledger fabric, where, where IBM is one of the bigger constituents in map. Then there’s our free quarter which got actually funded by a lot of the major investment banks and the, the different groups. So for example, mask that they set out in the originally, but they set out in the shipping industry to really say the, the mask set out to create a collaborative framework within shipping.

Toby Lewis (21:55):
They, they were using the IBM Hyperledger technology. And that, that project actually went through numerous iterations that ran into headwinds, because it was a classic problem of like you say, understanding the blockchain and how that, that might work. And originally when mass created it, they wanted to own all the intellectual property associated with the blockchain and then found they couldn’t get adoption within shipping without beginning to go treating that group a bit more like a consortium where they could allow different of the players in the, in the industry to, to share some of the ownerships. So, so then people could onboard and begin sharing data about, about the shipping transactions and how, how that would be split up at, at so it’s, it’s been a very evolving space, but the the, the key use case for a lot of these things, obviously in shipping keeping track of, of goods, where they’re moving to what they’re doing similarly, and in a big logistical supply chain company like Walmart, one of the really, really major use cases is going, where do you, how do you check the provenance of the good, where it’s come from, where it ends up, what ends up happening to it?

Toby Lewis (23:29):
So that’s been quite a fruitful field and it will or is already leading to interesting things, linked to supply chain finance, because if then you can go, well, this good has been received into our system, and we know it’s going to take a month to get from India to China or wherever you can, you can then go, well, the vendor can be paid in advance because we’ve now got it logged. And there’s a, there’s a methodology behind that

Trond Arne Undheim (24:02):
When you unpack the potential of blockchain, there’s, this podcast is about kind of the future operationalized a little bit as kind of the next decade, just because that’s a kind of an interesting business context. When you look at, look at the future, if you’re looking almost 10 years ahead, where do you kind of chart where you think this is going to go, where are we now? So we have kind of been through this that I’ve wrote about this six years ago. They were experimenting. Now you are charting this as a more massive trend. It’s embedded in many corporations. They are really experimenting with it in, in not just in the financial industry, but it gets applied across industries, which of course makes it a lot more relevant to investment banks because they don’t only have to think about it for implementing in their own industry, but it’s relevant for the companies that they engage with and their clients and how they you know, engage with the broader business ecosystem. Where is this going? What are kind of the barriers to adoption as you look at enterprise and, and the way that the blockchain perhaps gradually starts to become a true infrastructure platform that all companies are dipping into, but how long is this going to take? And what are kind of the adoption barriers that you see based on the report that you’re issuing?

Toby Lewis (25:25):
Yeah. I think the big adoption barrier is, is getting the, the technologies ready that everyone can be comfortable, that they will, that it will work at a scale that can replace their existing infrastructure. And I think that’s a, it’s probably more, it’s probably not right now. So a lot of the work seems to still be fairly proof of concept, or though the scale of the ambitions of what’s being laid out, like, like I’d say that the what Walmart is doing, for instance like that supply chain is absolutely enormous. It’s very, it’s very much getting in that sort of production ready state, but I think that over the next two to five years, you’re going to really see a ramping up as, as some of the issues around using the technology. Just make it a better form of collaboration than doing database technologies, or once it becomes the, the, the, the really compelling use cases are trotting out their numbers, the efficiencies that they’ve they’ve created the wastage that they, they get of.

Toby Lewis (26:44):
I think that’s the, the big, the big thing for all that wider where every single member of the fortune 1000 will, some of these we’ve successfully implemented this particular solution. And probably one of the signs of success is, is that people will actually be talking less about block chain because it will just fade into the background and it will be just something that things run. And and a bit like very few people nowadays talk about are I’m using the internet, is running on TCP IP that they’ll be using, I’m using a particular solution. That, that, that is, that is helpful for me.

Trond Arne Undheim (27:28):
That’s very interesting. A lot of observers have pointed this out to me that the success of a technology is when actually people stop talking about it.

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Trond Arne Undheim (28:50):
You’re a numbers guy. Toby, tell me a little bit about how you’re defined the numbers in this emerging FinTech space overall and what blockchain, and even in Bitcoin encouraged these part of the overall kind of financial markets now. And how is it evolving and growing specially maybe on the enterprise blockchain side.

Toby Lewis (29:11):
In each year in sort of 2019 and 2018, there were roughly, especially in 2018, there probably more than $10 billion was invested into this sort of wider blockchain projects. And there was a degree to which a lot of that traction wasn’t coming from the enterprise side. So it was much more in the sort of one, 2 billion on the enterprise blockchain area, but, Oh, and then there was a, there was a huge sort of mushrooming of investment in, into cryptos. There is some overlap there because, because some of those base layer companies that were being invested in were, are, are still things that you can implement a particular solution on over time.

Toby Lewis (30:09):
But there was, there’s been a lot of investment within blockchain into building the building blocks at the same time. You’re seeing billions of dollars go into the sort of wider fintech companies. I mean, you’ve seen sort of recent Revolut date of recent 80 million round, a lot of these sort of challenger banks and the light are getting significant funding, lending groups, various. I mean, I think it’s been both why the FinTech and blockchain have been very hot areas. The enterprise blockchain, once the, once the companies got funded by their various different consortium’s, you can’t quite measure it by a level of investment. You can instead see sort of the, the the constituent parts who’s doing, what build a picture of the relationships. And that’s kind of where we’ve been looking at it.

Trond Arne Undheim (31:11):
That’s actually going to be my next question, because what’s the transparency of this development, you know, when you’re mapping startups, which we’ll get to in a second, which is interesting in and of itself, you can map investment from VC and even corporates. Obviously, if you have access to those numbers and typically you kind of do, because they’re part of public disclosures when it comes to experiments on blockchain, to what extent do you find that companies even disclose the extent to which they are experimenting? And where do you find out about that?

Toby Lewis (31:41):
Yeah, so it’s very much, and this is a challenge. And it’s partly, I guess that’s always been where my niche, I guess, over the last 10 years, and that was very much what we did at GCV. It’s beginning to go, this is a fairly opaque space, but there are data points you can map. There are public sources that are coming out. How do we think about clever ways to collate those? And then effectively the way we always look to information sharing is there is the more pieces, the puzzle that you can build up and put out there to share the more feedback you generate. And then our view as a century, just be very persistent and very clear. And I think the, the way where we’re building this jigsaw of the enterprise block chain layer at the moment, I think will be exciting to a lot of different people because the it’s, it’s, it’s really interesting. I told one of the banks in our report, I shared some of the early findings with him as like, Oh, I didn’t realize we were involved in that. So the nature of these corporations is actually

Trond Arne Undheim (33:00):
Fascinating. So it’s a little bit of a tray that actually, you, you know, you start digging into it as an analyst from and platform, and then you share a little and then they give a little so that’s how now I understand what you mean by this is you sort of becoming a specialized focus. You actually have to dig into it in order to surface the information that then will yield the next big bit of information.

Toby Lewis (33:26):
And that that’s been, I guess, the niche I’ve always liked the greenfield area of information. And so and they saw it was very fruitful when we were at GCV. We basically, by doing that for years, I think people thought we were mad because it wasn’t very clear that that was a business model. And I think now if you look back on that just systematically mapping particular areas and going, here’s what you need to know. You get a very virtuous feedback because you basically get people. So we’ve already got a number of large corporate subscribers at November, but we’re anticipating the, the, the virtuous loop of these reports is effectively going well, you’ve uncovered and systematized all of this. So why but you need to know this and we need to try and get as much of an understanding about this variable. And the great thing about blockchains is inherently. They do have data. I mean, the private block chains are data, which you can manage more, more carefully, right? That’s why they’re being developed like that they are, but at the end of the day, people want, want to report accurately on what they’re doing and then they will want benchmarking and those kinds of things. Perfect.

What are the top startups in blockchain?

Trond Arne Undheim (34:55):
Let’s move to startups for a second. I know that you are now focused on enterprise blockchain. So perhaps if you would want to give me some startups that are servicing that market, that you are finding to be particularly promising and important to look out for, that might be the starting point, but then also overall in the overall blockchain space, and this could be public blockchain. What are some of the projects that you are tracking intensely and intently now and think will reshape this arena even just in the next?

Toby Lewis (35:26):
Yeah. Yeah. So the, I think there’s been a number of startups that, that have made waves that have got interesting from those that are quite late stage. So, so there’s a business called Everledger. It raised 20 million from 10 cent. Relatively recently, it’s, it’s it worked initially on the diamond trade. It’s believed that having essentially for blood diamonds it’s, it’s something quite important in that industry, obviously to ensure that something that has entered your system is verified not to be in something where human rights abuses and, and sort of bad things have happened to get them out of the ground. The, the, at the same time, they they’ve now expanded that to work with the company Tencent the does China’s largest social network. The and the thinking is a bit like Facebook’s Libra. That could be a new iteration of the payment channels there. And I think it’s still Greenfield, but that’s pretty exciting. I mean, the, the list goes on, like I said,

Trond Arne Undheim (36:51):
Before you move away, what is your thinking on Libra, on the Facebook project or, well, arguably not the Facebook project as they claim.

Toby Lewis (37:03):
So I mean, it’s a fascinating group, so yeah, obviously it’s sort of, Facebook has built an arms length association around it and, and tried to distance themselves a bit, just to, just to, for the exact reasons we were talking about mascot. Yeah. If that building of the consortium to get people onto a trusted reason, as well as the regulatory issues that they faced and even Donald Trump weighed into that as he likes to seem to do on business a bit. But the, the the yeah, it’s, I think as ever with these initiatives, it’s fantastic that a big group wants to go out there and really shake things up. I think that if you look at payments on Facebook, many of your viewers have been to China that you’ve got relatively sophisticated and seamless interface with Audi pay and we pay and, and these kinds of things.

Toby Lewis (38:14):
So in some ways, the West because of regulation has tried to segregate and make that more difficult. I think Facebook with Libra has really, really challenged the establishment in, in their country and around the world. It’s going to be a very interesting watch. I think it’s hard to bat against a tech John. I just think that they’re the major problem with Facebook is that brand took such a hit around the Cambridge Analytica scandal that people are getting well, firstly, you’re taking data and now you want financial transactions. And given that you weren’t a great custodian of people’s data, why should they be trusted? I think there’s a, there’s a degree of people not wanting to give Facebook that benefit of that, but I think longer term, they’re going to try and build the bridges to surmount that. And a lot of very smart people working on that project that we’ve dealt with.

Trond Arne Undheim (39:22):
Cool. Any other sort of smaller startups than Facebook, which is a big tech at this point, working on these problems that you’d like to highlight?

Toby Lewis (39:31):
There’s a, there’s, there’s a lot of little businesses that figuring out for instance a a group, the, I know fairly well called Hedera. It’s more, they’ve been doing a lot of the building blocks, so they got very involved in the architecture of various different companies like Hyperledger fabric and building the layers of, of some, some great sort of infrastructure plays to be sold into the corporation. What they’ve done on a, they built an open source data sharing tool that I think is really cool. With a company called Mipasa, which has been a spinoff of theirs. And they, they are effectively doing data sharing of allowing cross collaboration and all the different universities and research institutes on COVID-19 data and then finding cool ways to stat store that and share that.

Toby Lewis (40:44):
And they get people Stanford, MIT, UCL some Israeli universities, I think, collaborating on these challenges as well as IBM and a whole group of others, so that they built a really nice clean blockchain architecture, that sort of research as a tackling, one of the world’s biggest problems on and they’ve, they’ve spun it off and that they’re still very much a scrappy group of Israeli programmers. So there’s any number of small, interesting actors. And then there’s very, very cool advances and trick photography. A good friend is doing something with actually the fairy and foundation. So this is more like the startup blockchain and has been they been doing very, very well championed by Vitalik Buterin is the founder of a Ethereum. And that’s been really interesting cause they’d been trying to crack, I don’t know if you know much about the zero knowledge proofs, but they’ve been tracking how you can share information in a private way in, in, and seem to be making enough progress that, that sort of, they’re getting a lot of public statements from a farrier,

Trond Arne Undheim (42:06):
The benefit of, of people who may not be into zero knowledge proof, what does that mean? What is that term?

Toby Lewis (42:13):
So a there a knowledge proof is a way for different actors in a data transaction to share that information in a way that neither would know who the other constituent is. So it allows the information to effectively pass through a a black hole where there’s zero knowledge of who the constituents are. Information is hidden to the outside world as well, and the transaction is made. So it’s a very, it’s very much the frontier of cryptography. And I think it was the it was a major issue that happened in the, so the evolution of these public book chains is that basically the founder of this one Astec protocol, was essentially trying to create a transaction platform to allow sort of banks to make transactions and loans using a blockchain backend. They realized that if people knew who the other actors were, and that was becoming obvious in a public space, that would be terrible because people can do trades and tiny finger against them. So I think it’s really, really exciting. It’s going to get quite controversial as well, because when you’re talking about hiding financial transactions in ways that can’t be seen by people, you can imagine the reaction of regulator going well, there’s this thing, and it’s impossible to monitor and it’s happening

Regulating blockchain

Trond Arne Undheim (43:43):
On that for a second. I think regulators also have misunderstood a little bit because there’s actually a lot of things you can monitor, Right? So arguably, blockchain is both, it is this immense transparency combined with some amount of secrecy, which, you know, they are the founders of the protocols where argue that’s essential, but of course that is worrying some regulators. How do you see this argument on transparency of blockchains playing out? Do they need to be tweaks for various government? And does it depend, I mean, is the EU more comfortable with blockchains than the U S the China seems to just somehow accept that, that it, you know, it is there, but, but obviously, you know, China has, has going to have, they’re very strong arm around this, no matter how this happens, arguably though, you know, this is a kind of technology that cannot be controlled in that same way, but, but, but of course, regulators can set frameworks around which these technologies must operate. How do you see the transparency argument in blockchain playing out in the years ahead in government?

Toby Lewis (44:53):
Yeah. It’s going to be really fascinating how it plays out. And so the, the the dynamics are I think the regulators, I think you’re, you’re completely right. China in many ways has been fairly open door. They do shift, they sometimes sort of ban various things and,

Trond Arne Undheim (45:16):
Oh, don’t, they, they play kind of, we’re open for innovation and then they kind of crack down on the other side.

Toby Lewis (45:23):
Yeah. But I think that’s just the way how you govern in China. Right. They just go look enough’s enough. And, but they do. I think they are very much doubling down and I do think it is a cause for concern, generally the Chinese are so sort of allow a bit of an innovation free for all and then know how to govern inside that country in a very, authoritarian way. So they can, they can sort of play that, play things that way. The Europeans, I think again, Europe can be quite proud, it’s typically a middle way between those different sort of things. And I would say like the us regulator on the so many different regulatory bodies I don’t think anyone you’re not going to get many champions other than Luddites for the way some of the American regulators behave, because I think they really

Trond Arne Undheim (46:26):
Interesting Toby you’re talking about the world’s biggest economy, at least pre COVID. There are some quibbles to be had about that post COVID. I think, you know, whenever that’s gonna emerge, but, but isn’t that a big problem that arguably the biggest thing that’s happened to finance and, and as we have just talked about over a few minutes here, it’s maybe one of the biggest things to happen to the overall economy that the U S is not a leader in this area and really has very little chance of being so without changing very fundamental ways about how they, how they govern must be a problem. I mean, not just for, for looking at the blockchain industry, but basically it must be a problem for them.

Toby Lewis (47:04):
Yeah. I think, I think it’s very much there’s generally. Yeah, I think, I think is it is the major concern is, is that the, there is a, there’s been a stifling in the U S for about at least the last 10 years over gradual gradual period in, and it’s pretty extraordinary as like the, the U S venture capital and tech ecosystem has been second to none. And I think that the, the missing the beat and blockchain, like they missed in other industries, like the solar industry or various areas where they’ve suddenly been out competed by China and partly state-wise, I think it was very much just the state being doubling down on the solar industry 10, 15 years ago. And I think you could see the analogy with block chain is China has really, really been providing an open free-for-all experimental lab. I think they’re doing the same in AI as well. That, yeah, that, that will have repercussions, I think, over a 10, 15, 20 year time short.

Trond Arne Undheim (48:26):
I mean, you can’t lose, let’s just say, let’s just imagine that the green economy plus a AI plus blockchain is going to be a pretty major chunk of, you know, all the NASDAQ of the future. Let’s imagine a global NASDAQ, right. And if the U S is not dominating there, you’re kind of putting yourself at a play in, in the three major technologies that are reshaping the future. Not, not that they’re completely doing so, but, but there are, like you pointed out, there are some pretty serious regulatory constraints due to the way the system currently operates. And it’s not a short term thing. It’s, it’s happened gradually and over a decade, really now a hundred percent. So last thing for you, Toby, how to track all of this, because these are very complicated things. So we’re talking about reshaping, the finance industry. We’re talking about reshaping, the overall economy.

Trond Arne Undheim (49:23):
We’re talking about regulatory issues. I know that Novum Insights is clearly where you want people to go, and I will link that up because you are doing really good work on block chain information from the major players. What are some of the other sources that you go to even on a day to day, or when you look at this from a longterm perspective, what are the newsletters who are the influencers? We talked about some of the companies, but what are some of the sources you find the most useful in charting, FinTech, blockchain and the rest of it?

Toby Lewis (50:03):
So on FinTech, I think the Financial Times does a great newsletter called Sifted. So, so I really liked that for wider FinTech. They do chip in a bit on blockchain blockchain, financial times. It’s a sort of spin off from them. Fantastic. they’ve really made a lot of headway. There’s also a consultancy. That’s doing a lot with video and podcast content called 11 Fs who are very good on the fintechs. And they also do like a podcast called blockchain insider. They’re very good. There’s any number like the, the blockchain kind of spear is just a, I mean, it’s, it’s a phenomenal, so you could spend all day reading different bloggers and newsletters and things. I think some of the information has got slightly corrupted, but I think people have gone to a stance of beginning to reshape that. So the,

Trond Arne Undheim (51:21):
What do you mean by information being corrupted, Toby?

Toby Lewis (51:24):
Well, that was especially in the sort of 2017, 2018 period because crypto became very much a wild West industry. There was a lot of payments for articles where it wasn’t very clear that that the major outlets were allowing them to do that. And because they were new newsletters that were developing tens to hundreds of thousands of readers, like almost overnight, they just took the money and grew. And there were a lot,

Trond Arne Undheim (51:56):
You’re saying that journalistic integrity and quality of some of the stuff that they were publishing wasn’t commensurate with the fact that they were having hundreds of thousands of sort of listeners. They had an audience, but no verification, essentially. Are those still around those zines? Are they still online?

Toby Lewis (52:14):
Yeah, yeah. Yeah. So, I mean, I couldn’t go into which ones were there, but just the one caveat I would say is that a lot of those companies are still grappling with some of those tradeoffs that they’ve made. And it’s unclear if that’s been welded. And, but what I would say is let’s focus on the good ones for now get ourselves liab. Ilities. Some of the good ones are are complex, but but for example, some of the better ones are clean desk. I I’d say wood has become very strong at it sort of different coverage of, from the enterprise to the crypto layer. And there’s a number of others that are decrypt is another one. So that, there’s a, there’s an there’s a, and what is amazing is just the sort of medium blogs and wealth of information that’s being truly shared and get hubs are often open as well. So there’s, there’s a lot of people playing around and advancing things very, very quick. Got it.

Toby Lewis (53:26):
Well, fascinating Toby, this has been a very informative and I wish you best of luck with that report. That’s coming out. Hopefully we can time this episode. So the report and everything will be available. It was wonderful to speak with you. And please keep us up to date on what you’re up to. It’s a fascinating growing space. And I think still, perhaps unfortunately, not a subject that a lot of people, I mean, I talked to including a lot of my friends up until very recently. It wasn’t as if they really were able to explain, understand, or even see the full impact of blockchain. It’s one of those things like you pointed out once you start looking for it, it’s everywhere before you start looking for it. It’s like, when do I have to start caring about this? Really tell me, thank you very much. Have a wonderful day. And thanks for being on the show. Bye bye.

Outro (54:25):
You had just listened to episode 25 of the futurist podcast with host Trond Arne Undheim, futurist and author. The topic was the future of enterprise blockchain. Our guest was Toby Lewis, CEO and founder of Novum insights, the frontier tech monitoring company. We talked about the financial services industry in London right now, the influx of FinTech, and specifically about the enterprise blockchain and its impact on corporations and on the investment banks that serve them. My takeaway is that the financial industry, which has been slow to evolve has now finally taken on board the impact and potential of blockchain as the emerging platform for the future of finance and perhaps a major platform for business as such having said that it will stay to take this decade, to get all the findings and move beyond experimentation for it to reach its full potential. Thanks for listening. If you’d like to show subscribe at Futurized.co or in your preferred podcast player and rate us with five stars. Futurized– preparing you to deal with disruption.

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