Opening Keynote

Transcript

now um i'm excited to welcome our first keynote speaker frederick regard obviously everybody knows he's the ceo of the cardano foundation and you know we're very excited to have him because he's always a returning guest of the cvc whether it's a master class a keynote speech a presentation a workshop we love to have him back because there's so many changes every year and so many new innovations that's happening in the space and you know on the other end we really love the cardano foundation because they are an integral part of the cva and they are helping us

better and further the swiss blockchain and crypto ecosystem and it's really nice to have a long-standing relationship with them so without further ado fred the floor is yours [Applause] thank you very much everybody it's a pleasure to be here again um something extraordinary happened in the last couple of weeks most of us we got a little bit stressed the heart started pumping a little bit because we saw that crypto got stress test in a way we haven't seen for a couple of years and i think that is remarkable but what is even more remarkable and there i need your help a

little bit is we actually managed to go through on the other end what i mean about that is that we saw that the protocols and even some of the more established stable coins they actually passed through that stress test we saw billions flying out we saw a bank run on many things and we passed through it so what does that really prove well it does prove that what we've done here in crypto valley and around the world that passes not only the stress test but also passes the enterprise test so i would like all of you to turn right and clap the guy next to you or the shoulder next to you and say thank you very much because what you build is solid huh now that is super hard right because we're going into a bear market right

we're going into a crypto winter but think back right because what really happened was we were able to prove that that tangible apple can now move in a digital sense without us worrying about double spending without us worrying about the business attack you know we actually proved that we can transact without wall street that we can do a p2p transaction that we can do define we can do a lot of other things in crypto but what is even more extraordinary was the technology behind crypto actually matured in that aspect so the last couple of years this maturity has gone to a place where we can now finally say not only crypto is open for business but blockchain is open

for business but what is really needed now what is really needed now to go to the next level well it is that we need to start unlearning something we were all saying you know we need to move fast we need to break things but what's happening is that we are now breaking so many things that we are start losing trust when we start losing trust which is the fundamental currency of commerce which is the value proposition crypto really has is a difference in how you trust then we start losing gains therefore i would like to say we need to start doing something new we need to start move slower and start fixing

things but where is it we need to start fixing things and move slower so this is a battle space which i drew up to kind of talk about where is the next evolution of blockchain actually coming and i think the main part you need to understand here is that there is a value capture space on the top here and this is not just i mean this is a very cadano slide but it works exactly equal for nearly all layer one blockchains and that is that to get adoption to really get to a place where we where people use the blockchain and put essential value there put enterprise value there put processes there puts the lives of people there

we need to ensure that four things are happening first of all decentralized apps it works you just scratched the lady next to you or the gentleman next to his back it works right but what doesn't really what we haven't really seen yet is new innovation on the blockchain and now some of you are saying oh but we built the decks and we did certain things yeah but we we had exchanges before right we had currencies before we had p2p lending before right we had all of those things before but this really incremental new innovation where we see that the blockchain is being used to create something we haven't seen before like the uber of the blockchain we haven't seen that at scale yet

the legacy businesses right the ubs of the world the siemens of the worlds the abb that they actually start using the blockchain for what it was intended to do the decentralized database layer that they actually start trusting that it's the same transformation we went through when we came from a decentral from a centralized database we went to the cloud a lot of us we've been struggling a lot about explaining why you should go to the cloud now everybody is more or less cloud-based now we need to take the next step and that is going from cloud to blockchain and last but not least there is a lot of work in terms of consuming the blockchain most of us has been in discussions around well crypto you're circumventing regulation

you are hiding from somebody you're obfuscating something but in reality we are not right we're using actually something which is way more transparent than the existing systems of the world so there's a whole new business model which is not about actually transacting on the blockchain and storing on the blockchain is all about consuming the data which is available on the think about how bloomberg built an empire in the capital markets we are now seeing missouri and other players building an equal large empire and bridging that to traditional capital markets by consuming the blockchain so those four business models we actually only proven one of them and that's the depths right

now why is it so important that we started with the depths because if we can make crypto work we can make every industry work better the difference there is between a current operating model where you're having a product or service who connects to a centralized database that connecting to a blockchain based database is only one thing that is the financial services arm who is connected to that because by using a public permission as blockchain you need to interact with a token that's how you pay that's the software as a service if you really truly believe in decentralization

so to have those tokens well you interact with a new type of capital markets a type who sometimes move 40 in a day and that's not really something you want if you want to start using smart contracts or you start want to put meter data you start want to really scale this and use it for some of the problems we haven't started tackling but that's why we were celebrating in the start today we were celebrating because we know that we can solve that problem we know that this only difference which is how the financial services layer comes into the blockchain we already did that we proved that in the last three weeks so that's not the problem anymore i am a very large advocate for open

source i'm learning every single day so when you look down in the bottom at the base layer i think we need to really start looking at two things one is the actual and the other one is the code repository if you look into linux and the linux foundation and what they've been doing with that over 80 percent of the internet right now is running on open source software that most of the public commissioners software is actually available to read you can copy it and so on that's one thing but we need to start interacting with it we need to encourage companies to start adding and contributing to those code bases

it doesn't matter really if siemens or merck or another large company is using the blockchain as long as they're adding to the code repository because that does something magnificent it brings interoperability it brings standards think about how the new cloud standards are creating plug-and-play solutions for banks today which allows them to cut costs give access to data to the front-end staff and so forth it's the same interaction which is happening so what we have to do now is we have to say four business models one is done and dusted there's a lot of innovation that can happen there still right but the three others is what's going to put

and not just crypto but blockchain on the map and that's going to enhance crypto right in allowing them to earn money or to cut cost or to have more interactions with the clients will allow them to really truly see what the blockchain can be used for because a lot of people are still struggling to understand which use cases matters the other positive thing is if you actually think about it there's a whole legacy industry which only job today is to have a product or service who gives you know a company access to a centralized database or cloud-based database so every single one of these boxes here actually represent a billion dollar legacy industry

which we can convert to blockchain and to convert them to blockchain is not sufficient that we show them how crypto works because that's the risk mitigation we need to show them what is the value these value capture layer will bring them why is this that in the future there will only be two types of companies there will be a blockchain based company and a non-blockchain based company and if the trust layer really works which it does then the blockchain based company will win every single time which means that they have to go on the journey with everybody went through going to cloud anyway therefore working into every single one of these

boxes will allow them to understand how much revenue or how they can cut cost or how they can get more distribution will allow the value capture layer to grow even more which will create a downward pressure on actually ensuring that the code bases so the repos get stronger but also that the actual blockchains get stronger because the more interaction and the more businesses who puts business critical applications on a blockchain who actually works and is actually available all the time the better it is for everybody it will probably start a cascade so when we introduced psd2

in europe and partly also switzerland right we didn't really see any incremental innovation right the ability to kind of get access to some transaction data with the banks we saw you know a couple of fintechs playing around with it but we didn't really see what we expected to see but when we have the ability of actually managing an identification or an id or type of id we will also be able to open up the part where we can merge the data on a public blockchain with ids when we can merge those two things together that opens up for whole new use cases within hospitals health care providers and so forth when that happens open analytics the consuming the blockchain remember the

fourth business area that opens wide up right and that becomes a billion dollar industry which is just going to grow and compete with the existing database providers who's living in that kind of space when that opens up then suddenly we can use psd2 to something actually valuable which would be really nice which is going to put a pressure again on the banks of not competing to survive but actually earning more money because they can go back and do what they're supposed to do and that is to enhance the custody solutions and give real advice be there for the corporate clients and their individual clients when that's happening we can actually start thinking about open lending and open credit and credit scoring for the two billion people who is living out

there in the world today who don't have the luxury of an id they don't have the luxury of a birth certificate which means that they can't interact with the current banking landscape of today but it's not just the banking landscape right it's also the the government is about paying taxes it's about getting an insurance is about your farm is burning down and you know how do i get 200 to go you know to survive the next month without having my kids starving right all of that is a cascade who basically can end up in a kind of an open banking but not an open banking driven by psd2 but an open banking driven but we actually start using a public permissionless database to enable identities not just one identity to enable governance that people for the

first time have a choice of the infrastructure they can be a part of it they can show direction they can vote that's the choice not just about how we live and interact but it's going all the way down to the water quality it's all the way down to the base layer of where we are in the maslow pyramid there's three things we hear again and again and i'm not i'm just going to put it out there because it is solved right but i want to make it abdominally clear when we speak to governments regulators lately the european regulator from the european central bank and so forth all they speak about is blockchain is bad it uses too much energy that's a hoax okay

so there is blockchain solutions who don't use the same amount of energy the question is what are you storing and how valuable that is right so we do have proof of stake protocols to solve that problem they say negan checks the next thing we're talking about a lot is how can i actually calculate if i want to bring you know a million clients in my existing business model to the blockchain if i don't understand my cost structure there is blockchains out there today who have deterministic execution and deterministic fees so we can solve that and it's done and dusted as well right so i think all of us can understand now what is the value between having a marketplace who's bidding for it which

allows us to self-regulate and is really good for some use cases but we now also have blockchain to allows us to actually calculate what will it cost for actually using that in the next three to five years so it's solved as well now the part we're struggling a lot with is actually not the technology it's the understanding now education makes people independent it increases knowledge and it strengthens the mind and forms character but it also enables people to put their potential to optimum use i think most of the people in this room and most of the people in crypto valley are able to explain what yield farming means and they're able to explain you

know how we actually move from the real apple to the digital level but how many are actually able to explain when is it a financial contract is it legally binding what is the difference between slashing and not slashing in a proof of stake protocol why does it matter that ethereum is upgrading to proof of stake what is the best use case for blockchain let's be honest most of us can be struggling a bit with this and if we are struggling with it and we live in crypto and blockchain how do you think the rest of the world

is they're just reading weird newspaper articles about high volatility no solutions regulatory uncertainty so educating about blockchain educating what's happening below the value capture layer remember crypto actually lives in the value capture layer it doesn't live in the infrastructure layer that's the blockchain right so educating the regulators the policy makers the auditors the lawyers the business engineers the ceos will allow them to find the same passion we have in crypto valley around to get the same hope

that we actually for the first time have a technology which allows us to go beyond the daily fights the daily wars the food crisis you know the misinformation we have been fed every single day to actually come together in a set of base layers where your voice can be heard and we can solve real business problems and in an old world we can actually increase profits we can decrease cost and we can create more meaning for communities around the business you're building in the value capture layer but all of that comes from education so if i would leave you with two things today to think about is it was really good that we went fast and

we broke a lot of things to get to where crypto is today now let's stop up for a second be a little bit more slow and be a bit more careful because the next innovation is we're moving it in to the lives and the souls of a billion people and start using the blockchain and education will be the key not just for policy and regulators but also for the business people out there who still do not understand why i would use a and do the exercise later today and try and explain the next person you meet why does blockchain matter and if you can't do that then you know reach out to uh to the cadano folks or the other guys in the room right because let's find a way to do that for the different personas and

the different people a snapshot from the kerano blockchain we're kind of proud of that because a lot of people say yeah but you can't prove that blockchain is still rocking after we had the market adjustment well we can right so we're still opening about 2000 wallets on a daily basis even after we saw the huge adjustment right it's quite low but you know 42.5 million transactions is still on the same layer in the same level as ethereum does on a monthly basis right so and this is just us right there's other really great uh layer one protocols out there we have over five million native tokens out

there right um we see that ninety percent of all transactions on cardano people are willing to pay extra money to use the decentralized database to store metadata or to write smart contracts that means they're not just buying and selling ada they're actually putting something of business value in there that being said i think if you start your conversation with your neighbor or in the break or over the beer later today think about those five things you know which use cases outside crypto have a double spending problem which use cases

it's clearly showing a lack of transparency where is the lack of community involvement whereas data non-standardized or where is there a lack of data feedback loops you don't need to tick all of those boxes it's not necessary but if you just kind of think about one of those and think about a business you either have been working in or one of your vendors or you know one of your colleagues who works there you'll be surprised that this is some of the things we've been struggling with and throwing i.t at for about 50 years but for the first time we now have a massive upgraded version of that it's called blockchain and it's open for business thank you very much

anybody has them so uh for the live streaming i will try and say the question one more time so the question is how do we see or how do i see the the top smart contracting platforms uh i think it was cardano ethereum solana and will they fight about the same market or is are they actually complementary to each other i think that was the gist of the question so there is a huge difference in the three platform who was mentioned in

terms of the architecture and i think the one which most people understand is ethereum and it actually got to a really good level in terms of creating some standards for erc smart contracts now if you compare it to carano a bit with cadano you don't need to do a smart contract to do an nft so this is a massive difference right with cardano you actually don't need to do a smart contract to do a native token so a massive difference there now that can be both good and bad to be very exact and also the smart contracting language with cardano is extremely difficult compared to solidity so but in short i think what will happen is that

smart contracts will start competing with oracle ibm and other database providers in terms of reconciliation optimization and how you actually run processes so i don't think it's a competition among the platforms it might look like it at the moment but this is not what's going to happen what we're going to see is that the traditional players in this space here they all use these kind of tools they just don't use it on a blockchain so what we're going to see is we're going to see multiple versions of that and hopefully we get to a place where there's better security and more formal verification in them but we still have

the same adoption as we see on other platforms so it's it's not a competition i would say but but it does hurt sometimes when we you know another block is found in a smart contract and nobody has been able to validate that it hurts the trust layer but that's why we can be so proud because we you know crypto when you look at the balance sheet right now and just look at usdc and usdt and you add those together the exposure and treasury bills is so big that we can talk about a structure a structural exposure right so if those two stable coins would collapse we would actually see that in fact the the t bill market right and that's why people speak about regulations i do think it's going to go much wider

oh i got off the hook really easy today huh that's unusual we have a couple more minutes so you feel free to ask what you way to want what's the best way to load up my wallet if i want to avoid you know the costs so to speak or how can i just do it most anonymously oh so i'm not the right guy to speak about investing in carano i'm a utility banker right so i only look at one thing i look at how are you able to deploy ada on the blockchain to get the maximum utility and to do that

you need to be able to do three things you need to be able to deploy your data into a smart contract or into metadata if you can't do that you're actually not doing what it's intended to do the second thing is you need to be able to vote because if you're voting or staking you're actually participating either in the security of the network or you're also participating in the direction where we're going and you have the ability to to deploy the close to one billion dollars in our decentralized venture capital fund in there and the last thing you need to be able to do which probably is the hardest is you need to be able to um to protect your private keys and some people they feel fully comfortable

with a hardware wallet or with you know storing their keys themselves and other people would say oh when we get to a certain level i really would like to use a regulated custodian or a bank because you know actually i'm not in the business of trying to protect you know hundreds and thousands of worth of crypto tokens uh in my own house or in my own safe or what happened and so on right so that's the three things you need to look at from my point of view i know i have a great team here today and they can help you with you know talking about those three themes and also on cadano.org you have some good opportunities in terms of evaluation of what your options are but i think those three things is what you

need to to answer yeah york just jason uh and my question is so i'll try and repeat the question so the state of new york has just issued their intent to ban proof of work

jason is saying you know what about the trade-off between proof of work and the security that brings and proven over 10 years compared to proof of stake you know i think you cannot argue with with bitcoin right i mean sorry i mean it's been around for so long right now and it still has no hacks uh is solid and so on but what bitcoin really does is only one thing it allows you to represent one type of identity to represent one type of governance and to basically do one type of transaction and you can then argue that actually it's multiple type of transaction and there's a small scripting language but in essence what you can do is you can move money from a to b

and that can be done from one to many many to one many to many and you can use the scripting language to do some uh some some really good things around that how i look at it is i think blockchain is built for something much larger than that use case and as long as bitcoin really proves that this really works it's just an added tick on the box that we can design through game theory and through other means the same security or close to the same security as what we see with bitcoin but when you start moving into a situation where you're having multiple types of identity multiple types of governance and multiple types of transactions right it does open up more attack vectors and therefore i think it's important that

you're not only looking at the consensus algorithm about how the boss really decides what's a and b is but you also need to look at the network stack so the you know the predictability and resilience of the network stack and you need to look at the coding language it's really really important that you get that on top of it because one thing is being touring complete another thing is being able to verify what the code actually does and be able to understand that i think a lot of us would with the finance education we have we've been asking some questions around some of the algorithmic based stable coins you know because when you look at it it's quite clear what the attack vectors are right so i think we're at a stage right now to be very short with you if you combine the proof

of stake protocols together you see that we have more or less the same security if not better as proof of work the devil is in the details so the network stack matters and so does the coding language so the question is a large appreciation about talking about utility and blockchain and use cases outside crypto but where do you actually go to explore these use cases and to

understand what it can do that's something we're battling with every single day at the cardano foundation and i don't have a good answer what we're doing i can tell you our direction is that we're basically saying okay so if the crypto people they understand crypto we leave that a little bit in a bubble right now and then we look at what is the largest pressure we have right now and that is like json is saying is if you suddenly ban a utility token you can't use the blockchain how do we get to an understanding of a policy maker and a regulator that they understand what that is so we interact a lot with them and we're trying to understand what they need and they need two things so if you haven't read it yet there's a fantastic it's a small book or article which just

been updated which is called proof of work for policy makers it's available out there and it really talks about it teaches a lawyer or regulator proof of work we don't have that with proof of stake right now so we are we're going together quite a few players layer one protocols to try and write something similar up so really you need to teach on a certain level that you hit the person you're talking to the second part is on our developer portal we're trying to put more and more reference code and use cases in to explain what you can actually do with it the third thing is we are partnering with universities to ensure that when you go to a university and you take a cas or you take a master course in you don't only learn about proof of work

i mean proof of work is great don't get me wrong but if you are in the bitcoin scenario or the ethereum scenario where theorem is moving right but if you're in the bitcoin scenario you only learn about one use case and that doesn't get you anywhere so back to what i said about before you need to learn about there's multiple ways of of doing identity there's multiple ways of representing value there's multiple ways of representing governance so we need to get under the hood of the universities and become a part of the reference curriculum for the universities in proof of stake and last but not least we're quite small as a foundation but we're hoping that much more will start actually funding pushing working with the decentralized

treasuries around use cases which nobody thought was possible so how do you prove the art of the possible and put that back into a i put that back into a repo which is accessible for everybody including a business explanation of it so not just the code but a business explanation with a business architect a lawyer or ceo can understand that's our current track but i'll be very open to hear your ideas because i do think this is a very urgent topic thank you fred i am afraid as a keeper of the agenda i have to cut this short i know we could keep going but the cardinal team has a booth outside so make sure that it at coffee break and

lunchtime you stop by thank you so much we really appreciate it small token