Ethereum, privacy and Enterprise Blockchain Solutions

Transcript

in today okay so hello everybody good afternoon first of all apologies for not being there but due to travel ban from my company I cannot finally make the trip so well b-because I lost all the conference and all the interaction but it's okay so I'm going to share my screen with you yes I want to speak with you about very own

privacy the centralization and price blockchain solutions my name is Pedro look at the r'mante I work in Switzerland for which more international for those who doesn't know the company it's it's a luxury group focused mainly on watches but with some other businesses so probably you will be familiar with brands such as caffeine Blanc etc right and we started a while ago our blockchain journey so I'm going to share with you some of our experience how we tackled the different projects

the value which we started from from that and some questions that have come afterwards right but before that I want to speak first of all about the centralization probably the the is the biggest topic of blockchain the biggest impact is a new paradigm and we all need to learn how to what we did how to deal with it and in this case I think we sometimes we use the centralization to lightly some of the times we dozen we doesn't know what

it means and sometimes I'm especially in the enterprise world is not clear so so it's a kind of first topper for companies to get into into blockchain right so I want to start with this this is me like 43 years ago and I'm not showing this because I wanted to share with you how I was looking in 43 years ago right there's a story behind that picture a picture was taken by my uncle and he liked the Beast the pictures so much that he made a lot of copies like a

hundred copies of the picture and he gave copies to friends to family so for whatever reason that I don't know so why I was thinking about this I realized that there's potentially a lot of people that are in position of this very picture right if I'm telling you this I could state that I am decentralized right we can agree or not with these statements is just to show what I just talked about sometimes we might speak lightly or what or or we have different

levels of understanding of the centralization for me the questions are how much are we decentralized how much are we ready to share because at the end of the day the centralization means also sharing how can this be aligned with our right to privacy with usual privacy also sharing at the same time data and in the enterprise world how much harder prices adopting decentralized technologies right and basically I see a lot of initiatives a lot of experiments but it sounds to me like they are built in silos

they are just experiments isolated one from each other even within the same company and it reveals to me that one of the trends of the enterprise is that that we're afraid to lose control right so in that sense what was rich mode approach so R is more approach started two years ago we started at the beginning of 2018 with our blockchain journey which was probably at the beginning or right after the beginning of the big blockchain hype right and we

define three key points or values that we wanted to have very present and our goals doing all these experiments which is clearly had to be it was a learning experience we had to learn there were a lot of two years ago private versus public smart contracts if you other networks there was a lot of a lot of topics that we didn't understood so clearly we wanted to understand the technology I'm first and foremost how

can blockchain how good-looking advance our business to our customers it was a question we didn't know so we decided to go ahead with with some pilots and some studies right and we we divided the strategy into two we decided to go with b2b experience and to B to C so intercompany or targeted to clients right the two projects that we did with with companies

probably are the less known the lesser known the first was with our brand Cartier a project with V chain you probably already know they are based in Asia and the use case was around the omni-channel so it was a block chain network in order to ease the interaction with our retailers in in Asia so we were recording in the in the block chain the different transactions that business transactions that we were doing with our retailers there and it was a quite the pilot was quite a success right the other project relevant that we have done

is as Richmond level and it's about intellectual property so we did it with with technology called blocking your IP it's developed by a French elite and basically it allows to include to register in the blockchain documents with Jules we chose two registered designs right our designs for products are being registered in in Bitcoin by the way which is the underlying block a network of blocks in your IP so when when we work with with our brands when when they

issue designs they need to work with third parties in order to make prototypes or things like that so when we share documentation with with them we have immutable and trustful registry to prove that the original design is his ours belongs to us and was issued by by yes right so this pilot is still ongoing and we are having a good wrestle with with it and I moved to the b2c pilot which are probably a better known these b2c

pilots were clearly oriented to watch certificates we decided that we wanted to issue digital certificates for watches for many reasons right it was quite fast and straightforward we were getting some some fast benefit out of it and we were able to measure also things such as adoption so our first experience has been with our brand Baskin Crisanta and the French startup Ariana okay

in this regard the approach with them were where they were providing the technology and they will provide in also some know-how because they were already focused on the on the use case and we were able to contribute from a functional and business point of view also no technical we had some interactions and we discussed different different things so it has been a very nice experience working with them irony from a technical point of view again is based in Pio a network which is a chain

of aetherium so basically it follows all the theorem standards the different tokens and so on so we are using their ear c24 for the token part for the payment for the feminist services we are using ear c720 one for the non-fusible tokens to represent the digital certificate here's a 900 if I don't remember bad for the steak in so basically is almost it's right and it's a public chain and this is very interesting because it is not very usual for the moment to see

Enterprises going to public to public chains but it was part of our experience right to try to learn what was that and what does that was meaning we did another pilot with our brand Panerai the use case is similar while the song cost and time use case is focused on new watches basically a customer goes into the boutique gets any watch and instead of the traditional paper-based certificate they get the digital certificate with Panerai we decided to explore a slight variation of

the use case so the use case is basically rented to repairs existing watches it's embedded into a service called remaster service so anyone having a primary watch can go to a boutique and ask for this remastered service which consists on a full revision of the watch polishing surfaces etc and issue of the digital certificate right we did this project with Swisscom blockchain and we did it with hyper ledger fabric right so private blockchain consortium

approaching in both cases but it was interesting a very interesting experience one of the values that we have seen here is that surprisingly it doesn't matter if you go with public or with a private blockchain in the scope of a consortium at the end of the day you are going to have different peers different entities and different players trying to access to accessing or with access to the ledger as each one is going to run in the construction mode each one is going to run at least a node right so the another day you try to minimize the amount of data you are putting in the in the

blockchain which is a it's a good practice but it's also something that its inherent to both situations right so the end of the day we don't see a lot of advantage from a privacy or from even from from a data design point of view we don't see a lot of changes a lot of difference between the two approach because both approach takes you in a very organic way to the same to the same to the same place right some other interesting value that we have seen is with iron constantan and V&E for example

the the user experience is very simple basically one downloads the application to to the mobile phone right and that when the app is installed it generates a keeper which is going to represent the user's identity in the blockchain right and then the certificate allows the certificate allows being transferred so once is issued by by the company it's transferred the just by scanning a QR code to the first customer and then this customer has a lot of services around like for example transfer the ownership to another person request the service it has all the documentation there but one

key point is that users they are not required to share data personal data the only identifiers in the in the network is basically the keeper generated during the app installation and this is very interesting because it allows the customer to own their own data but at the same time it's it's also possible for us notifications to the certificate owner it opens a new a new palette of services right so well this is how the the different services so as I've discussed

this were the goals of our of our especially for b2c projects first of all detailed certificate allows us to fight again counter fades and gray market these have been explained several times and always people say ok but how do you link the the watch to the to the blockchain for the moment we are using the serial number combination of different numbers but there is no hard link there is nothing preventing someone to copy the serial number make a fake of the watch and sell it in this world but it's true that with the time and with

education if this is not improved at least with the time and with education the customers will be able to check will know about the certificate and will be able to check the certificate so basically our point of view is that we're trying to close the gap we have done a lot of research on the digital twin and the link to the physical the physical good and for the moment there's no technology that allows us 100% to link the physical good digital pin we will see and then as I've explained privacy and data ownership right in our case also all these projects have been

driven by innovation but our innovation team with a contribution of good technology and the different teams and branch it has been also a very nice experiment in terms of enterprise work collaboration mix inside the inside the company right some of some of the the things that have seen also with with this experience is adoption right incentives so the customers receive very well the certificate but after they receive the certificates is okay so what right so for adoptions not only on our on our

case but probably in general there's still the need of different elements in order to allow that there's a still a lot of lack of knowledge in the in the public a lot of people associates still blockchain with cryptocurrency but we need the regulations we need the standards we need the networks to be [Music] interoperable right so usability for example in our case when we started to look for for companies to collaborate with we saw that there were a lot of people doing the same use case for the

Beatle certificate for the watch but each one of them was doing that in in an independent way it was redundant work so we saw that and we know that in the market there are other solutions but they are not compatible between each others and most importantly they are not supported by regulations right and and we think this is a this is a stopper for for blockchain to be adopted and one of the key points is our standards we use the standards every everyday standards are everywhere and there is a lot of our daily tasks right so we you should stand

out like metrics to measure things too much weight money etc mathematics even if we think something more mundane like food for example what we ate for breakfast could be considered as a standard based on where we are coming from or our goal our goals our health etc right and for the enterprise world standards enables us to focus in what we need to deliver know how to do it so they are very very important and I'm talking about the standards what I'm recommending first this book that I'm

reading at the moment which speaks about mathematics which is a very nice one and it's related to a standards they are everywhere in our case we have defined the etherium as our standard and I think this is a very important value for the enterprise because we have seen that the trend since since the blockchain hype started the the trends in the in the enterprise adoption was basically going towards private blockchain right and we believe that if a room is is the network providing the most value right it's providing the most value and it's

probably the best experiments also related to the centralization right and it Hallows companies to really focus on the delivery but also to understand the decentralisation and one interesting something about that is the new dream 2.0 validation by the later economics scheme right so I don't want to speak out what aetherium 2.0 is meters and I I know that there are a lot of all the talks speaking specifically about that but I just want to focus in the validator economics the scheme right so basically anyone can become a validator

just by the piscine a minimum of 32 either on a contract on aetherium 1.0 right so if I have 32 either I can start becoming a I can start validating and I have some requirements and that requirements are proportional to the the stake I'm putting into a theory if instead of 32 I have 30 mm method I can validate more I can have more earnings but I have bigger obligations and I like so the benefits are correlated to the obligations it gives access to everyone and to anyone at this ensures that any validator no matter how

small they are can get rewards right and I think this is a very important example of decentralization right it's really tackling the problem from a very interesting point of view and and for companies we are clear we can clearly look at these and take some lessons about how to proceed with the centralization is normal that we have concern and fears and when one needs to introduce the the centralization contact into the company its is not a

straightforward right there there are always questions always but how are we going to share the information I am losing control right so I want to focus to the last part of of the talk in this contact is in the centralization and what can be important for for enterprise I want to go back to this sample and I want to argue a bit about that so I said before that I am is this true is this really true because I could argue about to and make a lot of

different questions right for example I could say okay this happened 43 years ago it was paper support how many of that of those pictures are left right and geographically how far they were distributed right so clearly even if I was at some point very decentralized probably those pictures are gone my decentralisation level reads big and then it went down right so I don't think I am that decentralized and it's a bit the the concept that interests me from

enterprise and corporation point of view right I want to know from an enterprise point of view the degree of the centralization that the networks and the tools that I'm using really have and this with this sample I want to argue so the centralization can be switched off very easily we go back to the traditional centralized database model that's it it's just the flick of a switch but it cannot be switched on that fast it's not really abuse it's a slow and tedious process and the best sample is the the rate of reduction of blockchain technologies since since bitcoin was was

released it has it took several years until 2014 2015 to start having some some momentum and and companies starting looking into into that so it requires a lot of time a lot of setup and a lot of consensus over a big number of points and we probably can agree on the fact that there are different level of temp transitions depending on the blockchain networks we are looking at right my first experience with that was this website which is now defunct defunct it's dead are we decentralize yet I

don't know if everybody knows about this but I took this screenshot when it was still alive yet it was built by a guy called Jackson Palmer and it's it's a first a nice attempt to show a bit how much are we decentralized how much the different map works are decentralized right so it was showing the different parameters of blockchain networks comparing them the consensus protocol if the network was provided incentives etc etc etc it was a nice analysis I would say quite incomplete but a first step on

a direction that I think is very important and probably the the way to go right so in the case of of an enterprise we find ourselves in a new paradigm based on communities from an individual point of view it's much easier to adopt I can buy a Bitcoin and I can pay with Bitcoin with three-room I can invest in different in different cryptocurrencies from a company point of view these contacts are not easy to swallow so privacy how come is that I can put customer data or customer related data into apply between to a private public

blockchain right transparency transparency is a requirement and everybody is going there but its inherent to a public blockchain network and this is good but it's something that companies are adopting slowly we we all see the need but we want to do it in a also in a in a reliable way and then control I think this is the point that is the most hardest to give up because from a centralized point of view we need to give up a bit of control but one of the experience that we we got from from

our projects and pilots that is that it has been easier and more straightforward to us to work with public blockchain that with with private so when you understand the what it means to give up a bit of control is not that hard but all these challenges together points two companies need to trust in the centralized system where they don't have full control anymore right and this can lead to - fear is human to feel fear on the on the changes right when you need to change the specially

when you are going to give up control is quite human and well as everybody knows fear is the path to the dark side right feels least one girl and hate and so on and so on so in her case I'm in the real world I'm fear in my opinion leads to lack of adoption right and we need to tackle that so privacy does not mean opacity but you choose when and what to share control does not mean to own everything but to give ownership of the information to its rightful owner as we have done right and transparent system is masked

today so how to measure the level of the decentralization level of a system there are clear metrics like the number of nodes like like the number of validators like the average number of validators active per day or per hour the network usage etc but there are metrics that are not that clear or that even hidden right for example the physical the geolocation of the different of the different nodes right the ownership what are the actors behind those nodes are aardeen are the

nodes being concentrated around the umbrella companies that are running that processing hubs as we all know how much it's impacting the cloud platforms which are running a big portion of the nodes in between and uh aetherium there are things that we need to tackle in order to to really make sure the decentralization degree of a system there is a very nice article for those who wants to search a bit written by by experts in consensus about how to measure the centralization of a

system in someone want to want to go with it I really recommend to google it and to read it because it just speaks a bit about all these things and if you have not thought about that yet it's a good eye opener right in my case I want to finish by laying out a concept of of blockchain integrity factor right and this factor would be would be measuring that the centralization level of blockchain platforms why integrity integrity of course is linked to honesty and transparency right so trust you

trust in someone but this is more towards consistency robustness and reliability and also transparency right I really want to know that the blockchain I'm using to put my company data or to record my transactions with all the companies or with my customers they really match a minimum level right the way it is is a composite index taking into account different different measures absolute and relative metrics but it should be easy to check right it should be easy to check it should be giving information about all the actors

that intervene in the blockchain network and it should be also valuable for the actors that are using it and it should be also important for the two levels of blockchain usage which is intercompany and which is the social part as well right so well that's it thank you very much have any questions I'll be happy to answer yes and over

[Music] and thanks and the what one of them the one of the limiting factors that we found was that running the fabric network was a lot more expensive in terms of infrastructure and see when we were running on on the Tea Room and the other one was like in the consortium sometimes well depending on the use case sometimes it's hard to convince the partners that well you need to run a

note if you're in high plateau fabric or if you because traditionally they haven't done this right so it's an extra cost on their side so what we did was we decided to run the note for them but then that's actually as extra cost for us and the solution is centralized essentially in this case so so it was hard then to move from a central solution to a decentralized solution without solid solve an incentive for the partners to also run it so on the panel I use case how did you how did you guys move forward with fabric who are your partners that were running the notes or were you running the notes internally in

your company for the for your partners yes the the same actually on both cases but I first thank you for your question I think is very interesting and I totally agree on your point of view running a private blog network it's more expensive than than a public one in as I said in both cases the approach was the same so from from from doing a POC we didn't run anything right because we just wanted to see the the benefit how the solution was working we wanted to explore a bit when we have moved from from POC to pilot and we're in the process

to extend that by by the way we have decided to run an ode in both cases both in ecology fabric because it's a must or and also in the case of REM e in the case of a private blockchain I think it's a must because otherwise you don't have control over your data it's it's basically inherent to what blockchain means so even if it's private and probably police will say okay if fabric is not a blockchain is a deal type fine I buy that but still the concept is the same and you need to make the commitment you are showing with that network is by running the the node and it also gives you the possibility to check the

activity to ensure that the activity on the blockchain is truthful right and in the case of the public blockchain my opinion is is the same one should run a node in order to first express commitment with with the network and also ensure that the activity of the network it happens according to the rules right this is both it's a two-way street - just to say to say so so this is a bit my my point of view on the topic thank you well thank you very much thank you

everyone because you're a good day and thank you for for your time