Business Insider’s Sara Silverstein spoke with Jamie Smith, CEO of the Global Blockchain Business Council, at the World Economic Forum in Davos, Switzerland. Smith is also the co-chair of the WEF’s blockchain council. Following is a transcript of the video.
Sara Silverstein: So tell me what is the purpose of the Global Blockchain Business Council?
Jamie Smith: So the Global Blockchain Business Council is designed to specifically educate regulators on behalf of business so that they can understand what blockchain technology is and why they should care.
Silverstein: So if your job is explaining blockchain technology to people, I’m sure you have a very good quick explanation. Can you give us your primer?
Smith: Yeah, so I think that — when I think of what blockchain technology is, it’s a way for us to transact between each other and move assets around the world in a much more secure manner. Right now, you really can’t do it in an easy smooth way. And blockchain technology enables that. And the reason that that matters is that about 99% of people are using it right now to move money. But it doesn’t just have to be money. So when I think of blockchain technology, I think of it like a train track between you and me. And if you want to attach $1,000 to that and I send it to you, I can do that by attaching it to the car on top of the train track. And then I send it. That car is otherwise known as a digital token and the most famous one is a bitcoin. But there are other digital tokens. And so these tokens out there are getting a lot of attention, but the underlying rails that allow us to do this are really exciting, because it doesn’t just have to be money. It could be any asset. It could be music; it can be movies; it could be coffee; it could be, you know — Walmart’s using it to track meat in from China into the United States supply chain management. The possibilities are truly limitless. And I think it’s a real tool.
Silverstein: And so how tied is blockchain to cryptocurrency? Can blockchain exist without cryptocurrency?
Smith: It can. You don’t have to have a token on it. But I think it’s really important for your listeners to understand — as I kind of went through this evolution of understanding this myself — that if you’re comparing this to, kind of, the evolution of the internet you, kind of, want to think, “Ok, so where are we in comparison? What year is it about?” And I’ve yet to meet anybody who goes past about 1994. So we’re — Google’s not here yet, Facebook’s not here yet, you know, there’s still a lot of development. So who knows what the world will look like, but I think that the rails and the value on those rails — the tokens — that are allowing it to happen may start to separate a little bit. But both are really important pieces of this technology. And so it just — I think for our listeners who may be a little older than I am, it’s important to kind of step out of the box and think of things differently. For our listeners that are maybe younger than I am, this is what they’re expecting in the world.
Silverstein: And when the blockchain technology is a different kind of database; it’s a decentralized database; there’s a lot of people who have to hold a lot of information to keep track of everything that’s going on. So it can be clunky at times and it’s not perfect for everything.
Smith: It is not perfect for everything; it can be clunky. Again, it’s the early days, so I’m sure they’ll be great innovators who come up who make it a lot less clunky. The developers who are working on these technologies are truly remarkable. And so it’ll get faster. I mean we couldn’t have had a Facebook in 1994. We couldn’t have done a lot of things back then. So— but I do think that, you know, what makes me most excited — also makes me the most nervous — which is that there are limitless possibilities. But there’s also a lot of people out there who are kind of promising blockchain solutions for everything and in red and in purple. And you should be very wary of that. It is not a Panacea. It is a tool to address some very specific data integrity issues that all of us are facing. And some accessibility issues — being able to move assets and start businesses and all of those things. But it’s not going to solve every problem and there are some real questions. And, you know, I co-chair the World Economic Forum’s Blockchain Council actually. And we’ve been in the forum talking about not only the benefits, but, sort of, once you figure out why it’s so great, you have to work your way back and figure out where the problems could be.
Silverstein: And is there a good example of something that it’s not good for? Like a database where the centralized makes more sense?
Smith: Yeah, where a centralized database makes more sense
Silverstein: Or an alternative
Smith: I think my concern is less than — of the decentralization — because I think that’s generally where everyone in this going on the security side — is just whether nefarious actors use it for bad purposes. And so I think, you know, if you have a corrupt government that wants a secure immutable ledger that decides who’s good or who’s bad in your society, then maybe that’s not such a great attribute you know. Or if you want to put a land title record using blockchain technology, that’s great if your government is really interested in ensuring everybody has really clear land records. It’s not great if you want to use this moment to decide that your cousin gets all the land. So these are some of the things that we need to try and safeguard. And I think as international institutions, this is the moment to make really strong governance recommendations to potentially prevent some of the problems that we’ve seen through you know the establishment of the internet. The internet changed the world right in so many positive ways. But we cannot kid ourselves to believe that it made everything better.
Silverstein: And one of the original true believer — and that’s probably the wrong word —what are some of the people as blockchain grows up — and we try to figure out how it should be regulated to make it stronger — what are some of the things that some people get mad that it might be losing?
Smith: I don’t know that they would get mad about something might they be losing. I think they’d be fearful that people who are not educated are going to make decisions about the future of this technology. If you look back at every innovation that has come from the car to the radio, there have been unbelievably ridiculous laws that have been presented. And thankfully most of them didn’t actually become law. But proposals, you know, with the car, there was something like you had to — if you wanted to drive a car, you had to have somebody standing in front of the car holding a flag. Those were the kinds of things that people were thinking through. If you wanted to have a website, there was a law proposed that you needed to have a CB license. So there’s so many silly things. And I think that’s the biggest fear is that lawmakers, who are in a position to really influence the direction of this, will not actually fundamentally understand it and they will come up with rules that just don’t make any sense, because they’re not allowing themselves to think out of the box.That is what we are trying to do is just — let us just get in there and tell you what it is and then we can have a whole discussion about all the things you might want to do about it. But at least let us help you understand it.
Silverstein: And what do you think about these companies that are making pivots to blockchains like Kodak or Long Island blockchain company. And we’ve seen a lot of companies add blockchain to their release
Silverstein: Or to their name
Smith: Well Kodak’s doing real things. I don’t know about that Long Island company. But that is — I think the SEC has even come out and said, “we’re gonna do a little bit to stop these kinds of fraudulent offers of things that we’re not, you know, you can’t offer a product you don’t actually have.” But look, I think at this stage in the game, if you are a government institution, a corporation, and you are not in an R&D phase, conducting some type of pilot, it borders on malpractice. I really do. I would love to see the Trump Administration announce that every agency in the US government should be running a pilot. Also because there’s huge economic impacts to us being left behind. I don’t know that everybody in the US quite understands that there are a lot of people around the world who feel a little left behind by the first wave of the internet. And they see this as their real moment. And while we are a global institution, I’m still in an American and it concerns me how many regulators are just waking up to this idea. And meanwhile, there are a lot of places in the world that are off to the races. So it’s really critical on a number of levels that we, you know — everybody gets their act together.
Silverstein: And this organization’s a year old?
Smith: It’s just a year old. Well, it’s a year and a half old. The idea was started —believe it or not — on Sir Richard Branson’s Island. So there’s this blockchain summit with all these people who come together. And, you know, there’s organizations and events all over the world about this technology. But this one in particular I’m really proud of, because what we do is we bring about 50-to-60 people who are like-minded in that they’re not just about ‘what are we going to do tomorrow,’ but ‘what do we need to do ten years from now to advance this technology and think out of the box?’
And it became very clear that there isn’t — this just doesn’t exist. There isn’t a global entity that is driving this educational effort. And so we said, “well let’s create it.” And so about 60-to-70 people came together — all individual members — and put kind of their money and backing and time behind it and we launched it last year at Davos. We thought, “Well, we’ll just throw a little dinner.” And we thought maybe 40 people would show up. And we had standing room only at 100 people. So this year, we built out a big hub and we threw a bigger dinner. And it was again standing room only 200 people. I mean it’s — people want to hear about this. And I think it’s not just because we think it’s exciting, but I think the real reason people are drawn to this right now is because there aren’t that many solutions on the market right now and there’s a ton of problems. And so if this could potentially help solve one thing, people are going to show up and try to hear about it. And so yeah, we’re really proud. We are incorporated in Geneva. We’ve opened chapters all over the world — Shanghai, Beijing, Washington DC, and we have many more events and lots of cool things that we’re doing in the year to come.
Silverstein: And 20 years from now, where do you think the blockchain is and where do you think crypto is?
Smith: Yeah, that’s a great question. I think where my — in my evolution of learning about this, what I have come to understand is that I think the word blockchain will probably not be as understood. And that’s okay. I think we’ll probably — just like Intel inside — we’ll see we want to see like a little circle on the bottom that says, “secured by blockchain technology,” or something that allows you to know that your data has a higher level of integrity. Crypto, I think, is going to be out of — there’s going to be so many, so many options.
And I think from a regulatory perspective, we’ll probably see regulators step in and kind of make some determination about — to help consumers know which ones are suit anonymous which ones are totally anonymous, which ones have a record of being more safe than others. And there will be some standardization of that, I think. Not necessarily advocating, I’m just saying I think that that’s the direction we’re going in. But people will want a little bit more clarity about this kind of new avenue. But the most important thing is 20 years from now, maybe even just 10 years from now, it’s not just going to be about blockchain. And I think that’s why I want people to understand blockchain, because the actual real conversation needs to be the interplay between blockchain, AI, iot, Quantum drones — all of this. It’s not going to operate in a bubble, and you at least need to get the baseline of what blockchain is to understand how all these technologies are going to weave together.