Unchained - How To Explain Cryptocurrencies And Blockchains To The Average Person

Episode Date: October 3, 2017

Love Unchained? Please take this extremely brief survey to help us obtain more sponsors: https://survey.libsyn.com/unchained Tired of having your friends and family say cryptocurrencies are a Ponzi scheme, nothing backs them, they're in a bubble and only criminals use them? In this episode, Amanda Gutterman, chief marketing officer of ConsenSys, and Jamie Smith, global chief communications officer of Bitfury, tackle every common misconception of Bitcoin, Ethereum and cryptocurrencies. This is an episode you'll want your friends and family to listen to. Plus: Gutterman and Smith talk about how they did the seemingly impossible: create gender-balanced crypto conferences. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, the podcast where we hear from innovators, pioneers, and thought leaders in the worlds of blockchain and cryptocurrency. I'm your host, Laura Shin, a senior editor at Forbes covering all things crypto. If you've been enjoying this podcast, please help get the word out about the show. Share it on Facebook, Twitter, on your secret Slack and telegram channels. And if you have a chance, give the show a rating or review on iTunes or wherever you listen to your podcasts. And don't forget, you can, you can always tweet at me to let me know who you'd like to hear from in a future episode. My Twitter handle is Laura Shin. This week's episode is brought to you by OnRamp. Your branding and website are the first things your users will see. And in the current Wild West of ICOs and blockchain startups, you'll need to stand out from the pack. OnRamp is a full service creative and design agency that will help amplify your brand with the perfect website, logo, collateral, or custom design project. Get big results in no time by visiting ThinkOnRamp.com. The topic of today's episode is how the hell do we explain blockchains and cryptocurrencies to other people.

My guest today are Jamie Smith, Global Chief Communications Officer of Bitfury and CEO of the Global Blockchain Business Council and Amanda Gutterman, chief marketing officer at Consensus Systems. Welcome, Jamie and Amanda. Thank you for having me. Hi, great to be here. Thanks for having me. So, Jamie, let's start with you. How did you get into Bitcoin and what do you do at Bitfury? Well, how much time do you have? So I was actually, you know, I used to work at the White House and in politics and government.

And after I left my last post as Deputy White House Press Secretary, I went to a big PR firm and I was enjoying my life. And my largest client actually at the time was Western Union. And so I was aware of Bitcoin a little bit, but not too, too much. And I was, frankly, home with my 10-day-old baby on maternity leave when a friend of mine who I worked with at the White House is now at MIT. His name's Brian Ford called me and said, hey, I think you should quit your super safe job and go work at this tech startup on Bitcoin and blockchain. I think I said to him that he was crazy and there was no way that I would ever do that. But I ended up, I actually, I think my words were, that's criminal money. I want nothing to do with that. Are you crazy? So I actually, what I ended up doing was because I was a maternity leave, not that you have a lot of time, but you do have time to read. And I kept, I couldn't put it down. I would look. I would read. I would put it away. And then I kept going back to the next article and the next article and the next article. And once I really understood it, which frankly took me a long time, I sort of went through the arc of what I think a lot of other people go through of first thinking that it's something bad and nefarious and then understanding the security and then understanding the potential from a financial standpoint. And then the beyond finance piece was mind-blowing. And then I was hooked, and I left my super safe job and joined this crazy startup.

And that was two years ago. And I have no regrets. So I oversee all communications, strategic communications for Bitfiry, which is the world's largest and leading full-service blockchain technology company. And then I oversee this new organization we started with a number of other people about a year ago called the Global Blockchain Business Council, which lobbies businesses and regulators on understanding the technology better. Oh, gosh. Oh, I love your first reaction, especially because of the topic of today's show. But before we get into all that, let's turn to Amanda. So how about you? How did you get

into the space and what do you do at consensus? Sure. So I started out in the more pure media and marketing world. I worked for the Huffington Post, working specifically on the blog platform there. I ended up leaving and starting a platform called Slant. That was a media company. And what we did was we allowed any journalist to create a piece of content, publish it on our platform. We would optimize it to get traffic. We would serve advertisements across it. And we would give the creator a percent of the revenue brought in from the advertising dollars. So the way that we'd structured our business model, we ended up handling a huge volume of micropayments. Because of course, not every story on the web gets a ton of traffic. It's all over the map. So I encountered blockchain

technology. I knew about Bitcoin. I'd read about it, but I really encountered it for the first time as a solution to the specific problem that we were having, which was processing fees. I got really excited about decentralized peer-to-peer payment mechanisms and got really excited about all of the different business models that they would open up in the media industry. Then I learned about Ethereum and realized that the scope of my thinking was so narrow in the context of all of the different use cases of Ethereum. And I got so excited. I ended up joining Consensus a little bit over a year ago as chief marketing officer at the time. Consensus, which is the largest global blockchain venture studio, which is doing a huge amount to build applications on top of Ethereum and expand the Ethereum. Ethereum community worldwide. At the time, it was a very engineer-led organization. It still is,

and we're very proud of that. But there wasn't really anyone building a team around telling the story of Ethereum and blockchain to the world. And so I stepped into some of those functions at Consensus. We now have a marketing team that's going to be about 15 people by the end of November. So our functions range from PR to creating a huge amount of content, educational content, about blockchain, about Ethereum, about decentralized applications or DAPs, and running all of our growth and analytics and our community. So that means a lot of events and conferences and meetups to try to introduce these concepts to the wider public.

Okay, yeah, and one of them includes Ethereum, which I do want to talk about later. and also Jamie runs another conference, the blockchain summit, which we're going to talk about both of those later. But first, let's dive into the main topic for today. So I wanted to do a podcast on this subject for a few reasons. One is that I feel like so much of the media attention around cryptocurrencies centers are on price. And that's definitely something that's kind of interesting to watch. But I also think people sometimes focus on it so much and forget that the real reason that crypto assets have any value at all, is because the technology represents a real breakthrough. And the second reason I wanted to go into it is just because this technology can be so difficult to wrap your head around that when you try to explain it to other people, they often don't

really get it. And so I wanted to dive into how it is that you guys, with your non-technical backgrounds, came to understand the technology. So I have spent the last 20 years of my life trying to take complicated. issues and make them make sense to my family. And that's kind of how I think of my job. I also used to describe to my grandfather that my job is to make challenging things easier and to either get you in the news or out of it. So that is that is kind of how I define my existence. And so when I came across this technology, I really had a hard time. I mean, it's not easy to explain this. And I

had to really explain it to myself. I think first I got very in the weeds of trying to understand how it all works technically, which I think is critical. But then I sort of looped back to taking on the big picture from 50,000 feet. And where I, I kind of started in a place, or ended in a place that I think is important for your listeners. Essentially, what we're going to have in the years to come is I believe there will be global Wi-Fi. I think that almost everyone in the world will have the ability to have access to and or own their own phone. And so with those two components, now you have basically a system that allows people to move money or any asset that they want peer to peer to peer for almost free anywhere in the world. And that is a big game changer.

So I really encourage people to kind of start big and think about it and then drill down deeper and deeper and decide how much more you want to know. So that is kind of the basics of what this is. sometimes I call it a global notary because I think that that's essentially what we're talking about. It's the ability to move all of these assets around the world in a secure way. But for me, the biggest issue was understanding the security. And once you really get that, I think that it's really clear how much more this technology can offer the world and how globe changing it can really be. And what resources were you reading to try to understand the technology? and some of the other concepts?

You know, to be frank, not that many. That's not true. I tried to read a lot of them, but I found them all really not helpful. And I remember saying to my husband at the time, well, I think I might do this. I think I might actually jump off this bridge and take this crazy job. And one of the reasons that I want to do it is because there is clearly a very strong need for communicators to get in the space and make some really edible content. And what I mean by that is just how do you take all this?

and really understand it in a short, quick way. And so, you know, I read and read and read, and it actually made it more complicated for me. So I ended up just talking to people. And the more I talked to people, the better off I was. And I continue that to this day. This is a very, it's been two years, but it's a robust process of going around the world

and hearing how other people describe this. The best way that I've been able to explain it, and I base this on sort of an informal focus grouping of these efforts, is that I think of the blockchain like a train track between me and another person or you and another person. And essentially, there's a car on top of that train track. And that car is just a digital token. And what people are doing is they're attaching something to that digital token. And in this case, in most cases at this point in this technology, it's money.

And when they attach the money to that digital token, they move that token across the, you know, cybersphere. and they send it to another person. And when they do that, that transfer gets tracked in this notary. And that notary is the blockchain. And so when I think of the digital token, a digital token is a cryptocurrency. It's a Bitcoin. It's an ether. It's whatever token you want to use. But it's just that simple.

And then what's blowing everybody's mind is that, of course, just doesn't have to be money. It can be any asset. And so hopefully that is helpful to people. I think that they can at least wrap their heads around that kind of imagery. and understand and understand where this is going and why it matters so much. And Amanda, how about you? How did you start to figure out what the technology was about? Sure.

So my approach really came through the software side, not the cryptocurrency side, because I started by getting really excited about the applications of Ethereum for the media industry. And on Ethereum, the relation between the cryptocurrency and the blockchain is a little bit different. So the cryptocurrency serves as a fuel to actually allow the public mainnet to exist and to keep working. And one really simple comparison that I've made before, because sometimes I've been asked to explain blockchain as though I were speaking to a four-year-old, which I can't quite do yet, but is just the comparison to a computer. So if you have a bunch of tabs open on your computer, eventually if you keep on opening tabs and opening tabs, your computer is going to slow down and not work.

And in a similar way, ether exists as an economic disincentive for overuse of the public Ethereum commons. So without having a currency attached to the functionality of the blockchain, which is the big thing with Ethereum, that it can do all of these really exciting things and has all these amazing software applications. you need this kind of gas or fuel to actually be able to use it. And that itself is a pretty good metaphor that you would have to actually power your applications with some kind of, with some kind of fuel. And that fuel is ether. How do you guys begin to explain cryptocurrency to people? I asked some of my Twitter followers about this, and they told me all of their family and friends are saying things to them like, how can it be money? There's nothing backing it. how can it be real? So how do you explain kind of like what it is and then also how it can have any

value? Sure. I'll just take a quick crack, which is, you know, monetary theorists have come up with a few specifications for what makes a currency. Those properties are usually scarcity. So the actual number of the objects being used as a currency. Fungability, which means your ability to exchange them. Devisibility, so you can divide them into smaller parts. Durability, so they can actually survive time and weather conditions and transferability, which is the obviously ability to move them between owners. And throughout time, human beings have used all kinds of objects as currencies. Some of them are rank really highly in terms of those properties, and some of them don't. You know, some of them are decaying. Some of these properties play into the reasons people

decided to begin using gold, which also doesn't have any inherent value. It gains value from human beings deciding it does and the fact that it has some of these properties. And in a similar way, and for me, actually, Nathaniel Popper's digital gold was a great resource to learn about cryptocurrency and the space in general, even though it did come out before Ethereum and is mostly about the origins of Bitcoin. It's a really good intro to how we moved from thinking about gold to thinking about cryptocurrency and the kind of monetary theoretic basis for why this should and needs to exist and qualifies as a currency by the standards that monetary theorists have held it to. And Jamie, what about you? What do you say when people ask you how?

Like I said, I love learning from everybody I hear from. So I spent a lot of time talking to government officials and people and CTOs and people who are in positions of trying to decide whether they should go from the situation that they're in, which is moderately okay with pretty high levels of cybersecurity, to something that we believe is much more secure for data integrity. Because at the end of the day, that's to me the biggest value of this technology from off the bat, right? To me, it's like the first door you have to walk through is understanding the pieces of the cyber security offerings. And so what I think is fascinating is that, you know, there's always the chart that shows how Bitcoin is going up, up, up, Ethereum, et cetera. When I look at, don't just take the Bitcoin piece because I'm much more expert on that, the increase in value of Bitcoin to me is actually really reflective of an increase in people's understanding and value of the security that it offers. The more that you believe that this product, as Amanda was saying about gold, the more you believe this product has value, the higher the price

goes, right? That's the same with gold. It's the same with basically cyber gold, which, you know, in most of the world, cyber gold is cybersecurity. Everybody in the world is trying to figure out the best way to keep data secure. And not to, you know, go off on a tangent, but essentially, and I do, I spend a lot of time explaining this, this evolution, that in the 90s and 80s, when the internet was created, it was created to move information, and it did that and changed the whole world, but that information had to be stored somewhere. And when it was stored in various places, it was stored in these silos that keep data. And we're pretty much still in that situation.

And so what these geniuses in 2008, 2009 came up with was essentially just a very simple concept of taking all that data and breaking it into a zillion pieces so that you don't just, you can't just break into one house, you have to break into an entire town. And you have to do it with all the same keys and all the, you know, and there's so many different factors. And so that distributed ledger, that distributed technology is what keeps it and makes it so secure and so promising and so different from the current cyber situation that we're in today. So I think that is why you're seeing a value in this currency.

and that and the fact that there are only so many, you know, tokens out there. But I think that that basically as the security gets even more validated, I think the price will continue to go up. So obviously, the value of money does derive from the perception that people have of its value. And yet, at the same time, we also have a lot of people like Jamie Diamond, as we've found in recent weeks, who say that that also then shows what a bubble it is, that if the only thing that gives it value is people's belief in it, then it's nothing more than that. So when people say that, how do you respond?

So I'll take a crack at that first. I think that one of the first things that I did when I got into the space was I went and found a lot of people who were a part of what I like to sort of loosely refer to as the creation of the original Internet. Because a lot of those same people are in this space now because they see it as kind of that missing piece, that second wave that we've all been waiting for. And I always ask them the same question, which is, okay, if you want me to believe this is kind of the second coming of this great technology, then what year are we in in comparison? And interestingly, I have only met

one person of all of the hundreds of people I've asked who have gone past about 92, 93. And I think it's fascinating to hear that because it's a really important marker for your audience and for all audiences out there. Again, this is not a scientific survey, but it is interesting that most everybody stays in that space. And they all say it's moving a whole lot faster, but it's still really, really early. So I'm not saying that there's going to be a bubble, but I am saying that it's going to be a journey. And maybe there will be some serious ups and downs, but the naysayers of this technology will love those downs. And they're going to hop on them and say, see, I told you so. But if you look at the trajectory of Bitcoin,

over the last nine years, there's a lot of jagged edges in that arc, but that arc just continues going up and up and up. And I think it'll keep happening. I really, really do. As you think about how the data is stored on each one of these tokens, the value is just, it's not just a belief. It's where people are putting their actual information, which means, you know, everybody knows information is worth a lot of money. So I think that we're going to see some dips along the way, but that arc will keep rising. I agree with a lot of what you said, Jamie. And we get that question sometimes as well. You know, isn't this like the original web bubble? And around an exciting new technology, there will be a lot of enthusiasm. There will be a lot of speculation. There will be a diversity of projects in the space that are backed up by good technology and good teams and ones that are backed up by bad technology and bad teams. There will be projects that, don't turn out well, that will end up having a chilling effect on the space, certainly.

There will be excellent pieces of software created. And we are very committed to standing up teams and software projects that are going to contribute value to the space and value to users. And we think that as things shake out, the value of those software projects and of actually giving people technologies that they can use and that they like will be, what drives the expansion of the ecosystem. And many of those are coming online every day. And really connected to the value, we see the utility.

You know, as more people are using what we call the Web 3.0 and are needing fuel in order to power their usage of those applications, that's a reason that a lot of people who are excited about Ether imagine that it might increase in value. With MX Platinum, Almost every purchase made with your card can be covered with points, including new tastes, new fits, and virtually everything in between. That's the powerful backing of Amex.

Conditions apply. And can I add one thing onto that, Laura? I just wanted to say that I could not agree more, and it was really interesting. I was very recently listening to an interview from 1995, I think, maybe 94, with Jeff. Bezos. And it was incredible listening to him talk about basically what Amanda just said is that there's a desire, there's a functionality, there's a need for people to be able to send these assets around the world and buy the knowledge that they want, which is what is in his case was books. And that is how he created Amazon. And it's just, it's so telling that, you know, if I had two minutes in a room with Jamie Diamond, I would say,

you know what, why don't you listen to this interview and then give me a call? Because, you know, it's been a long journey for Jeff Bezos. You know, that was 1995 and now it's 2017. But when you have a vision and there's a real desire in society for systems to change and become more efficient and you have a product that undoubtedly offers that, I don't think you can stop that force. I think the comparisons to the early days of the internet are absolutely spot on the same way. You know, I'm glad you brought up Jeff Bezos because the same. way that people in the early days of the internet thought, you know, consumers will never use this. They'll never be commerce on this platform. It's too complicated for normal end users. Boy, were those people wrong. Eventually, once the security and scalability issues were solved, eventually those things all happened. So I think we're seeing a lot of similar, especially in our line of work, Jamie, comments about blockchain and cryptocurrencies, which is, you know, these are complicated.

These are narrow in their focus. They're for a very small group of people. No one will be able to understand how they work. There aren't, you know, broad consumer use cases. And the same way, we are working on security and scalability solutions that will allow people to create platforms that ultimately do let more people in. Exactly. Okay. So let's take this second to take a quick break. I do want to come back and discuss security more and some of the other issues. But first, I'd like to tell you about our fabulous sponsor, OnRamp. If you're starting up a new project or needs some design or branding help on an existing one, OnRamp has you covered. OnRamp is a full service creative agency that has helped numerous companies, including many in the

crypto space, maximize their brand awareness, gain traction, and accelerate growth. OnRamp has a passion for ramping up brands and boosting business results and can help with everything from website and logo design to social and content strategy. Focus on your core technology and leave the rest to OnRamp. To learn more and see how they've helped passionate entrepreneurs achieve their dreams, go to thinkonramp.com. Thanks onRamp for being a supporter of this podcast and all of our listeners. So one question that I had for you guys is, what do you say when people are wondering what backs the value of something like Bitcoin or Ether or any other cryptocurrency? Sure. Again, I hate to go back to this, but I think that the value lies in the security. It lies in

the usability and the clear desire in the marketplace for systems to work better. And how do you explain the security to people? How do you help them understand that it's very difficult to hack? So what I like to say is that every 10 minutes or so, all of the transactions that are happening on the Bitcoin blockchain get put in a block. And going back to that analogy of breaking into a house or breaking into a town. imagine that basically every 10 minutes, a new house is built. And so in order to break into this distributed network that has been broken up into all these different mini houses, as opposed to just

one big silo of data, every 10 minutes, it gets more and more secure. And that is, you know, it's, I mean, there's, there's one simple fact, which is that it's been around for nine years and no one's been able to hack it, which is really phenomenal given how hard people have tried. So I would never look anybody in the eye and say there's no chances can ever happen, but it is so much more secure than anything we know of today. And there are some serious security experts out there who are sitting in meetings saying, I get this. I get why you're saying this. And this is very appealing to me. And it's therefore worth it to me to consider moving the technology that we're using over to this, because it's in our interest, both security wise and cost-effective wise. That's for the business proposition. For the,

for the regular user, you know, there are just so many different applications that you can use, as I was saying about that train track with the car. Think of all the things that you could attach to that digital token and send and know that when you did that that record, that record of that transfer or that movement from A to B cannot ever be changed. And you think about that from the smallest things to, from electronic health records to, you know, a movie or music or some sort of asset that happens on a day-to-day basis. But think about something like having a baby. From here on out, if you have a child, you can timestamp the birth of that child onto this system. And there are two billion, not with an M, a B, billion people, according to the UN, in the

world who do not have a legal record that acknowledges their birth. These are major, major problems that we're trying to address. And if you have a system now that could actually track some of those assets and not actually be able to alter the records, these are pretty mind-boggling. And so once you get through the security piece, you can really start talking about all these various possibilities. And Amanda, yeah, how do you describe, like, how it's backed or what makes it secure? And especially in Ethereum's case, because you guys are switching from proof of work to proof of stake. I imagine it can get technical. How do you handle it? Sure. So I find every well-publicized hack of a large company, another opportunity to have a

conversation about blockchain security. So something like the Yahoo hack, and these are happening all the time. And it's actually pretty intuitive kind of visually thinking about it if we store our information on centralized servers that are usually protected by perimeter security. the most common manifestation of which is a firewall, then you have a honeypot of data for hackers inside. And once they get through that firewall or that other type of perimeter security, they're in. Whereas if you make it a town, and I love that, Jamie, I might steal that. Please do. If you make it a town, or if you store that information instead of in that central server in a decentralized network of nodes, you can try and tamper with a huge performance.

portion of those nodes and still not disrupt the functioning of the main network, which is a much more secure way to store your data. It just raises the bar of what would need to happen in order to hack it extremely, extremely significantly. I mean, proof of work and proof of stake are updates that are being made to the Ethereum blockchain. Updates to our protocols. They're quite technical. But the roadmap for Ethereum, which includes... proof of stake, which includes sharding, is really oriented toward improving the security and scalability. And one great thing for security that proof of stake was, does is make the network less vulnerable to something called a 51% attack. So we are putting in place and the Ethereum

Foundation is working very hard to put in place measures that will kind of similar to the early internet, convince governments and enterprises and players that this is a secure public commons and a secure place to put your data. The other thing that I would add, sorry, is that when you are, you have to figure out your audiences too. There are super highly technical audiences, then that conversation is very different. But when you're talking to most policymakers, or as I like to call them, kind of the top layer, anybody who's in a significant position of influence to influence others, whether it's a reporter

or an editor or a, you know, policymaker, regulator, a business leader, it's a different conversation. And I think it's really critical that you make it clear to them that it's actually not that hard to understand. Yes, there are things if you really want to get down into the weeds that are much more complicated. But taking siloed data and knowing that it's all in one place is something every CEO understands because that's what they're doing. They're paying many companies, a lot of money to basically build tons of barriers around that siloed information. And so what you're proposing to them essentially is, again, taking all that data and breaking it up into a number of different pieces so that it's so much harder to break into all those different pieces than it is to

break into one. And you'd have to do it in such a coordinated way, and it would be so cost-rehibitive. And as Amanda said, even if you got into a little bit of it, you can't actually break the main network anyway. So it's not even worth it. Then they really, they understand that. And there's a moment in a room that is so awesome that I really enjoy over the last two years where all of a sudden and you can see people in the room have this like aha moment where all of a sudden they're kind of cooking with grease and they say, okay, so I get what you just said. And then they're ready to go into a much deeper conversation about it. And looking forward, there are companies that are assembling huge amounts of data. And it almost seems like there's a very long-term kind of quest to have

all of the data in the world in one place. And if you're going to have that, the more data that you have, the more that you have access to, the more you collect, the higher the risks, aren't because the rewards are higher. And so if we're going to be comfortable collecting this much data and storing it and having it exist somewhere, what form is it going to be in? How are people going to be comfortable with a future that looks like that? And having one entity, having access and control over that data and putting perimeter security around it shouldn't make anyone sleep in their bed comfortably at night. Yeah. And so, but to get to this point that just that Jamie made about talking to different audiences. So I am wondering, there are probably people

who will want to know more details about how it can be secure. And so for those audiences, do you even go into things like mining or proof of work or, you know, and if you do, how exactly do you explain that to people? Sure. You know, Bitfury does a number of things, software and hardware, but we also have mining facilities all over the world. So we talk a lot about mining, but we don't talk about it with every single audience. You know, it just depends on who you are meeting with. We always touch on it, but it is almost like it's, we sometimes joke that we need a whole separate bottle of wine for that one, right? There's a whole other conversation to have about how mining works. My main gripe with the whole conversation is the word mining.

We don't even call it mining in our company. We actually think it's kind of just a silly word that doesn't convey what's actually happening. And in some parts of the world, it sounds bad. It sounds like little trolls that are kind of stealing your money. And it's the exact opposite. What do you call it? We call it securing the blockchain because that's what we do. We provide security for the blockchain or we call it transaction processing because that's what it is as well. I mean, once you can kind of compare it to what happens in the world today, you know, your master card kind of comparison, then people really understand, oh, okay, so it's a way of processing. It's a way of processing and securing my transactions. And once they understand that, then you can say yes,

and here is why it's so important that you understand the price of Bitcoin, again, in my mind, is connected to people valuing the security that it offers. Because once you understand that the quote-unquote mining is really just securing these transactions, then naturally there should be a price for doing that process. And, you know, if a Bitcoin's worth $20, then it's really not in people's interest to continue securing this system. When a Bitcoin's worth $4,000, it's definitely in people's interest to keep the system more and more secure. So the more the price of Bitcoin goes up, the more secure the system becomes. And so I think that once people kind of see that value chain and how those two pieces are interconnected,

that's the kind of discussion that we have. People who want to get into the real intricacies of how immersion cooling works at one of our data centers, which is, by the way, super cool. And we'll come back on your show and talk about that. We have other experts who can do a whole demonstration of the deep technical nature of how we're making our data centers work and how all the process happens. But generally, people want to continue to bring it back to what are they actually spending money on and how can they reduce their costs and gain a higher level of efficiency. And they're spending a lot of money on cybersecurity measures. and they always will, but how, there's a much better way.

And most audiences want to just hear what that better way is. Yeah, well, so this is actually something that I was a little bit curious about. Like the way crypto economics works is very complex to explain to other people. And I love what you said about how the more expensive of Bitcoin is, the more secure it is. Because I have tried to explain that, yeah, technically, it's not like you can't hack a blockchain, but because the economics are built into the system very intricately, it just financially won't make sense at certain points. So how do you explain how crypto economics works its way into the security of these systems? So one thing that's really important is that

every cryptocurrency and every token really think hard about the game theoretic incentives involved with mining it or trading it, or as Jamie says, which I like, securing the network and to make sure, because there isn't just Bitcoin and Ether, right? There are all kinds of tokens being built on top of the Ethereum platform and to really design those. And each token can be designed differently to align the incentives of the people that are purchasing it and mining and trading it with the ultimate goals. of the actual blockchain being able to be secure and scalable and continue moving forward.

And I think Bitcoin and Ethereum have both done that in different ways that are both really interesting and that most security experts in our company and that we work with on the government and enterprise front are really excited about. And also, I have another question, which is a lot of people, and this is what Jamie initially thought when she learned about Bitcoin, she thought, Oh, Bitcoin is criminal money. What do you say when people say things like that, that they think only criminals are using cryptocurrencies?

So there are criminals using cryptocurrencies. There are criminals using normal currencies, like almost any technology. There are going to be people using it for all kinds of means. I think it's also relevant that blockchain technology is also helping governments provide higher quality services to citizens and is helping the people track all. of the transactions globally in a way that actually makes it easier in many cases to identify

criminal behavior. Also, the use cases of blockchain are so enormously helpful and value-providing to humanity in a bunch of cases. And I think that deserves to be in the same conversation. For example, and the former Prime Minister of Haiti was actually at Ethereum Summit, which we had in New York. And we were speaking with it. Yeah, Laurent. Laurent Lamath. I think he was the longest serving Haitian prime minister, and he served in 2010 during the time of the, there's a really large earthquake in Haiti that destroyed all of the buildings that housed the municipal records. This is what he told us. So it was terribly difficult to reconstitute the land registry and figure out who owned what. And of course, if a government is struggling to provide continuity of ownership to citizens who have property. That's a real problem. And that's how he got really excited about blockchain and Ethereum in particular as a mechanism for storing and transferring

things like land titles, something like creating a land registry as a way to ensure that a government can preserve people's claims to ownership, even through natural disasters. And there are amazing people like Elizabeth Rosiello and like Ola Duden in the Middle East who are creating companies and systems using cryptocurrencies, using blockchain that enable people to people in emerging markets, people who otherwise wouldn't necessarily have access to actually participate in a fuller way in the global economy. So I think the social good use cases are so enormous and significant that those definitely are part of the conversation. Yeah, and I know that Fury is working a lot on land titling. So I don't know, Jamie, you can talk about that briefly. But I actually, because of time, I want to move on. So why don't you just kind of talk quickly about what you're doing? And then on your other question, which was on the security piece and the bad guys using Bitcoin. And I think it's really important for people to know. And this was a very important process for me because before the White House, I actually used to oversee communications for the entire U.S.

intelligence community. So not only am I an intelligence officer formerly, but national security is really important to me in security overall. And again, I came into this system from looking at it from a security standpoint that like it or not, and this was something I really. needed to accept. When there are bad people trying to use technologies, they usually, if your technology is working, they like to use it. So it's in a weird way, kind of a seal of approval, that it's actually working. They're the first, they're the early adopters, as it were. And it's important to remember this is a technology. It's not a panacea. When we look at the world today, you know, ISIS is using Twitter and Facebook. So we can't, don't, we should not convince ourselves that because we have this

amazing technology that therefore, you know, bad people aren't going to try and use it. What is amazing to me is actually this whole storyline that never gets covered. And I hope in the years to come that it really will is that what we are describing when we think of blockchain is a secure, immutable ledger of an asset transfer. That is what it is. And so from a law enforcement perspective, this should be the greatest thing in the whole world. It's so much easier to track cryptocurrencies than it is to track a bag of cash. So we're in a position as a company, and I know there are so many other companies involved, where we're really active in something called the Blockchain Alliance, which was started by one of our board members.

And he was the former chair of the White Collar Criminal Division at DOJ. And what he and another guy named Alan Cohen from DHS started was this really simple concept of saying, you know, in the 90s, law enforcement and industry worked together to figure out how to use the Internet, we need to go to law enforcement really early on and teach them how to use this technology to track bad people. And it's turned into this, you know, regular call with not only U.S. agencies of which all of them are apart now, but Interpol, Europol, Australian police, Canadian, etc. There are so many countries glombing on to this to this blockchain alliance to try and use this technology to actually fight bad guys. And hopefully as more people get caught and they will and we know that, there'll be more stories to take. tell, but there are actual people sitting in jail today that their crimes were solved by using blockchain technology. And I think that's extremely fascinating. Yeah, I have had this conversation with several people where people say, oh, but you know, criminals, they're demanding ransom, Bitcoin isn't it bad? And I honestly, every time I see a headline like that, I just think those

criminals are stupid. Well, they really are. And once people actually understand it, I think law enforcement over time would be honored if they use the blockchain for that because we can find them. So, you know, don't tell the bad guys, but it would actually be great if they were doing that. Yeah. And for listeners, I actually did have some people from the blockchain alliance on the show in season one. I don't remember which number episode, but if you just scroll back through, you'll see some reference to the blockchain alliance, and that's the episode. We should do an update interview with all those folks, because there's so much more that's happened in those couple years. That would be fun.

Yeah, and Catherine Hahn was also on the podcast. She's the former DOJ prosecutor that figured out a couple of the federal agents had stolen some Bitcoin from the Silk Road investigation. That was a wonderful episode. Yeah, yeah, she's fabulous. And I also had Elizabeth Rossiello on who you mentioned. And she was the very first episode. She was great too. So everybody should go back and listen to all of those. So moving on, one thing that I wanted to talk about was another thing that people often say. say, which is that they feel like Bitcoin is a Ponzi scheme. This is people who don't know Bitcoin. And I was thinking that what's interesting about these networks is that they're often designed in a way where early investors or participants are incentivized to get their friends and family to also join in. So how do you convince people that these really are not Ponzi schemes? So let me just start with some of the tokens that are being built on Ethereum with using the ERC20 token standard. these are actually fertile ground for network effects because instead of just offering users a product,

you are incentivizing them to have a set of behaviors. And so you can actually bring a really large amount of people into a process of behaving in a certain way who are token buyers. So just an example of that, we worked on a project called ad chain that had a token called ad token. and the software here is a registry of whitelisted media properties, websites that advertisers can then use to make decisions about where they want to put ads. But everyone who has the ad tokens is incentivized by means of the token structure to participate in making sure that the registry is high quality. So you can actually get a higher quality product by giving

people tokens that incentivize them to do a certain thing. So network effects, the way that a lot of tokens are designed does incentivize people to do certain things. And that's a great way for software products to immediately have users and to pick up speed and to accrue quality. And so that's actually something that we're excited about, that particular property of tokens. The only other thing I would add is that there are, looking at the very definition of a Ponzi scheme, And when you understand what a digital currency is, it's by definition not a Ponzi scheme. Now, it is a digital token that has value. And just like the dollar or the yen or the franc, there will be people who try to take that currency and do a whole bunch of things with it.

Good, bad, indifferent, hopefully mostly good. But, you know, going back to the answer before, there, you know, we don't live in a, perfect world. We live in a world that is empowered by technology, and it's up to us to harness that technology correctly. It's also up to us to work with regulators to help them understand the technology so that they can properly regulate the good from the bad and create some rules of the road over time that actually allow the right companies to do the right things. You know, when the SEC, I think, has been making some noise on this whole token sale process. And I think that they are in good faith trying to set up systems very early on, kind of going back to that

92, 93 concept of where we are in this movie of saying, you know, we're not against people trying to out-innovate and do really cool things, but let's make sure that we're making, that regular people aren't being defrauded. And so I think, you know, at any stage in any early technology, we, I would say to all of your listeners to stay smart and stay educated, and make sure that you're working with reputable companies because there are tons of really, really reputable companies and they're really doing unbelievable things. And, you know, there's always going to be snake oil salesmen in the bunch. I couldn't agree with that more.

And actually, we who are, you know, very committed to this space are kind of incentivized to see really good players and really good technology products flourish here and to weed out by various mechanisms, ones that aren't. So we would all like to see credible, high-quality products and token designs in the space. And so when we think about kind of like where this technology is going, because we understand the technology on a deep level, we can maybe come up with some vision of what that future looks like. But how do you describe that to an everyday person? Yeah. Look, I think going back to my original comment, which is that we're going to live in a world really soon where there will be global Wi-Fi and where everybody, most everybody in the world, if they want to,

will have a pretty inexpensive phone. And the world is wired for this type of technology. And most importantly, there's just a gigantic desire. No one has challenged me on this statistic yet, so I'm just going to keep saying it. But I would be willing to bet, based on the research that I've seen, that some 60, maybe even 70% of the world's population is living under some pretty broken systems. And people are upset. And there's no coincidence to why this technology, kind of came to life around 2008, 2009 at the start of the Great Recession, people really want change. They need, they want to provide for their families. They want to set up businesses and they want to work, want to do whatever they need to do to provide for the people that they love and stay safe and do what.

But how do you explain how blockchain will make that impossible? Well, I tell them that I think that there is a new tool in our toolbox, one of the greatest that we've ever seen since the creation of the internet that will allow you to do what you need to do. If you want to start a business, if you want to move money, if you want to start a business where you sell art and you want to move that art around the world, you can do it now with this secure and mutable ledger and it creates just much less friction in the system. And I think that that is really exciting. I don't do I know if there's going to be 25 different public blockchains with a million private blockchains attached to them? I don't know. And maybe it'll be like a VHS thing or one or two

win. I don't know. But we're definitely at the, the, right at the beginning of something really different that is going to allow for a new level of fluidity around the world a little bit more borderless. And Amanda, how do you describe this future? So I really agree with what Jamie said, highlighting all of the individuals around the world that have the misfortune of being born into broken situations in terms of the services that their governments are able to provide for them. And I don't know whether it's you said $2 billion earlier.

I've also heard 2.5 billion people who are currently unbanked or who don't have access to government provided identity and certainly makes it hard to open a bank account. And if you don't have access to basic identity and to banking services, it's very difficult to get yourself included in any way in the global economy. And just at the baseline level, at the foundational level, offering people the possibility of creating blockchain-based identities for themselves that they can create without that government infrastructure necessarily being there to provide that for them, creating that identity, then attaching reputation to it, gathering attestations from their community, people that trust them, people that know them, and then using those attestations. to build a reputation that makes you trustworthy enough to have someone halfway around the world, perhaps loan you a small amount of ether that you can use to execute smart contracts, to pay employees, to start a business. That really allows human beings the potential to bootstrap their own financial inclusion and begin if they choose to capitalize on their desire to create and contribute. And I think the amount of potential to be unlocked there is,

is enormous. Speaking of inclusion, I actually wanted to now switch to the two conferences that you both organize because they are easily far and away, the two most gender equal or at least not completely gender-lopsided crypto conferences I've been to. And so I wanted to ask you guys how you were able to do that in this space, which just from my very unscientific surveys, it appears to me, is maybe about like, 85% to 90% men. Well, I think that you just have to make it your mentality.

You know, I have a thing for strong, smart women. I have always worked with them and around them and for them. And I just, you know, my, it was very clear that the people who are organizing this event, and it was me, but a number of other folks that we wanted it to be 50, 50, 50 women and men. And anybody who came with a new suggestion of another name, because our event is only about 45, 50 people. If it was going to push us over the percentage line, we just said no. And you just, that's the, that's the, we sort of had that luxury of, of keeping the line on the number because we literally couldn't go past it. But you just have to be, be clear about what your priorities are.

And we just, we didn't want it to be 50, 50 because we think women are, you know, important to have in the room only. It was because we know that they offer just the same amount of value. And it's, And it should really, unfortunately, have nothing to do with gender, but it does. But there's just so many new perspectives. And what made it possible is that there's so many amazing women in the space. I mean, just in this interview, we've now named like seven women. So it wasn't hard to do. The only hard part was holding the line and saying, you know, I know that that guy sounds really awesome, but sorry.

It just, we're going to go into the 55, 60% range on men and we just can't. So you just got to hold the line and open your eyes because there are amazing women all over this world doing incredible things with this technology. They're not hard to find. So, Laura, I'll confess that mine was an accident. We did not engineer 50-50. We did not engineer 50-50. We just sought in Ethereum to host as awesome a blockchain conference as we possibly could. And we're doing another one, if I can plug it very quickly. There are going to be a lot of women there, though I'm not sure what percent in San Francisco on October 27th. But we had really wonderful women, and there are such great women in this space. It wasn't hard to accidentally have a, what I think was a very even ratio. Some panels had more women. We had, you know, amazing leaders like Amber Baldett at J.P. Morgan, who's our partner in the Enterprise Ethereum Alliance, the largest blockchain group on the planet. And Sandra Rowe from CME Group, who's also part of that.

Who was also on a podcast. who's amazing. And there are so many names I'm not going to even try and go through them. But there were so many individuals who just appeared as outstanding leaders in this space that it actually really wasn't difficult to have it end up that way. What I'd also add is that by virtue of the way the technology works, it's inherently a technology of inclusion. And that means not just enfranchising people that have been historically locked out of the global. economy, which are disproportionately women, it does do that. And also adding a layer of transparency to how capital and funding are working. Some of the mechanisms for capital raising or getting funding through blockchain and cryptocurrency aren't happening in back rooms. They're not happening in

boardrooms full of men who decide who should get funded and who shouldn't. It's about releasing your smart contracts. It's about, you know, saying this is my project and it isn't as connected to the opinions or possibly biases of a small group. So I really think that the way that more and more blockchain companies are funding themselves using the tools of the blockchain are offering enormous opportunities to women. Yes, yes. And that's actually an issue that I'm hoping to dive into even more. I have written about it a little bit, but I also was thinking recently it definitely should be a topic for a podcast because sometimes I do look at what's going on in this space and just think, oh, wow, it's kind of interesting that this technology has so much potential to bring inclusion to typically underrepresented groups like women. And yet there are sometimes it feels that there are that many women in this space. I don't know that I agree with that. I'm so sorry to cut you off. But I think that it's been.

really, and maybe it's just because I come from government where there's definitely not very many women, but I, I, I think there are some really phenomenal women and not just a few. There are tons of women in this space, and they're doing incredible things from Gemma Green in Australia, to Mariana to Han, to Stella Marcon, to, and not only that, but, you know, Maya, GE, I mean, they're, they're not only that, but their stories are incredible. Not only are they in these big jobs now, but they are refugees in their former life. They're, you know, grenade surveillance. survivors. They are Time Magazine's top 100 most influential women. They're really cool people. That's Roya who is also in the podcast. There's so many cool people in this space who, I don't know.

I kind of have a different theory, which is that the first wave of the internet was obviously and continues to be incredibly male dominated. And so now that we're in kind of this second wave, which I do believe we are, I think a lot of women are coming in with a lot of really strong opinions. And they're kind of over the ways of the past and they're ready to out-innovate and, you know, become their own VCs. And I just, I think we're going to see a whole new wave of kind of feminism in this, in this new space. I really do. Yeah, I couldn't agree more. And also just, another thing I'd add in terms of, um, of learning to work with blockchain technology from the more technical front, um, this technology is so young that if you start learning to code and

solidity, for example, right now, nobody has that big of an advantage on you. You can still be one of the first people to learn how to do this. So it's not like there's an entrenched hierarchy of people that have spent a long, long, long time knowing about this. If you start now, you're in a good position. There's no door to knock on. You can start doing it immediately. Because that seems to be the hardest, hardest kind of ceiling to crack in a way is the engineer side, the developer side. And it's so, it's ripe for people who are just starting out, because you will have a running start in the years to come on everybody else before you or after you. Okay. Well, so for all the women who are listening out there, that's some career advice.

Get in the game. We need to. Apply to Consensus Academy. We're training lots of developers. Yes, actually, that is true. I do know about that resource. Okay, great. Well, I'm so glad that you guys both came up.

on the show. Why don't you guys let people know how they can get in touch with you? Great. I am at Blockchain Smith, which is my Twitter account. So feel free to reach out. I'm on LinkedIn. Again, it's Jamie Smith. And look us up on our website also for the Global Blockchain Business Council, which is GBB Council. So the C has like a double play. But thanks so much for having me on. This has been a lot of fun. And wait, you said GBB Council. Is that on Twitter? No, sorry. Yes, that's on Twitter as well, but that's the website as well, because it's the same Twitter account. If you're listening, feel free to send me an email. It's Amanda.gutterman. Gutterman spelled as in gutterman. I didn't choose it at ConsenSys.com. C-O-N-S-E-N-S-Y-S-S-Y-T. Also, you can meet me in person at Ethereum. You should definitely come if you have a chance. Oh, I didn't realize we were giving email addresses also. I'm happy to do that, too.

Well, if you want. It's Jamie, J-A-M-I-E. Dot Smith at Bitfury.com, B-I-T-F-U-R-Y. Grace, well, thanks both of you again for coming on the show. Absolutely. Thank you, Laura, for all that you're doing. It's really exciting. Thank you for having us.

This was awesome. Thanks so much for joining today's episode with Amanda Gutterman of Consensus and Jamie Smith of Bitfury. To learn more about them and to find previous episodes of the show with other innovators and thought leaders in the blockchain and crypto space. check out my Forbes page, Forbes.com slash sites slash Laura Shin. And be sure to follow me on Twitter at Laura Shin. New episodes of Unchained come on every other Tuesday. So if you haven't already, subscribe on iTunes or wherever you get your podcasts. If you like this episode, share it with your friends who are looking to learn more about this rapidly evolving space and rate, review,

or send me feedback on who you'd like to see interviewed on the show. Unchained is produced by me, Laura Shin, with help from Elaine Zelby and Fractal Recording. Thanks for listening. Thank you.