so if you’ve been following the
blockchain space for the last few years
you’ve probably heard the term
decentralization and decentralization is
a fantastic concept it allows us to
build systems that are secure and
correct but they don’t rely on one party
for their security and their correctness
they’re relying a whole different bunch
of parties maybe different people
different computers different devices
all over the world coming together to
make the system secure now
decentralization is often pitted against
its arch enemy which is centralization
and centralization is bad because
there’s a single point of failure that
can be attacked but what I want to do in
this talk is I want to step back from
this dichotomy that I often see being
discussed in the blockchain States spent
centralization versus decentralization
and really think about what block chains
give us which is trust and security and
so what I want to do in this talk is
talk about how block chains can help us
build the future of trust so the story
of centralization starts with the
internet when the internet started in
the 90s there was this idea that it was
decentralized we could all host our own
content online we didn’t have to wait
for the radio or the TV to broadcast our
ideas we could communicate with people
all over the world without paying
long-distance fees but I would argue
that this decentralization has actually
converged to centralization today
instead of posting content are in
individually posted websites we post it
on Facebook instead of having individual
mail servers run by individual companies
we use outsourced mail providers like
Yahoo or Google instead of taking our
resumes and emailing them two people are
submitting them to job forums we all
look for jobs on LinkedIn and even our
physical world is being centralized
through the internet we used to take
taxis that were regulated by cities and
operated by individual companies and now
we just use uber to get around the speed
and so we’re seeing this increased
centralization in the internet and along
with it comes with these vulnerabilities
now I want to say that centralization is
not a bad thing there’s a reason that
we’ve moved to this model Facebook is
really efficient it’s a great way to
communicate it’s a really nice interface
uber is really fast and it’s really easy
to get around these are systems that
people want to use on the other hand
there are some issues today you might
have heard that Facebook announced that
they found a disinformation campaign
that was targeting Americans in the 2018
elections in order to influence the
elections
why are they using Facebook it’s a
centralized platform that’s easy to
attack we also have data breaches in
2013 it was found that every single
Yahoo account that existed at that time
was actually breached and in fact we
didn’t even find out that this happened
until three years later
similarly in 2012 LinkedIn accounts were
breached uber accounts a breach were
breached in 2016 and again we didn’t
know that they were breached until much
later because this was tried to be
hidden by uber at the time so we can see
that centralization creates this great
place for users to go but it also
creates a great place for attackers to
go and try to attack those users and so
the promise of the blockchain is that
instead of having to trust a single
centralized party with our data or
information or our money or whatever
we’re using the blockchain for we can
actually trust a bunch of distributed
parties and the idea is we have all of
these parties it’s really hard to
compromise every single one of them so
even if we do compromise some of them or
some of them are acting in a biased and
malicious way we can still have security
because we’ve got everyone else behaving
properly so people are really excited
about blockchains various applications
and I’m not gonna spend too much time on
this today but one thing well probably
heard of is crypto currency crypto
currency is one of the most active
applications of the blockchain today
what it gives us is we can use block
chains to build a decentralized currency
instead of trusting a central bank to
issue currency instead of trusting a
government we can have decentralized
borderless currency that does not rely
on banks and so there’s been a lot of
excitement about bitcoins e-cash Verdean
all of these different types of
currencies that are being built on top
of block chains so what’s one of the
first applications that people are using
crypto currency for they’re actually
using it for investment and trading and
so one very sort of common use case
today is I’ve bought a bunch of bitcoins
and I’ve decided that I want to buy some
other kind of currency maybe in this
example I want to buy Z cash which is a
kind of anonymous crypto currency so how
do I do that okay let’s talk about how
people do that today so we have our user
Alice she wants to trade her bitcoins
for someone’s e cash how does she do it
well what she does today is she goes to
a centralized exchange a centralized
crypto currency exchange
she gives her bitcoins to that exchange
then she tells it I would like to buy
some other kind of currency let’s say Z
cash what’s the price okay
like this price let’s go ahead and then
the exchange will then give her her Z
cash later she’ll be able to withdraw
the Z cash from the exchange this is how
you trade cryptocurrency today at
centralized exchanges and there are tons
of these all over the world that people
are actively trading on so this is great
people want to trade on centralized
exchanges why because a lot of people
can come to the exchange trade the
currency with each other prices are good
UX is good it’s convenient it’s fast
people want to use these systems that’s
why we have these systems but at the
same time if we take a step back isn’t
it strange that we’ve invented
decentralized currency but then what we
do with it is give it to centralized
exchanges and that’s how we use it and
that’s how we trade with it we’re seeing
this mirroring of what happened on the
internet when it went from decentralized
to centralized again and so in the in
the blockchain community there’s this
discussion now about maybe we shouldn’t
be missing centralized exchanges anymore
maybe we should use decentralized
exchanges why are we trusting the
centralized exchange and in fact this is
not just a theoretical concern we’ve
seen issues with centralized exchanges
in 2014 there was the famous hack of mal
Cox where 750,000 bitcoins were lost you
have to think that a bitcoin is roughly
around let’s say $10,000 today per coin
so 750 thousand of them were lost in
2014 and this keeps happening these are
different exchanges that have been
hacked including one in Japan that
happened this year was called the
biggest theft in the history of the
world without exaggeration so you know
the promise of centralization is
actually leading to these types of
attacks so what do we do about this so
there’s a whole movement towards
decentralizing exchanges but what I want
to argue in this talk is actually this
is missing the point the whole point of
blockchain is not centralization versus
decentralization it’s trust okay let’s
step back to the example of the
traditional internet or something like
Facebook we use Facebook we give them
our data we trust them and if they do
something with our data we don’t like
there’s not too much we can do about it
there’s not too many levers we can pull
their illegal levers but in terms of
technological leathers there’s not much
we can do on the other hand when we work
with crypto currencies or block chains
we have a blockchain a blockchain is
decentralized a blockchain has to be you
have to compromise a lot of parties if
you
want to actually compromise the
blockchain and so why are we so focused
on the centralization versus
decentralization question when we what
we should really be thinking about is
the blockchain question do we have a
blockchain question do we have a
blockchain here is there something we
can trust instead of the centralized
party and so what we’re doing in our
company at Commonwealth crypto and the
sort of view point that I have for this
entire space is that we don’t need to
think about it as a dichotomy between
centralized and decentralized we can
build centralized systems that are
backed by the blockchain if we trust the
blockchain we don’t have to trust the
centralized system so let me give you a
picture here we have our centralized
system that can be compromised but
actually what’s giving us security in
backing our actions is the decentralized
system all of these parties working
together to make sure that the
blockchain is secure and correct and so
in specific what we’re doing right now
is building systems for trading at
centralized exchanges that rely on the
blockchain for security rather than the
centralized exchange for security even
if the centralized exchange is attacked
we can still have security people coins
don’t have to be lost and as a bigger
picture I think it’s a really exciting
time right now as these blockchain
systems are being built and as the
community starts to think about what do
we actually want from a broad chain what
do we actually get from a blockchain do
we get decentralization do we get
security or do we get trust in my view
centralization is not going away people
would like that the usability the
liquidity the gathering of users
together we’re not going to get away
from that but we can at least use the
blockchain to build systems that are
more secure and robust – despite the
fact that they’re centralized thank you [Applause]
blockchain space for the last few years
you’ve probably heard the term
decentralization and decentralization is
a fantastic concept it allows us to
build systems that are secure and
correct but they don’t rely on one party
for their security and their correctness
they’re relying a whole different bunch
of parties maybe different people
different computers different devices
all over the world coming together to
make the system secure now
decentralization is often pitted against
its arch enemy which is centralization
and centralization is bad because
there’s a single point of failure that
can be attacked but what I want to do in
this talk is I want to step back from
this dichotomy that I often see being
discussed in the blockchain States spent
centralization versus decentralization
and really think about what block chains
give us which is trust and security and
so what I want to do in this talk is
talk about how block chains can help us
build the future of trust so the story
of centralization starts with the
internet when the internet started in
the 90s there was this idea that it was
decentralized we could all host our own
content online we didn’t have to wait
for the radio or the TV to broadcast our
ideas we could communicate with people
all over the world without paying
long-distance fees but I would argue
that this decentralization has actually
converged to centralization today
instead of posting content are in
individually posted websites we post it
on Facebook instead of having individual
mail servers run by individual companies
we use outsourced mail providers like
Yahoo or Google instead of taking our
resumes and emailing them two people are
submitting them to job forums we all
look for jobs on LinkedIn and even our
physical world is being centralized
through the internet we used to take
taxis that were regulated by cities and
operated by individual companies and now
we just use uber to get around the speed
and so we’re seeing this increased
centralization in the internet and along
with it comes with these vulnerabilities
now I want to say that centralization is
not a bad thing there’s a reason that
we’ve moved to this model Facebook is
really efficient it’s a great way to
communicate it’s a really nice interface
uber is really fast and it’s really easy
to get around these are systems that
people want to use on the other hand
there are some issues today you might
have heard that Facebook announced that
they found a disinformation campaign
that was targeting Americans in the 2018
elections in order to influence the
elections
why are they using Facebook it’s a
centralized platform that’s easy to
attack we also have data breaches in
2013 it was found that every single
Yahoo account that existed at that time
was actually breached and in fact we
didn’t even find out that this happened
until three years later
similarly in 2012 LinkedIn accounts were
breached uber accounts a breach were
breached in 2016 and again we didn’t
know that they were breached until much
later because this was tried to be
hidden by uber at the time so we can see
that centralization creates this great
place for users to go but it also
creates a great place for attackers to
go and try to attack those users and so
the promise of the blockchain is that
instead of having to trust a single
centralized party with our data or
information or our money or whatever
we’re using the blockchain for we can
actually trust a bunch of distributed
parties and the idea is we have all of
these parties it’s really hard to
compromise every single one of them so
even if we do compromise some of them or
some of them are acting in a biased and
malicious way we can still have security
because we’ve got everyone else behaving
properly so people are really excited
about blockchains various applications
and I’m not gonna spend too much time on
this today but one thing well probably
heard of is crypto currency crypto
currency is one of the most active
applications of the blockchain today
what it gives us is we can use block
chains to build a decentralized currency
instead of trusting a central bank to
issue currency instead of trusting a
government we can have decentralized
borderless currency that does not rely
on banks and so there’s been a lot of
excitement about bitcoins e-cash Verdean
all of these different types of
currencies that are being built on top
of block chains so what’s one of the
first applications that people are using
crypto currency for they’re actually
using it for investment and trading and
so one very sort of common use case
today is I’ve bought a bunch of bitcoins
and I’ve decided that I want to buy some
other kind of currency maybe in this
example I want to buy Z cash which is a
kind of anonymous crypto currency so how
do I do that okay let’s talk about how
people do that today so we have our user
Alice she wants to trade her bitcoins
for someone’s e cash how does she do it
well what she does today is she goes to
a centralized exchange a centralized
crypto currency exchange
she gives her bitcoins to that exchange
then she tells it I would like to buy
some other kind of currency let’s say Z
cash what’s the price okay
like this price let’s go ahead and then
the exchange will then give her her Z
cash later she’ll be able to withdraw
the Z cash from the exchange this is how
you trade cryptocurrency today at
centralized exchanges and there are tons
of these all over the world that people
are actively trading on so this is great
people want to trade on centralized
exchanges why because a lot of people
can come to the exchange trade the
currency with each other prices are good
UX is good it’s convenient it’s fast
people want to use these systems that’s
why we have these systems but at the
same time if we take a step back isn’t
it strange that we’ve invented
decentralized currency but then what we
do with it is give it to centralized
exchanges and that’s how we use it and
that’s how we trade with it we’re seeing
this mirroring of what happened on the
internet when it went from decentralized
to centralized again and so in the in
the blockchain community there’s this
discussion now about maybe we shouldn’t
be missing centralized exchanges anymore
maybe we should use decentralized
exchanges why are we trusting the
centralized exchange and in fact this is
not just a theoretical concern we’ve
seen issues with centralized exchanges
in 2014 there was the famous hack of mal
Cox where 750,000 bitcoins were lost you
have to think that a bitcoin is roughly
around let’s say $10,000 today per coin
so 750 thousand of them were lost in
2014 and this keeps happening these are
different exchanges that have been
hacked including one in Japan that
happened this year was called the
biggest theft in the history of the
world without exaggeration so you know
the promise of centralization is
actually leading to these types of
attacks so what do we do about this so
there’s a whole movement towards
decentralizing exchanges but what I want
to argue in this talk is actually this
is missing the point the whole point of
blockchain is not centralization versus
decentralization it’s trust okay let’s
step back to the example of the
traditional internet or something like
Facebook we use Facebook we give them
our data we trust them and if they do
something with our data we don’t like
there’s not too much we can do about it
there’s not too many levers we can pull
their illegal levers but in terms of
technological leathers there’s not much
we can do on the other hand when we work
with crypto currencies or block chains
we have a blockchain a blockchain is
decentralized a blockchain has to be you
have to compromise a lot of parties if
you
want to actually compromise the
blockchain and so why are we so focused
on the centralization versus
decentralization question when we what
we should really be thinking about is
the blockchain question do we have a
blockchain question do we have a
blockchain here is there something we
can trust instead of the centralized
party and so what we’re doing in our
company at Commonwealth crypto and the
sort of view point that I have for this
entire space is that we don’t need to
think about it as a dichotomy between
centralized and decentralized we can
build centralized systems that are
backed by the blockchain if we trust the
blockchain we don’t have to trust the
centralized system so let me give you a
picture here we have our centralized
system that can be compromised but
actually what’s giving us security in
backing our actions is the decentralized
system all of these parties working
together to make sure that the
blockchain is secure and correct and so
in specific what we’re doing right now
is building systems for trading at
centralized exchanges that rely on the
blockchain for security rather than the
centralized exchange for security even
if the centralized exchange is attacked
we can still have security people coins
don’t have to be lost and as a bigger
picture I think it’s a really exciting
time right now as these blockchain
systems are being built and as the
community starts to think about what do
we actually want from a broad chain what
do we actually get from a blockchain do
we get decentralization do we get
security or do we get trust in my view
centralization is not going away people
would like that the usability the
liquidity the gathering of users
together we’re not going to get away
from that but we can at least use the
blockchain to build systems that are
more secure and robust – despite the
fact that they’re centralized thank you [Applause]
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