TRANSCRIPT: Blockchain 101 - Everything the Enterprise Needs to Know
[Innovation Heroes theme music] This episode of Innovation Heroes is brought to you by the LastPass identity management security solution and the new GoTo IT tools, making IT easy. Visit goto.com and lastpass.com to learn more. Welcome to SHI's Innovation Heroes, a podcast exploring the people and businesses making a difference in our constantly disrupted world. I'm your host, Ed McNamara. [Innovation Heroes theme music] [gentle electronic music] We've all heard the word "blockchain" tossed around a lot lately, and if you're an IT leader in the enterprise space, you probably have some concerns, preconceptions, and especially, if you're like me, a feeling of total, absolute confusion. Just what the heck is a blockchain, anyway? And why is everyone talking about it so much?
When you boil it all down, I see blockchain as a trust protocol. And, if you think of the internet protocol as an information protocol - you know, you see lots of information being sent across the internet - if that information is passed through a blockchain, you can then trust it because it can never be changed.
[upbeat electronic music] I might be a little foggy on what exactly this tech is, but I could still tell what's going to be big - not just big when it comes to disrupting currency in the way we do finances across the globe, but also big as in major paradigm-shifting, industry-shattering big - from data storage and analysis to quality control, to entertainment and beyond. And, like any new and innovative technology coming to the enterprise space, we need to be thinking about security, and how to make blockchain work sustainably, today, and long into the future, and, of course, how to not get left behind.
We're hoping that the penetration of blockchain technology will only increase through these different verticals, to provide us a world that's more decentralized, and more trusted. Blockchain doesn't have to be this big, scary thing. It's totally something that's within your grasp. You don't have to tear out or replace your entire stack. You can just dip your toe in the water, get familiar with the technology, and then incrementally add it to your application stacks. [upbeat electronic music continues]
[pensive music] I need someone to walk me through a blockchain-for-enterprise crash course, and who better than Medha Parlikar? Medha is the CTO and Co-Founder of CasperLabs, which calls themselves the first fully decentralized, truly scalable blockchain designed for real-world speed and security. The Casper protocol helps enterprises use blockchain tech in unique, secure, and functional ways by demystifying what's possible when they bring blockchain services to your stack, not the other way around. Medha is a tech veteran with more than 30 years of experience. She holds a Bachelor's degree in Computer Information Systems and programming from Coleman College. Medha started working in technology in the early 1980s, building computers in the basement. For the past two decades, she has been delivering production SaaS software for large companies, including Adobe, Omniture, and Avalara. And, in case all that somehow wasn't enough to impress you, she also has a black belt in karate. [pensive music continues] Medha, thanks so much for your time. Where are you joining us from today?
I am coming to you from the wonderful island of Puerto Rico.
That is fantastic. Very, very jealous of that. I'm not sure how many legitimate black belts that I know, so I do wanna ask the question to you. Do you think the process of mastering that martial art, you know, helps in any of your day-to-day enterprise IT work, or life in general?
Oh, you know, absolutely. The first thing I would definitely challenge you on is that I mastered anything at all, so... [Ed laughs] [Medha chuckles] That's the one thing it taught me, right? It taught me that, to always be in a state of learning, and that the more you think you know, the less you actually do know. It taught me, you know, to have disciplined thought and disciplined action, and, yeah, I think it's been massively impactful in my life in terms of who I am today.
Excellent, excellent. Can you start by telling us a little bit about you and your journey to Casper?
Oh, gosh, yeah. So I lived in San Diego for 30 years before I moved to Puerto Rico, and I worked at a lot of, you know, iconic San Diego companies in the software space as a leader in technology and, in 2017, I was approached by a former colleague to manage a team of developers building an open-source blockchain, and it was through that project that I met the other co-founders and investors in CasperLabs, and we founded the company in October of 2018, and the rest is kind of history, I guess.
Can you give me your elevator pitch for CasperLabs, like why it was founded, what do you do, and for what customers?
CasperLabs was founded explicitly to build, you know, a public, open-source blockchain protocol, which we did, which is known as the Casper protocol, and we wanted to couple that open-source technology with a professional services company that would help businesses and enterprises adopt blockchain technology, and we saw the writing on the wall that this was going to be a new, emerging technology, that it was here to stay, and we looked at the landscape and saw that a lot of the opened, permissionless blockchain protocols wouldn't meet the needs of enterprises, and so we set out to, you know, explicitly solve that problem. [atmospheric electronic music]
So, full disclosure. I work at a technology company on the marketing side, so my view of some of these, you know, complex concepts like cryptos, Bitcoin, blockchain is often heavily influenced by buzzwords, which is what I'm dealing with, in a creative aspect, you know? For my benefit, and that of listeners, just to level the playing field, can you explain to me in simple, you know, no-jargon terms, how you view blockchain, and how it works?
When you boil it all down, I see blockchain as a trust protocol. And, if you think of the internet protocol as an information protocol - you know, you see lots of information being sent across the internet - if that information is passed through a blockchain, you can then trust it because it can never be changed, and it's this trust that enables cryptocurrency because, if you think, you know, in order to transact value, you need a way to inject trust into the transaction, and right now you have centralized banks that do this for us. We trust banks to store and transact funds, and a public, permissionless blockchain replaces this trust. And it's possible to have a blockchain without any cryptocurrency at all, but not the other way around, so cryptocurrency is very much a use case of blockchain. [atmospheric electronic music continues]
I saw, in an interview, that you had said that you were an avid fan of the promise of decentralization and open source. What does that mean, and why are you a fan?
It used to be, 15, 20 years ago, that all content was delivered in a very centralized manner, and those were the content creators, right? Disney, Hollywood, they all control the content that we saw, the music we listened to. Even newspapers, right? There was a very central point of control around content, and the internet has really done a lot to decentralize it through these types of applications like YouTube, and even Twitter, even though they're somewhat centrally controlled, but people have a voice now, and they can participate, and content creators are able to express themselves and connect directly with their audience.
This is something that is, you know, breaking down barriers to entry, but I don't know if people feel that way when they hear about blockchain being talked about.
100%, right? It's still a new technology so the user experience isn't quite as seamless as you would like it to. As the technology matures, we fully expect that, you know, the user experience will become much, much more mainstream, but even today, it's possible for many more participants in those countries that allow, you know, cryptocurrency and have legislation to support it, for individuals to participate in upcoming ICOs and investing in new decentralized finance protocols, right? And there's a ton of wealth that's being created, that is actually being created from the bottom up instead of top down, and typically, you know, wealth creation has been very, very tightly controlled by, you know, the level of accredited investor and above, and I see cryptocurrency and blockchain technologies being able to really lower that bar to allow average individuals to participate and save their money, and really earn wealth, and protect their assets.
Agreed, and I know that, you know, this is open-source and decentralization, but, you know, your company also offers professional services, so how is CasperLabs adding to something that is, you know, open-source concept?
I believe, in order for, you know, people in general to get the benefit of blockchain technology, that the agencies or the companies and the products that they interact with will also need to implement this and provide the interfaces into the technology. I believe this is a necessary step, and so, as such, CasperLabs is a company that's going to be working with enterprises to help them understand the technology, you know, develop some ideas around use cases, and help them to go to market. And we saw this trend in the internet, you know dot-com boom, we see it in cloud, early days, AWS adoption, right? It's a very, very similar trend. I see the same thing happening here, and we're positioning ourselves to help enterprises get that support and that guidance so they can adopt the technology successfully.
You talked about your 30 years in the industry and some of the different changes that have come about, you know, over that time from internet to cloud, AWS. I guess the next obvious question is, you know, what's so different about blockchain versus other technologies that already exists, and why should people, you know, care about that?
Oh, that's a big question. [both laugh] So what makes blockchain really different? You know, when you talk about the boom/bust that happened with the internet, or even with cloud computing, is blockchain is actually in a very unique position to harness venture capital directly from the individual consumer, right? So blockchain actually kind of came with its own funding, so that's been a very, very interesting aspect, in this entire ecosystem, is that there's a ton of value that's been created within the blockchain ecosystem, the public protocol ecosystem, right? When we talk about a technology, you know, just by itself, what I see it doing is streamlining a lot of operations, and providing some guarantees around what happened in history, and once you do that, then you can operate other information with a lot more guarantees and a lot more trust, right? It has its potential to really streamline business operations and provide a lot of great value to the consumer when implemented correctly.
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They are very, very interested in adopting blockchain technology. I believe that CTOs and CIOs in large companies, enterprises, believe that the technology is here to stay, and they are looking to gain a competitive advantage by using blockchain technology. And, they come to us, you know, "Here's what our business does. Tell us how we can use blockchain technology. What are some of the optimizations?" So, a lot of it isn't on use case ideation, and what we're finding is that, in almost every enterprise, there's an opportunity to streamline and optimize business processes using blockchain technology, be it public, private, or some kind of a hybrid model. Businesses are looking for two fundamental things: either to increase revenues, deepen engagement; or reduce risk, right? And blockchain provides opportunities for both sides of this equation.
I saw some of the stats from some of the analysts. They're saying that the business value of blockchain is $176 billion by 2025, and that's supposed to expand, according to one analyst, to $3.1 trillion by 2030. I mean, that's much more than just exponential growth. I don't even know what the word is. You know, how do you account for how much that is planned to, kind of, explode over a five-year period not too far from now?
I like to look at things from an engineering-centric point of view, and so having tooling and processes in place to allow ourselves to scale out and onboard more developers and more enterprises onto the technology is really what we're about, right? When we look at contributing to the Casper ecosystem, it's all about, "Is this gonna 10x or 100x, allowing 100 developers to become successful, allowing 1000 developers to become successful using the core technology?" because we do see this exponential increase in adoption, and one of the reasons CasperLabs is set up is to help, and usher that era in, to usher in decentralization, to usher in blockchain technology.
When new technologies are introduced, you know, very often they're sold to the C-suite, and then, you know, somebody at the C-level turns to the folks in the IT department and say, you know, "Can you can you investigate this?" Is there any disconnect between, you know, the folks who are at the staffing level or in the C-suite on blockchain, or is everybody pretty well aligned at this point?
So, I believe developers are keenly interested in learning about blockchain technology. It's like the number-one sought-after job or most-hired job right now on LinkedIn, if you look at the statistics, so, from a development perspective, they're keenly interested. I think it's very different than what we observed in the cloud days where your network operations team was actually pushing against the cloud because they were seeing those resources being, you know, reabsorbed back. We're not seeing that issue at all here. We're not seeing that problem here with blockchain technology. In fact, what we're seeing is that developers are very eager to adopt. Additionally, you know, Casper really doesn't see blockchain technology as a tear out and replace. I built it from my perspective, as one of the, you know, middle managers in a fintech company or in a SaaS company that needed to select a platform protocol for use in my product. What are the things that I would need, right? I would need to be able to maintain the code. I needed to be able to hire people to support it without using some bespoke programming language. I need to be able to test it, right? So, there was all of these engineering-first principles. I needed to be able to secure it. I needed to be able to monitor it, make sure that it was upgradable, all of these things, right? And so, that's all built into both the public Casper protocol as well as any private implementation. So, from a stakeholder perspective, we took a really holistic view, and we started out, right from the beginning, to build something that internal stakeholders could get around, right? And this has resonated extremely well with the companies that we've spoken with because these are the things they worry about, is if they're going to bring a technology in,` it's not like, "Oh, I'm just selecting a vendor," right? When you onboard a technology, like, you are getting into a relationship with that provider, you're trusting mission-critical processes with them, and that is nothing to be toyed with, so we take it very seriously.
So, we've just been talking about, kind of, the concepts and maybe even some governance. Can you share with us some of the coolest and more exciting use cases you've seen with your clients, or in the enterprise space, in general?
Gosh, there's a couple of really cool use cases that we've been working on. So, I'll talk about Metacask because everybody loves whiskey, right? I don't drink whiskey, but a lot of people like it--
I have heard. I have heard that. Yeah. [both laugh]
So Metacask, actually, they sell rare whiskey casks, and they integrated with a public blockchain. They've integrated with the Casper blockchain, and they track the ownership of these rare whiskey casks, which obviously have special storage requirements, right? But they allow them to be bought and traded and sold via their marketplace, using auction infrastructure that was also built on Casper, and this unique auction technology allows participants to just trust the blockchain rather than any single entity. So, Metacask was able to provide its customers much greater price discovery by integrating blockchain technology as well as these, you know, unique auctions that we have on Casper. In the more enterprise-y space, if you think about, you know, talking to financial companies, or any company that actually holds consumer information, you know, corporations recognize a liability they face with data leakage, right? And so, personally identifiable information is a huge security risk, right? And you hear all the time about, you know, consumer information being leaked onto the dark web, and there's a lot of liability, and so, you know, there's a use case where you can actually have what we call, like, a consumer qualification token, as an example. So, a customer, a consumer goes through a qualification process, their information is collected, they're qualified by the company, and then that information is firewalled, and then internal product teams only get a token, and they can trust that token on the blockchain. If you have multiple product teams, they can see what level of qualification the customer has, based on the token, and they can offer them products, goods, and services based on that token, without ever having to touch their identifiable information, right? And the security operations team can tightly lock that information down without it leaking out within the organization, and this is hugely important from, you know, from a SOC compliance perspective, from SSAE compliance perspective, right? [atmospheric electronic music] Really, really having tight constraints and really limiting your risk and exposure on your customer information, there, is a huge value proposition for customers. You know, those are two simple examples.
What about quality control? You brought up the example of Metacask, and I know there's a whole secondary market out there for folks who make whiskey and now there's even, you know, bourbon barrel beers that are out there, and there's this whole secondary market for actually getting, you know, casks that used to contain one product, and now using for another. I mean, it just made me think, can blockchain also be used for quality control along the process of bringing your product to market? [atmospheric electronic music continues]
Absolutely. So, we are actually working on a use case right now that uses IoT devices to track the transmission of, you know, temperature-sensitive products right across the supply chain, and so the IoT device, actually, you know, registers its data on the blockchain and then, upon receipt at the destination, the purchaser can now validate whether or not they wanna accept an individual crate or not, depending on what the device is reported for that crate. And so, they're willing to pay for this product, because they're getting product that they can trust because there's health and safety issues associated with these products - obviously, they're degradable, biodegradable, in some format - so there's a liability that they're reducing, and they can also only pay for the product that they know is high quality. And so, this is exactly the kind of use cases that are being built, and, you know, integrating IoT devices with blockchain is also a super interesting area that we're gonna be delving into. We have a key partnership with WISeKey, which is one of the largest security providers out there, and they specialize in, you know, IoT devices to secure items, so looking forward to that, as well. [atmospheric electronic music continues]
Absolutely. And I will say, you know, kudos to both of us; we've made it this far, and we haven't used the word "disrupter" yet, but... [Medha laughs] [Ed chuckles] ..that whole industry about quality control, what you just described is a disrupter to an industry, for sure, and that's really, really interesting. Okay, so let's say I'm a CIO, and you know, you've got me convinced. Sign me up for blockchain. What are the barriers to entry, and maybe what are the first things I need to do in order to get started down that path, if anything?
Gosh. Well, if you're interested in learning more about blockchain, I'm obviously gonna give us a plug and say, "Give us a call," right? "We're here to help." [both laugh]
Right? Absolutely. [atmospheric electronic music continues]
Many organizations are struggling with how blockchain could potentially fit into their enterprise. They're really looking for use cases, right? And so, there's a lot of information out there to help you, you know, understand what kind of use cases could be possible for your business, and, with a lot of blockchains, there are things that you need to be really aware of, is that there could be a lot of friction points, from lack of support, to custom programming languages, to the old blockchain thinking that blockchain's a tear out and replace, and none of this is true, right? Like, with the technology that we built, for example, you can add blockchain to your stack without disrupting operations.
So, and then you made me think of the security aspect of it, right? So, we've definitely covered how it can simplify, streamline, accelerate, you know, many of the basic functions of modern business, but does a company's security profile need to take on, you know, something very new when they're implementing blockchain?
You don't necessarily have to implement public blockchain, right? So, you can implement a private blockchain that's firewalled off and meets your security criteria. You can do that with the Casper protocol. You can also tap into the security of the public protocol, right? So, you can imagine that every time there's a certain number of transactions that are registered to your private protocol, you can then, kind of, phone home and register the outcome of those transactions on the public Casper protocol. This is a unique, you know, value proposition that we can offer because we have a public protocol that these private installations can tap into, and because the data is all cryptographically hashed, you can get some guarantees about the source of the data, but you're not exposing the data itself. So, from a security perspective, it's quite compliant, right? It's very possible to send information outside of a firewall and get a guarantee back without really compromising your stacks or your system, whatsoever. So, I think there's definitely deployments that'll work for a variety of different security concerns and, you know, implementing blockchain technology can also give you a lot of guarantees about who did what, something as simple as the issuing of employee cards, right? If you want some guarantees around, you know, when an employee card was issued, when it was deprovisioned, even putting those kinds of key fob issuance on the blockchain will give you some guarantees around when somebody was onboarded or when they were offboarded so you can secure, you know, your access to your sites even more, right? The security guarantees the security properties of a public blockchain protocol significantly higher than technology that is run just in this given organization because it's not subject to these kinds of white hackers, or even black-hat hackers, that are looking to try to steal the value off the public protocol.
That is very interesting. Okay, now we're gonna look into the crystal ball. We're 10 years down the road, and we're looking back. Where will we be? What is the story of blockchain? You know, what does that world look like, and what does the ecosystem look like? Who's using it and who's not?
I do like to, you know, kind of live in the future a little bit, and kind of imagine a new world. I feel like that's my role in the space is to be a thought leader here, right? So, what I love to see is, like, a brand-new class of transactions known as consumer-to-consumer, right? Right now, we know B2B, and we have B2C, but I see a whole new class of C2C transactions where you no longer need a central entity to negotiate a transaction, right? And you can think about decentralizing something like Uber, or decentralizing Airbnb, or a decentralized, you know, fruit and vegetable marketplace where I can I find somebody in my local area that maybe has more lemons, and I need lemons, and I can just walk up the street and it can be a crypto transaction, and I can discover this and transact with this person. It all happens by the blockchain, right? So, this notion of, kind of, bringing things back home to the original barter system or community, where you don't need these large central entities in order to transact economic value. You can do it just using the blockchain. I hope that our regulators will provide us clarity on the treatment of crypto assets to enable all these wonderful things to happen, and yeah, I would love to see greater adoption of public blockchain, right, and financial services, as well. Yeah, so this is kind of like what I see. I don't know if it's 10 years. It might be longer than 10 years, maybe 20 years, but I definitely see it coming.
Let's close out with some advice for our listeners. If they're still not sure, maybe they just wanna explore, you know, blockchain applications a bit more, what do you think they could do? Where should they be going to find out more information, or reading, or learning about, just to start educating themselves, because a lot of people are like, "Well, I'm not gonna propose this until I feel very comfortable with it myself," so how does somebody get up to speed?
There's a lot of reading material available on blockchain, right? There's a lot of news around cryptocurrency and blockchain applications. You can go to a lot of the websites for companies like ourselves and others in the space and read up on their white papers and their use cases to see if there's a use case that fits you. You can also, because it is open source, you can actually spin up a small pilot team if they wanted to spend-- you know, do a quick hackathon within your organization and say, "Hey, go ahead and, you know, download the Casper node, and let's go ahead and spin up a small network and play with it," and your developers would be thrilled to do this, right? So, it's a great opportunity for them to learn, as well as for you and your team to explore the possibilities of it. [gentle electronic music] Of course, there's always the Bitcoin white paper which started everything, but that's more about cryptocurrency, but it will talk about the underlying technology, as well, and how it works.
Medha Parlikar, CTO and Co-Founder of CasperLabs, thank you so much for joining us.
Thank you so much for having me on. It was a pleasure. [gentle electronic music continues]
Turns out blockchain isn't so complicated, at least not conceptually. Thanks to Medha's blockchain black-belt expertise and patient teaching, I could confidently say that blockchain seems to be here to stay, and I think we've learned enough concrete tips for anyone to be able to get started on their enterprise journey, if they haven't already. I can't wait to see what Medha and CasperLabs works on next, and I'm so excited for the future that Medha's painted for us, all powered by blockchain. [Innovation Heroes theme music] Thanks for listening to this episode of Innovation Heroes. It's official. We've made it to the end of season three. Thank you to all our dedicated listeners for coming along for the ride. We're taking a short break, but don't worry. Innovation Heroes will be back in a few months for season four, so if you haven't already, subscribe now so you'll be the first to hear when a new episode comes out. Until we return, keep innovating, heroes. [Innovation Heroes theme music] If you enjoyed this episode, then consider being our hero. Smash that like and subscribe button to Innovation Heroes, wherever you get your podcasts. Innovation Heroes is a Pilgrim Content production in collaboration with SHI. Our producers are Tobin Dalrymple and Jessica Schmidt, with production assistance from Carmi Levy, Amanda Scheffer-Cavanagh and Ryan Wetter. I'm your host, Ed McNamara. This episode of Innovation Heroes is brought to you by the LastPass identity management security solution and the new GoTo IT tools, making IT easy. Start doing more with less. Visit lastpass.com and goto.com to learn more.