Q&A part 1 | Jack Saba

Yeah.

So I was thinking about banks. So for instance, there's a guy who wants to send illegal money to, I don't know, like ISIS.

Yeah.

So the bank will— nowadays the bank would check where the money is going to and stop this transaction. How would this happen in blockchain if the guy directly just To send the money to—

Yeah, and the way that the banking system is going is it's moving away from public blockchains like Bitcoin into permissioned blockchains, where you have to be a known entity in order to interact with it. So that person would have to have a bank account and sign up, and so what it actually does is creates— what you're talking about falls under anti-money laundering laws of sending money to places where it shouldn't go. This provides a more efficient way of doing it because they'd be known entities, so it would say, Okay, this money is going from this account to that account. We know that this account is someone that should not be interacted with, and it would stop it before it's facilitated.

So the identification of the illegal receiver would be like blocked?

Yes. Another question, so about the transfer, there's a service called Trustwire.

Yeah.

Is it the same thing?

Is the blockchain just from— I don't know their backend, but the principle of going currency to currency is what the blockchain enables, but it takes out the cost associated with going from dollar to dollar and dealing with foreign exchange in the middle. Because the forex people in the middle will take a percentage, and it'll take time to clear. And if they are using the blockchain, then it would go Foreign exchange to digital currency to foreign exchange much more efficiently for a lower cost. Does that make sense?

You said that each node of the network contains a copy of all transactions. Let's say the technology spikes, what do you do with the data? It will be a terabyte or 2 terabytes, how do you store that data?

So the blockchain, so Bitcoin's been around since 2008, and there's hundreds and thousands of transactions every day. The entire list, or the entire ledger, is only 64 gigabytes long. So the way that it adds information is it doesn't take the entire record and store it like cloud computing. It hashes and takes pieces of information, groups those together, and then commits them to a block. And then that block is what everyone has. And so when you want to go in and receive a piece of information, you put in the hash and it pulls it out. So essentially, The evolution of tech, the evolution of computing went databases, and that was like the first big breakthrough in computing is that you had the ability to store and pull on information in databases. And then it went to networks like the internet where you could find information. What the blockchain is is a network of databases. It enables them to pull information from other locations and store the hashes in one succinct place so that you can always find that record.

So if I want to be a part of blockchain today, who will approve my eligibility to be on the blockchain? Like everybody has to agree upon that?

No, so if it's like Bitcoin, right, if it's the Bitcoin blockchain which is completely open, you can just join. You can open up your computer and you can run a node and you can operate and you can facilitate and you can transact.

So for instance, ISIS, who will identify that individual as not okay?

So you can't do that in the public blockchain, right? But what you can do is trace. So if it is known that this person is someone that should not, and you kind of see and you flag transactions, you can trace the origin of the money back to the person that's sending it. So the best example is, do you guys know about the Silk Road?

Yeah.

Yeah, a little bit about the Silk Road? So the Silk Road was this deep web site where you— on the deep web, this website where you could buy guns, you could buy drugs, you could buy hitmen, you could do all these crazy things. And the way that they were transacting was with Bitcoin, right, because Bitcoin provides anonymity. So eventually the Silk Road was shut down, the FBI came in, shut it down, they grabbed the guy, and they seized like $21 million worth of Bitcoin or something, right? These 2 FBI agents were dumb enough to try to skim Bitcoins off the top of the take. So they tried to take $2 million worth of Bitcoin, but the principles of traceability now factor in. So they moved it around and they moved it around, and without knowing how this stuff worked, they tried to exit. And as soon as they exited, the FBI agents were like, all right, well, it was you guys trying to do this, and now you're arrested. So they've been probably taking from seizures like that the entire time, but cash doesn't provide the same traceability that the blockchain does. So in the case of sending money, If you start to see the pattern that's going somewhere it's not supposed to go, you can trace it back to its origin and find that individual.

Cool.

Any other questions?

I wanted just to address the question with the medical. Are you allowed to have a temporal access? Like you can give somebody access but only for 10 minutes and then you don't want them to have access? Yeah.

So the thing about the blockchain is it's just code. It's completely just code, and so you can code these things that are called smart contracts, which is just logic that you put in, and based on certain inputs you get certain outputs. And so for this, what you're asking is, if I wanted to, you know, I was going into the hospital, the logic could be provide Dr. X with record for the next hour.

Yeah.

And then after it becomes more secure again and he doesn't have access to it again. So that idea of smart contracts, which is you can self-execute terms of agreement without having to have any input, will enable the Internet of Things to truly take off. So right now the Internet of Things is this big possibility of devices talking with each other and interacting autonomously. You get a vending machine upstairs, I buy a Coke, it records that it needs to refill the Coke so it pays for the refillment of it and then it gets brought in with everything else. It's currently stifled because of centralization in cloud computing. Cloud computing is the only way for it to happen now, so all the devices have to talk to, say, IBM Center, and then facilitate out, and it creates bottlenecks and it slows things down. The blockchain and smart contracts will enable each device to be an individual entity, holding its own currency and interacting in its own way. So it'll use smart contracts of logic saying, okay, if this device is in this room, this comes in, I know that I need to refill, and then it sends the money out to the location and then it gets ordered back. So this concept, there are these really big concepts in which there have been, that are now the solution to inefficiencies in the market. So cloud computing created an inefficiency in IoT, the blockchain is now going to distribute the network and not create bottlenecks, enabling this to grow. Any other questions?

Yeah.

So if I'm a medical tourist seeking treatment in another country, am I able to upload my medical history from other doctors in order for another doctor in, say, Australia or Manila to have access to my information?

Your medical record would exist, and then as you get there, you'd be able to pull on it. So anywhere in the world, as long as You have— and again, this ecosystem is very young, so a lot of these things have not been created, which means there's a lot of possibilities for you guys to build new products. I think that as you think big, you should think about how this technology can be applied. So in your instance, yes, you can pull from that information, but that record needs to be created first.

Right.

And that's the issue about like the chicken and the egg, and all these people that are in emerging markets are saying that they don't have the infrastructure. The thing about emerging markets is they don't follow the same evolution of technology that we do here in developing countries— in developed countries, right? They leapfrog. Countries around Africa, they didn't go from no phones to landlines to cell phones, they went no phones to cell phones. We're gonna go from no record-keeping systems to the blockchain, and that's what we're gonna be doing in emerging markets, and it's gonna create stability, transparency, and eventually prosperity.

What do you think about the idea of a blockchain for the government?