chainlink pharmaUsing Blockchain for Supply Chains

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whats going on in the broader industry both you know with industries themselves but even so the broader community people working blockchains to figure out what are the standards were going to use so that we can take things like these cryptographic proofs these RFID standards and say this is what were going to all agree a con to be the basis for the for the stuff thats going into the blockchain I think about what were doing I think about it always at two levels right so what is the underlying blockchain foundation and then what is the solution that were building on top of it and I think within each of these we need to be thinking about standards and interoperability and with blockchain its more important than its ever been with any technology before because blockchain is so fundamentally based on how do we engage this broad diverse untrusting group of folks so now weve covered blockchain and distributed energy weve covered blockchain in music and now were covering blockchain in in supply chain really pleased to introduce our moderator tonight Michael Casey Michael is the senior advisor for blockchain research at the man MIT Media Lab and Im thrilled to have him so please welcome him thank you yeah itll do I have to crouch no I think itll work its good yes were fine hi everybody thank you for coming out great to see everybody its a beautiful day outside so you know I actually appreciate the the effort of actually leaving the Sun to come inside here look Im just a little bit about me my backgrounds I think it helps to frame some of these things I was a journalist for a long time dont hold that against me 18 years at The Wall Street Journal but the very first job that I had in my life was a one-year stint in the audit department of Deloitte I was an auditor an accountant oh I hated it I absolutely loathe that it changed my life by virtue of discovering that was definitely not what I wanted to do with my life and I traveled and lived in strange places like Thailand and Indonesia and became a journalist into the whole of things and my life has gone full circle I ended up leaving the journal joining MIT and what is at the center of my life a ledger right its the blockchain is a ledger its nothing more than a mechanism for record-keeping so I find this kind of ironic I do try to tell people though that this is the sexiest ledger in the world there there really is something quite unique about this ledger and and that we should celebrate this in the same way that I also think that this could be a moment of the joining of these forces because supply chains have been this sort of untold story of manufacturing for so long in fact they are the bread and butter the underlying you know infrastructure if you like of the global economy and they become all the more complex and all the more important the way we manage them as the world has become globalized and yet nobody really thinks about them very much they just kind of like theyre in the distance and there is various logistics people and different you know companies that worry about how the supplier arrangements are managed and and and and you know which credentials and permissions are used to participate in these relationships and yet the information that is shared across them are so important to how we logistically bring all the stuff from the ground to our tables or to our our homes and and now I really believe that with this technology this potentially more transparent approach to the way that we share information across the members of these supply chains we are kind of making it sexy its its its its the visibility and the information that the richness of what we can draw out of these supply chains now the dynamism that could tends to be brought them that I find really exciting so just a quick couple words on why a the blockchain potentially could could do this the blockchain as far as Im concerned is a mechanism for collective action amongst entities or people who dont necessarily trust each other but have a common goal so Bitcoin was created for this purpose everybody wants to share in the vision of a currency a common currency but knowing whether or not the other person has digitally counterfeited their money has double spent it in the words of the Bitcoin community was a concern so Satoshi Nakamoto the inventor of this particular model was able to create a system whereby an entirely decentralized community of computer managers would maintain this ledger and prove that double spending wasnt happening so the common goal of looking after this currency could now be managed not by a centralized institution like a bank but rather can distribute it amongst an entire decentralized community and thereby resolving this fundamental problem of trust because until that moment this this core aspect of human society that the key piece by which we enter into exchange and form relationships Trust has been managed by institutions centralized institutions that look after the ledger on our behalf banks are the classic example of this and that worked relatively well I think the the the the arrival of banking as the intermediaries into our payment system in the end of the 15th century when the Medici did this pave the way through to the Industrial Revolution the modern world but the the this core problem of centralized management of that information was was sort of fundamentally limiting it had instability associated with it we meant we had to trust these parties to maintain the ledger so now we have this capacity to have that information managed in a decentralized way where no one single entity controls it and once you reach that point you had this capacity for all the participants in that community to trust each other because they dont have to trust one of them in particular they can trust this collective system that that through an algorithm that maintains their search for consensus allows them to maintain and update this ledger on an ongoing basis without this dependence on a centralized party and the reason why this has become very important for supply chains is because it actually is one of those quintessential environments where this problem is is pertinent you have entities who have a common interest in ultimately producing as many and selling as many of a particular good thats going to be either finished good at the end of this line but at the same time are separate from each other and therefore do not necessarily have trust because theyve got business relationships which are juxtaposed in various ways so you have this this I think you know we will think about where blockchain applications are most relevant its these environments where there is a common interest a common goal but but a lack of trust or the potential a reason not necessarily to trust each other so now we have this capacity to bring these two ideas together and and when you unpeel the onion of what that means whereby the visibility the capacity to share information about the production processes of each of these lines in a way that now everybody can presumably trust is not going to be exploited against them you start to really open up possibilities for efficiency for you know management of resources for you know understanding where the things we buy come from sort of food safety all these concerns can be can be dealt with and were going to discuss all these in this pan so Im gonna start it up though by introducing these guys who can introduce each of themselves but that bill Macbeth why dont you come up first and tell us a little about chain-linked and and and take you from there Thanks Im gonna attempt to untether myself from this podium here a little bit thanks so much Michael so Im a chief research officer and also co-founder of chain link research we were founded in 2002 to mostly focus on supply chain and the links in the chain hence chain link we also cover IOT and more recently blockchain block chains been on our radar for many years but the last about 18 months ago we decided this is getting serious we better start covering it and then about six months ago I approached the enterprise forum and said we should do a session on this and they agreed and so hence was able to it we were able to organize this fabulous panel so Im gonna in the next six minutes attempt to give you kind of an overview foundation setting for those of you familiar with blockchain it may be a little redundant and same with supply chain but usually theres not much of a that big of an intersection in that Venn diagram so what is blockchain this is our definition be interesting to see if the panels agrees secure immutable decentralized shared ledger and so lets break that down first thing it is a ledger but its more than traditional transactions you can record Internet of Things information or sensor data or any data that you want to encapsulate but it does have a sequence and a time that is is bound in there so nobody can start saying something happened in a different order its shared so shared across usually a network of entities it could be within one company but its real value is when you start to getting multiple players as Michael said that dont dont trust each other and its decentralized so no one party has control of this thing and multiple parties have to agree that hey whats in here its verified by multiple parties so that everybody can trust whats in there that verification happens via cryptography and things like hashes and digital signatures and we can get into some of that if we want to during the session but that makes this the fact that you have multiple parties that are all keeping their eye on this and use this cryptography it makes it very secure one of the most secure types of databases weve seen so far and that makes it also a mutable so what that means is it cant change those are the rules if you make a mistake when you write a record you dont delete the record or modify it you have to put in another record that backs that one out and puts the right data in or some some mechanism have to revoke a record and then and then put a new one but you cant delete a record or change it so thats the characteristics now a little bit of background most of you probably associated with Bitcoin which is a cryptocurrency there are now over a thousand crypto currencies but Bitcoin was really the first one but it built on technologies at about there in many cases for decades all of this cryptography the hash hashing algorithms this Byzantine fault tolerance and proof of work thats been floating around out there and then just when you get into this youll see there are many different theres well the dominant ones are Bitcoin aetherium and hyper ledger and then theres many variations theres also private or proprietary block chains but theyre all different and in particular in the consensus algorithms makes a huge difference in the amount of horsepower it takes to validate a transaction how many folks it takes as well as the amount of time it takes so the characteristics of how these perform is really important to understand when youre trying to figure out what blockchain and IBM and the other people in the hyper ledger community have put together a really kind of an open framework so you can plug in different consensus algorithms and so forth the public versus permission is really important I think especially for supply chain because people think of Bitcoin where youre anonymous and a supply chain most supply chain applications that doesnt work you want to know who youre dealing with and you want to know that with confidence so permission supply chain plus you dont want your transactions to be visible to everybody you want to say hey me and this small group of people can see this I dont want my competitor looking at that as well and then the smart contracts was really introduced Bitcoin had kind of a weak version of that but if theory amaz the first one to explore that deeply and thats the idea that youre embedding when an event happens within the supply chain the smart track car track can be automatically configured its a pretty powerful concept whereby you can start to automate actions based on very reliable discussion of events thats happening in the supply chain theres this whole discussion about what belongs on the supply chain and off as I mentioned its its pretty expensive in terms of compute power to to store things on the supply chain and to do on these smart contracts so people are kind of figuring out now a lot of this stuff maybe should be off the supply chain but what on the blockchain and what belongs off and the last thing and youll see this as we talk through the what the various folks on the panel Sarah are doing blockchain with the exception of crypto currencies that rarely stands alone its almost always combined with other technologies to get something really interesting done so now wheres blockchain useful Michael touched on this a bunch where theres lack of trust youve got unknown suppliers and and you want to start working with them quickly instead of having to go through a long drawn-out vetting process where youve got many parties who want to see the same single version of the truth and weve seen other people tackle this problems through a centrally managed a network architecture where you know everyone plugs into the same network but that has its own limitations this is a way that you can make it sort of more open and that helps with disputes a lot because now that youve got this immutable supply chain theres a record that sits between us it says this is what happened we all agree and nobody can change that so it really reduces the amount of time spent arguing about what actually happened and then also where there are serial steps of paperwork theres a ton of that in the supply chain still depending a lot on paper or emails if its not paper and and so that also is a valuable place and also where the reliability and the visibility of the events you want to reliably record events you know record the Chain of Custody and things like that whenever audit ability is important and this could be in highly regulated supply chains or where you want social responsibility like say we want to know that these diamonds did not come from a you know an illegal source and supporting a conflict that would ease one example of provenance and you can do those kinds of things with supply chain last but is whatever fraud and tampering is and data tampering is a problem right because supply chains are great you got all of these people watching that data and making sure only valid data goes in there and nobody can mess with it so those are kind of the characteristics and to wrap up well this is a slide from Microsoft which you cant read but its its a whole bunch of use cases its probably one tenth or one fiftieth of what people are looking at out there IBMs got a list probably longer than that so the applications weve talked about chain of custody tracking this is traceability Andy counterfeiting and those comes I think is great for a keeping track of whats going on as stuff moves through the supply chain for global trade enablement so youve got a lots of documentation that could be moved from paper onto the blockchain to help me things go faster as well you know things like tendering loads so we all agreed this is this is what weve agreed to and even things like at the ports something like 20% of bookings on ocean carriers dont net dont show up so theyre people trying to and thats really expensive headache for the for the people who run the ports in the carriers people are trying to solve problems like that with the supply chain supply chain finance and trade finance or another big area I know IBMs doing a bunch of stuff Microsoft did did this stand by letter of credit which is where this is where the letter of credits cuz you dont trust the supplier so you put a bank in between the standby letter of credit says okay now Ive got to have my bank I dont trust your bank and so these things get complicated and supply chain can help really speed that up spot markets and market places for shared resources this is where like we all agree that heres the rate and later on we say well you told me something else a common place to store it we talked about social responsibility cargo security and theft so you really are confident and where your stuff is tracking your assets contract management people are talking about and also know your customer this is a lot of really interesting things going on in ident I D and having a very secure ID a verified ID of who youre dealing with so thats my quick run-through of the kinds of things that youre seeing in supply chain so hi Im Bridget McDermott taking a cue from Michael give you just a little bit about my background before I ended up here at IBM doing all of the incredibly fun stuff that were doing right now with blockchain my first job out of college was programming EDI in COBOL my biggest fear is that people are still using the code that I wrote my hope is that we can use blockchain to change that I see blockchain as being a real transformative opportunity because its not looking at this from one angle right its solving this problem of trust as both of Michael and Bill have talked about and in doing so we solve both a social problem and a financial problem right were solving the problem of inefficient processes and were solving the problem of processes that hurt people and hurt businesses with the fraud with the illness etc so why is blockchain interesting for supply chain well when you think about supply chain historically there have been three key areas a problem that people have looked at and you know Im a little bit over the top and saying that Marco Polo had these three problems but I dont think its that far from the truth right the issue of data visibility what am i what am i transporting and what state is it in the process optimization whats the best way to get it from the place where it started to the place where somebody wants it to be and have it arrive in the condition that I want it to arrive in and finally demand management which most people think of as Supply Management how do I take a product that I want to ship and get it to someone rather than thinking about it as what does my customer want to buy and how do I deliver on that need so these three problems if you talk to anyone in supply chain theyve been working on them probably most people alive today not working on them for millennial but working on them for decades and the interesting thing is when you talk to someone about blockchain being a great solution to these they say well but I dont understand why blockchain solves the problem we can solve these problems and my question then is well if we can solve these if we can solve these problems why havent we and the answer to that is that even though we have the technology to do digitization we have the technology to do data management we have the technology to do distributed systems we dont have or we havent had the technology for people to trust that the information that they share is being used in a way that doesnt benefit their competitors more than it benefits them right and so we have the ability to solve these problems but we havent because were missing one puzzle piece all right like you know how you build a big 1,000 piece puzzle and its absolutely gorgeous like sunset on the water and theres like a seagull flying over and then like right in the middle theres that one black spot because it was like lost on the floor or something and its really frustrating because you dont have the full puzzle it doesnt work and thats what we have a supply chain right now is it doesnt work because were missing not the digitisation not the data sharing not the data management were missing the trust so if we have trust what does that mean well that means we can really start looking at use cases across the supply chain we can say lets look at work flow theres 600 billion dollars of happening in trade every year and I dont even want to know where that money is being spent once the bad actors have it but thats saying if you want to send a container of roses from Nairobi to Rotterdam why should it take you three and a half weeks to do it with one week in Port getting your paperwork ready one and a half weeks on sea and another week in port getting the rest of your paperwork done that information could be readily available we can start getting rid of under invoicing and in there under invoicing and over invoicing we can really transform what happens supply chain visibility know what things are where they are trade finance talked a little bit about that my favorite right now and you guys might have heard about the announcement that IBM made you know in August and the ones that we made earlier this year in June and last year in October weve been working with Walmart originally and then more suppliers and retailers dole Driscolls golden state foods Kroger McCormick mcclain Nestle Unilever I always miss one and I think its always a different one but trying to bring everybody together to say can we collaborate now that we have trust can we collaborate on solving this problem that everybody wants to solve the problem that says 400,000 people die every year from food-related illnesses 3,000 of them in the US with health care costs in the US costing close to a billion dollars for food illnesses with somewhere between 15 and 40 billion dollars worth of money being made on fraud for food there are bad actors in the system and its a small number and there are a tremendous number of good actors but when we say a tremendous number were talking about thirty thousand retailers were talking about a million suppliers were talking about 500 million farmers how do you get that kind of scale together not to mention the four or five seven billion customers how do you get that scale together with trust you havent been a to do it before now because all we solved before was how do you share the information not how do you feel comfortable sharing the information so as you think about these blockchain networks its great right we could transform the world we have the digital technology and now we have the trust technology but at the end of the day you also have to have a solution thats actually going to work for you right blockchain isnt perfect it doesnt say ok I can deliver you trust in a box it has to be built its a tool that you can use to build trust in and building a governance model and building a system that has technical capabilities ecosystem capabilities and business capabilities that match the business needs of what were doing is critical so I Im a Sloan alum so I love coming here this is super fun and what I took away from my time at Sloan is you need to understand the business youre trying to change not the processes that exist today but what the actual goals of the participants in the business are and if you think about that and you think about that in alignment with the technology that were developing you start asking questions about reliability right from a technology perspective do you have reliability scalability security is this going to work 24/7 people need to eat all the time I mean look at what happens when theres a natural disaster it becomes clear very fast how fragile our food system can be what happens with the ecosystem how do you get people engaged governance what are people signing up for who owns the data who can permission the data who can decide what happens to the data and business what does this mean for your business because dont start using blockchain just because its sexy and it is sexy but thats not the reason they use it the reason is that its going to change business ok Im here today to talk a little bit more in the weeds some use cases how to leverage IOT in blockchain to digitize digitize your supply chain so Ill go over a few specific use cases that were working on it chronicled as well as with a consortium that we co-founded called the trusted Internet of Things Alliance so again very interested in kind of your point on the the necessity of community building in ecosystems in the blockchain space so it doesnt just exist as a technology and of itself but theres an important aspect that I dont think is necessarily covered which is the importance of you know building a global protocol or kind of standard system of standards by which we can all communicate with blockchain so topic number one is just a brief overview on the trusted Internet of Things Alliance number two goes into kind of the idea of registration and verification of an asset in the supply chain with tracking of gold or conflict minerals number three is leveraging kind of an IOT device or sensors so in this case a temperature logging sensor for in the pharmaceutical supply chain and or thats number three lets see and number four is kind of the tracking of serial numbers and also the pharmaceutical supply chain so Who am I again Im Sam a little bit about chronicled so we were founded in 2014 with the mission of interfacing real world objects with blotching so we started in fine art and actually I dont know you know who here has heard of chronicled raise of hands not many so a West Coast company but we started actually in sneakers and luxury goods so we were faced with the problem of how do we uniquely identify a real-world object on a blockchain and we got into actually embedding cryptographic microchips into sneakers which is kind of an odd you know two different spaces that you wouldnt expect that but we did that and moved on from that to a smart supply chain solution so the natural progression from just the registration and verification of assets to transfer of custody ledgering in testing to data and then powering machine to machine interactions so as you can read here were again varied weve been committed from the beginning to the open source community in developing kind of global standards and protocols to interface I OC devices and sensors with blob chains and just an overview again of our products and I wont go into it too much I dont have much time but mainly on the software side blockchain adapters so integration of erp systems and kind of standard identification model so like weak identities serial numbers barcodes and QR codes and registration of those you know all the way up into actually producing our own cryptographic hardware or or helping companies to do that as well so first topic in terms of ecosystem building the trusted Internet of Things Alliance we put together about a year ago companies like Bosch Cisco Foxconn etc with the mission of working together as an ecosystem of startups and large enterprises to establish a global protocol and system of standards our belief is that if were all speaking different languages in the space it we will you know not have the added benefits of interoperability across solutions the main kind of five protocol functions that we developed at chronicled and then moved into the trusted IOT alliance where again registration and verification of an IOT device or sensor and then transfer of that object or sensor so transfer of custody if you think of you know digital VIN number and disintermediating the DMV or something like that ledgering data so more data attestation use cases and then the wallet or machine to machine use cases so you know imagine a drone landing on a charging station and making a payment to that charging station so weve developed kind of the apis and primitives for these kinds of basic functions and then you know go into use cases of how weve used them and built business cases on top of them so the first with just simple registration and verification went into you know provenance of fine art or again a Jordan or easy sneaker more specifically so in the gold use case or a conflict mineral we both register the serial number thats on the gold but then also are now putting an encrypted microchip and tamper proof sticker on that gold that is you know destroyed when you peel it off as well as the box that its actually sealed in has a cryptographic identity and all of that is registered and tracked to prove kind of the end-to-end provenance of the gold so you can see just like a simple animation of theres the box with the seal and on your phone if you scan the sensor you see that it has been tampered with and that expert you know event is also registered on blockchain - so ledgering data and the data attestation use cases in the pharmaceutical supply chain specifically you know highly regulated in terms of the temperature parameters between 2 and 8 degrees Celsius a lot of pharmaceutical drugs need to be kept within this temperature range you know sensor data can be tampered with etc so weve co-developed encrypted or cryptographic hardware thats about the size of a credit card that replaces some of the conventional IOT temperature sensors but you know travel with protein based pharmaceutical drugs and the supply chain and you can scan that with a mobile device and also see kind of the registration of the data on blockchain as well and prove that the data is accurate and the last one so again in the pharmaceutical space theres regulation both in the EU and the United States but more specifically the United States called D s CSA which requires that all pharmaceutical drugs are uniquely identified by 2018 by 2023 there needs to be an interoperable system and placed by which manufacturers and distributors and and so on through the supply chain can pass that data down the chain and it also needs to be anonymous so were working a separate joint venture and project with Pfizer Amgen Genentechs and the big players as well as the distributors to build a blockchain based solution to anonymously transfer the serial numbers and identities of pharmaceutical drugs in the supply chain so again not necessarily an IOT use case for blockchain but a very simple I mean obviously complex but simple use case with serial numbers this is just a little graphic and then yeah thank you I think Im a little done with time so thats a little bit about my company and the solutions that we provide thank you thank you hopefully my slides are here so Ill just tell you a little bit about logics I think this is the old deck but we have we have about 300 people weve been building supply chain solutions for some time now so light supply change solutions bill around unique identity of goods primarily products and assets and optimizing business processes within an organization whether its a factory distribution center or a retail store to take advantage of what we call smart assets or smart products the the key to our smart inventory and assets and kind of our core DNA is as we spent a lot of time building item Ledgers for assets products inventory where were keeping track of of these Goods an individual item level and we do that primarily using some RFID technology EPC tracking IDs we automate the process of capturing all that data and then we keep track of all the spatial temporal data and as time series format essentially creating a document or a ledger for each individual asset and whats happened to that on a real-time basis those solutions were primarily based on a single facility so were optimizing within a single plant or a single DC or a single store to optimize business processes within those organizations the the solution has kind of three elements theres an infrastructure layer the infrastructure is how we capture the sensor data all of off the individual items theres a platform a cloud platform layer that that brings all this ingest all of this data all this temporal spatial data and then theres the applications where we make this data useful to our customers it seemed to us that when we started investigating blockchain applications that it was a natural extension of what weve been doing for years because weve been creating these item Ledgers within a facility and we were starting to transfer item Ledgers from one facility like a distribution center to a retail store so that that let that ledger now is extended beyond the four walls of a physical environment and it seemed to us that if we combine that with smart contract technology Bridgette mentioned Marcopolo for visibility and process optimization I started my first supply chain planning company back in 1992 so we had a software company where we were using some constraint based search algorithms to optimize supply chain planning solutions for supply chains so Ive been doing this for a long time and I can vouch that for a long time people have been trying to solve these problems and were really focused on a use case that says okay what is what is the lowest common denominator in supply chain and the lowest common denominator is the shipping and receiving functions because thats the trigger point the event trigger point that triggers almost everything that triggers financial transactions amongst trading partners so we said can we automate can we digitize the the actual shipment and receipt of goods in a way that allows us to share data with customers using smart contracts think of a smart contract as a smart advance shipping notice or an ASN that you can attach in an automated fashion all the individual items and the item Ledgers associated with that advanced shipping notice and on the receiving side be able to receive those in an automated fashion and take over those those item Ledgers thats what weve been working on we think by combining smart inventory with smart contracts and the blockchain we we can really change what people have been some of these problems people been trying to solve for a long time its not easy the sorry the future of the the supply chains I mean might you know I envision the the supply chains of the future are going to be much like uber youre going to have a bunch of dynamic driven demand and youre going to have in in and and youre going to have customers that are driving that demand and so you have to be responsive to that demand on a real-time basis but instead of your providing a service which is people driving around in cars which represents supply supply will be represented by products and these products will these these supply chains will be self-organizing theyll be intelligent theyll be able to be demand driven and all of these things require automation connectivity and intelligence applied but its its not real its not easy as it sounds because while you have some ambitious goals of improving speed or velocity more flexibility and agility improve visibility self-optimizing self orchestrating the challenges associated with doing that with physical goods you know the beauty of blockchain is it works perfect for digital assets right think of lots of use cases around digital assets but now when you start trying to apply it to atoms instead of bits it gets a lot more complicated how do i digitize those goods how do i what are the data standards that were going to use associated with trading those products amongst trading partners and these these known parties that we do business with how do I interconnect and and what are the how do how does it scale globally and how do I apply intelligence with this massive amount of new data and we think you know through automated capture of sensor data on smart products blockchain technology which which effectively represents the connective tissue we think of it more as a a index of goods that have you know its sort of a skinny index that has pointers to fat repositories off chain that are maybe permissioned or unfirm ition private or public and these massively scalable cloud IOT platforms that Microsoft and Google and Amazon and IBM are building all of these things provide that was for you Bridgette sorry I didnt want to leave you out yeah yes and and now you have all this data available of ass digitized data available and you can really start applying artificial intelligence and machine learning and do things that weve never been possible things that weve been talking about since the days of Marco Polo so thats it this the inception for this company came out of a project I worked on at the Media Lab in 2014 it was a conference we did called identity trust and data and for me this is my eighth company this particular conference we did I had an epiphany and the epiphany was about whats the supply chain and I want to step back and say why so Id really believe whats happened with the internet is this pendulum that swings okay over on the over here are the inventors the creators the musicians the artists over here are people who buy stuff and I think what weve looked at for the last 20 years on the Internet is essentially an anomaly I think certain companies have actually than land grabs on the internet and I started this company to actually help fix that problem so next thing is Im the last person to talk I just want everybody to know that supply chain is sexy and its fun and its about beer so yeah as I started talking about all these use cases and it all fuzzs over just think the presentation almost over beer beer so that that will happen later and interestingly enough MIT how many places in the world can this many people come together and make something like supply chain sexy I mean Jay Forrester was a giant and I think this overhang is everything we do here ok so I wanna give you sort of our philosophy on supply chain everythings a supply chain youre a supply chain every idea you get is a supply chain every idea you got started when you were a little kid its the things that you learned and ultimately here you are at MIT or a student maybe your inventor it may be an entrepreneur youre a part of a supply chain ok we think theres a supply chain for everything and its not only physical things but its also digital things so the backdrop to everything Im saying is the pendulum is always swinging and if it works properly we will derive the maximum value out of our lives so I think this is where supply chain gets really personal you know okay so blockchain you know its pretty new technology the Epiphany I had at the identity trust and data conference was wow thats a technology that should be mind and and and I dont mean in the sense of a minor from a black chain perspective it needed to be mind so its a key component in a solution Ive basically made my career making enterprise solutions that are at scale the basis of internet standards and stuff so I I kind of bring that dent to what we try to do and you know Bill when you started off talking about components here so it context labs we see blockchain as a key ingredient that goes into a solution for weve done theres this idea big data ingestion youve cut it a Destin ingest massive amounts of data in real time youve got to cleanse it and curate it theres a lot of noisy data cryptography is embedded theres machine learning weve developed track and trace fraud detection all these bits go into making something that somebody buys so were not just talking about this thing called blockchain were talking about a solution that can actually swing the pendulum back to those who create the value thats why were doing it okay everything that happens is a state and theres a reason were called context labs its because theres a context in every state is a ledger event or a transaction okay keep that in mind and then all states have a connected context so we bring I think a different point of view into what supply chain management is so this context is if my clicker would work well so whats interconnected and as I roll back to why we did this we were working for about two years on on what we call innovation dynamics which is essentially a network graph of how innovation works in economies and ecosystems so what we did is we said okay for supply chain each one to think of a network graph each one of these things who what when and where these are nodes the interconnections on those nodes are the edges so we believe next-gen supply chain solutions integrate blockchain with network graph analytics and then this is what we built as a company okay so we have seven minutes on like you know Im gonna give you three examples of deployments we have a context labs okay and Ill try to go fast we do two things we essentially model and design ecosystems and that intersects into applications that get built so weve built something called innovation scope that models ecosystems weve modeled Cambridge versus San Diego for biotech for example weve modeled Amsterdam our companies based here in Kendall Square and in Amsterdam and then on the product side you know weve got productized solutions that are based on the technology so three reference implementations Im going to speak about today one is in publishing its in books and the printing of books in the supply chain of books one is in music and one is in environmental data something I dont have time to touch on is work in process where weve got chain of custody for custody for data veracity for firmware every everybody in here right now is in their pocket millions of millions of lines of code of firmware how do we know its the right firmware when were driving an autonomous car how do we know that what we downloaded is trusted so I think this has a great opportunity so I want to talk about the first one which is physical book publishing you can see back in march 2016 i remember this this inception started it the identity trust and data conference at the lab we hacked for two years and then iterated ourselves into a deal with the company that actually probably most people havent heard of it but its the largest printer of books magazines and all that junk you get in your Sunday paper they print all this stuff so we so we did a deal with these guys to you know we announced a deal for blockchain and abled capabilities for publishing publishing is super old school you know Gutenberg mid 1400s okay so no blockchain in the 1400s this is what blockchain looks like today our solutions deployed in factories around the world with this customer they print upwards of 800 million books a year theres a partnership thats been announced with them us and Hewlett Packard and its called intercept from Lakeside communications so blockchains real you know like theres this its not this ephemeral thing right it actually can produce stuff on a big assembly line go faster so what happens you know when I talked about the things that come together to make a solution well we make these dashboards that help you find needles in the haystack for fraud for example so when I talk to network graph analytics people who are into that here you can see the graph and the graph it has an identity the every every transaction that happens is tracked and all those things together bring a context which actually can show us who the bad actors are I must get that okay music music Im a trustee at Berklee College of Music I love music of play music since I was a little boy there was a cool article on what we did there in Wired which came out like two days ago music industry bands together finally get paid online this is something we did at our company which we threw in the innovations scope ecosystem development about 200 members basically all the streaming players Spotify YouTube etc and all the big labels okay what we drove theres a common theme here which is interoperability we drove towards what we coined the mvi minimum viable interoperability this means that data needs to be transportable and trusted in its own right and if you do that composers can get paid through the convoluted permutations of supply chain distribution for music okay this ones cool this one weve got a partnership with one of the the worlds largest NGOs for the environment Im gonna skip that because Im out of time does this look like blockchain this is blockchain blockchains behind this essentially every type of data that gets ingested you know this whole thing about fake news we say no fake data so weve deployed blockchain for fake data there will only be no fake date on the environment and that will act from our perspective move the pendulum back to those who want to save the planet okay Im done Ill skip because Ive gone over thanks very much thanks Dan actually Im actually gonna shoot to the to Dans at the end here because Dan dolls you you you talked about the challenge of taking this this digital record and and and interfacing it with bits and atoms so you know Bitcoin really truly was digital assets digital digital stores of value being shifted around and now we have to interface with this real world I want the two of you to think about and just to explain how we go from this thing I like this concept of the perimeter of trust that the blockchain is it resolves a trust problem here but we still have to ensure that the data thats coming into that blockchain is something that we can trust and Dan youve got interesting solutions with your graphs that stand half-over then you know youve grappled with this as well just talk to us a little bit about this challenge and and how do we ensure that there is sort of a standardized approach to it the collection of the data as it goes into a blockchain either one the Dan and Dan Dan dolls you first year because were both dan exactly its just you can just whoever moves first well this is really I mean I think this is really the most challenging part of implementing blockchain on supply chain and and to a certain extent even goes beyond blockchain its really about you know if youre interested in global visibility of your your products and you want to make those products globally available how do I do that how do I get real-time data there is you know in the last few years some things have very have changed fairly radically in terms of embedded sensors in particular little passive RFID sensors that can be embedded into goods today we embed we we have projects with several luxury brands like Louis Vuitton who is embedding sensors within their all of their leather goods so that that that product now has a digital identity it has a digital signature and that digital signature can be used to not only I authenticate the product and protect the brand but it also can be used to track and manage that product as it goes through the product lifecycle post you know your traditional PLM system which usually starts at the design process and runs through manufacturing that product lifecycle really extends beyond manufacturing because the product exists through distribution and supply chain through whatever your your retail channels are and ultimately with the with the consumer itself so today what we see is is that most especially in the retail world because the sensor prices volumes the sensor volumes have gone up to I think its the RFID sensors are over 10 billion units a year now which makes it the largest single IC being produced and prices you can get fully full tagged with inlays and chips printed on a laser printer for less than about 5 cents apiece now so it enables you to create and attach digital signatures to these physical things that then can be collected and thats thats really important you can use and authenticate and certify these these Goods and attach them to these processes these business processes that ultimately can be written to the supply chain and you know one thing I would I would just add and we talked a lot about trust as being the driving factor for a lot of these adoption of blockchain but its more than just trust its its one version of the truth and and and for the most part what we see is is a big a big game changer is that one version of the truth because then you know as I the example I used with the shipping receiving that works great when everything you you said you ship the other side of the party says I received but that almost never happens what happens generally is theres exceptions or claims or chargebacks that occur during this process and you get into this process of hey I shipped you this and you said that you didnt receive at all and and and the the other side of the transaction the trade partner will say yeah I didnt receive it and theyll say yeah well yes you did we shipped it and it was yes you did no you didnt yes you did no you didnt and this is the standard process for resolving claims in in in the supply chain today and if you can automate that process by digitizing and automating the not only what left and what was received you can start removing the latency that exists within the supply chain and and latency is is is theres a lot of places for latency like in the ports for instance but theres also a lot of internal processes that create latency as well and and thats you know the that keeps you from being able to optimize your supply chains and yeah I mean this is look at the RFID solution these theres now high tech that low cost but theres this broader issue in some respect as well about yeah how do we actually trust that data and youve got this graphical way of thinking about that um first of all if its on the blockchain it doesnt mean its truth you know like its totally not a BG job a job yes I mean its a big misnomer about blockchain our view is that the definition of truth and reality is in a proof which should be cryptographic so there are multiple proof points for a given event so we our API is called proof work so what it does is it looks at different events and those are configurable so for the music business you know what we did with the open music initiative is establish this API called minimum viable interoperability 1.0 and that has elements of what could what constitute truth and so when a given song take an MP mp4 or mp3 file goes to the supply chain as it gets registered there are multiple points that say yes thats the real thing and then those are bound into essentially we call the thing a Noblet which is a live piece of content and its cryptic laugher cryptographically bound with n amounts of proof points so you ensure the validity and the certainty of your thing or your data so you know we think theres a way you approach it from the computer side do that and we were approaching real-time I mean not weve got blockchain implementations that run about 80 X the throughput of for example what Bitcoin does you know what the Bitcoin environment does so I think the real-time nature and you guys have been at this for four years you know but part of what were doing is were not benefit burdened by the fact youve already got a company you have to actually you know keep shipping and stuff so new ideas can actually be deployed in a way that I think wasnt thought of before you know so that so we talked about these yesterday at the hack for climate thing how do we ensure that 17 different cities when they do their hacks are gonna actually have transportability on their data well lets ensure that we have a common proof on the data and then we can share it you know we can trust the data just to add to that so a couple angles one I want to give one more example which will help illuminate how physical events can get recorded reliably on a blockchain and some of you may have heard of the company ever ledger with so what they started was in tracking diamonds to ensure that theyre not conflict diamonds right thats the purpose of it to make sure youre not funding illegal mines so the first thing that happens is app at the mine they take something like 48 different measurements with these pretty fancy machines so this is one extreme where youre willing to invest in these high-tech machines that can do I dont even know the type of analysis how it reflects light and the weight of it and all these different things that are hard to fake that all gets digitally signed by some trusted person - as well as the machine and Im gonna get back to that about do you trust what the machine says at the other extreme of the stuff that Dan doles was talking about which is you got a five cent RFID chip thats not going to do its own digital signature its just not doesnt have the horsepower but the reader potentially could could be authenticated as thats thats actually the reader its actually in this location and it and so what we see is identity management which we usually think about as as confirming the identity of people its also being extended to machine right so this is the machine that has this private key so we know its this machine only yet can sign this data and now you can be confirmed of that and that together with potentially digital signatures by people who you trust can start to create data that says yeah this week this data as as Dan said has multiple proof points that says this thing actually happened so this is a term that Ive been using a business it comes from a good friend of mine Pindar Wong some of you read the article about that he and I wrote for the Harvard Business Review and Pindar is working on some standardization approaches to supply chain management through the blockchain and hes come up with a term KY m which is a play on K way see those of you who know your financial services needs is know your customer this is know your machine right and it is its interesting that this concept of identity is going to be critical but I think Dan said something dan dan half Allah is important this cryptographic proof points are really powerful but there has to be this this social Accord around what they represented the one things is really interesting that the blockchain is its not it forces us to recognize that the truth is always a subjective thing its just that theres a consensus around that war with what that is and its a very liberating concept when you get to it the thing is though we need to find this consensus and when we move outside of the chain and the consensus process we need actually sort of to find these standards so Id like maybe you know Bridget you could talk about because I mean youre there at hyper ledger which in itself is an attempt to try to sort of come up with things like standards and so forth whats going on in the broader industry both you know within industries themselves but even so the broader community people working blockchains to figure out what are the standards were going to use so that we can take things like these cryptographic proofs these RFID standards and say this is what were going to all agree akan to be the basis for the for the stuff thats going into the blockchain I think about what were doing I think about it always at two levels right so what is the underlying blockchain foundation and then what is the solution that were building on top of it and I think within each of we need to be thinking about standards and interoperability and with blockchain its more important than its ever been with any technology before because blockchain is so fundamentally based on how do we engage this broad diverse untrusting group of folks and when you do that you need standards you need interoperability you need access you need it I mean its an ease of use problem thats not just about the interface its about the entire user experience so if we start with the underlying layer when IBM started looking about two years ago at how we wanted to get into blockchain we thought about from an enterprise perspective and we said well having worked with a lot of enterprises the most important thing for us is open source and open governance right open source is great if you can see everything but if one person is making the decision on what is in that open source as the CEO or whatever of a company I dont feel confident that I have sort of control over what could be happening with the foundation of my technology and so Linux Foundation obviously gold standard in building out open-source that was we were excited to join with I think at the time 17 other companies and now a hundred and fifty or something like that who are building out open source open governance but that in and of itself right is not enough right you if you are building if youre building out blockchain but reinventing everything that goes around it you will never be successful and so you need to be thinking about how does this standard whatever it is and I mean hyper ledger fabric is not the only option out there but its the one we prefer because of open source and open governance but having built it on this standard how do you think about interoperability with an S AP network with EDI with all of these networks that already exist and how do you leverage the fact that that happens the same thing though happens in the solution layer where you start saying why would I possibly reinvent the wheel you know why not take if Im you know I talked a little bit about food safety there is a gs1 standard that has existed for decades in consumer products and food and were actually gonna mean Ill pre announce this tonight were making an announcement tomorrow with us Microsoft a few others why not use gs1 because its a really good standard and a lot of people are already using it and if you use that as the basis of how youre thinking about blockchain you simplify what youre doing and so as we think about building out these networks its less about reinventing how to do things and more about concentrating on taking all of the things that have been done so well before I mean my favorite thing about blockchain itself is that it wasnt actually a great technology innovation it was a brilliant innovation so dont get me wrong but it took a lot of cryptography that already exists a lot of distributed systems a lot of data management and it sort of went like this and was like wow it would work differently if I turned it all around and did that and so weve got this foundation that even though blockchain is this new technology that we can experience and we can use in different ways its not like something like quantum computing where theres 25 people who actually understand and you need like supercooled Newton ice nitrogen to make it work this is something where in every University every company there are people who understand the cryptography understand the distributed system well understand the management and can think about how to make it better by pulling in existing standards existing products existing capabilities and that is going to get us to the scale because that is what blockchain success is about is building on this momentum so that we are building both the blockchain infrastructure so that the tools the capabilities to develop solutions to develop the governance to run to operate these systems and then to the solutions that actually use them we need to be solving these problems not Riaan the wheel you know that the fact that you sort of talk through the the multiple facets that go into the blockchain and how theres components to it and I do think that sometimes theres a simplistic view of it as as a sort of a monolithic technology and its all these different pieces and what that therefore means is its to me a social technology which is to say that its a mechanism and the game theoretic components of blockchain are arguably more important than anything else right quickly in the Bitcoin world where its an incentives game its its its a its an attempt to sort of play with what people will dont want so theres this socialization aspect to the building of a blockchain you cant just put it into nowhere and hope its gonna work you need everybody to agree to the rules thats at some point right its certainly at the beginning so Sam I was thinking because youve been in this fairly early on and youve tried out a number of these different implementations can you talk to us a little bit about what that experience has been in terms of hurting all the cats in terms of getting all of the participants within a chain or within an ecosystem within an industry to to participate what do you what do we need to do to realize some of these goals in terms of that gathering of consensus to actually participate yeah certainly I mean so kind of going off of what IBM is doing we similarly believe in more in kind of the specific use case of IOT and blockchain and even more specifically in the pharmaceutical supply chain you know even to do something which seems as simple of a proof of concept or or pilot for to solve a problem in terms of traceability involves a huge degree of education and so socialization of the technology this first step is just you know going to the FDA and educating them sorry if anyone its here from there but you know what is this what is blockchain and whats the value for it and then beyond that what are the implications so bringing in kind of the major players whether they be manufacturers just their distributors and users hospitals pharmacies just the general public and bringing them together in kind of the model that weve seen working in the the larger blockchain ecosystem but as well in these niche kind of industry verticals are kind of the consortium building model so bringing together all of the the large companies and even that in terms of like a social game is fairly complicated so you get companies that are historically competitive with each other and start talking about you know things where were putting all our data in one place how do you convince people to start to buy into something like that so again kind of working together under you know the umbrella of an ecosystem or a shared common goal or consortium has been the model that weve taken and its primarily yeah and again in the pharmaceutical space so one of the my its I wouldnt call it a P because its really sort of big stretching this is a seminar around the word supply chains but I ask sometimes wonder whether using the word is in fact limiting I I actually think that the most exciting way to think about this technology or any technology for that matter is is what different world it might allow us to imagine rather than just how it might solve an existing problem and I tend to think that when we sort of sometimes talk to companies about their supply chain or my supply chain its a very limited concept that says its me and my and my member companies and so theres a conversation around how the blockchain can help the provenance and the coordination amongst this existing set of actors but you know in a world of additive manufacturing 3d printing you know all the industry 4.0 ideas that are coming up at IOT world one can imagine a much more fluid environment where suppliers are in and out of these arrangements in a much more in a dynamic and and rapid basis how do we actually putting this to all of you so I just like to you to weigh in sort of feel like you know put your crystal ball in front of you and imagine where this future looks like what does the future look like in terms of this you know merging of things like 3d printing with you know IOT and the blockchain where do we where does this all play out and do we end up with something thats not really a supply chain its maybe a demand chain its a its a very responsive kind of world its Ill open that up but now maybe well just get another Sam go for it so Im actually on the board of a company thats interfacing additive manufacturing and blockchain as well so we started with like a really simple problem in the consumer product space trying to build a razor a womans razor and kind of their multiple solutions do wed go you know buy a factory and hold the model of like Harrys I dont know at brand so theyd basically own their supply chain and and looked at additive manufacturing and scaling that technology and kind of bringing the cost of materials down and coming from like my personal background in blockchain wanted to investigate how could be decentralized additive manufacturing so having models that might perhaps involve fractional ownership of machines and leasing of machines and fractional payout of kind of the the use of those machines or the IPR surrounding you know designs that are used for them to create consumer products or aerospace parts or automotive parts so weve kind of moved into a model of decentralized additive manufacturing them not only or doesnt rely on kind of a specific geographic location but more of a distributive decentralized model of producers that respond to to things like demand in a certain area or you know material availability or things like that so its definitely something or its its a scary scenario for companies that have built their entire future on the expectation that they will always be GES supplier of whatever service right I mean what do you what do you see in it okay I mean the way that Ive been looking at this when were building out blockchain solution here were not building a blockchain supply chain solution were building an ecosystem that leverages blockchain and I think that intent actually changes to what youre talking about because rather than saying I have one company and I want to understand how their supply chain works and Im going to follow it which is more traditional software development right like what is the prop what is the problem on your supply chain its saying how do we make the ecosystem itself more efficient by sharing information across the ecosystem now I think theres one thing we havent talked about tonight is permission versus permissionless right its its a different rabbit hole but I think its important as we talk about this which is when you when you have an ecosystem a business network of folks participating you have the option to know who those participants are or to not know who the participants are and I think that in a case where you have sort of the physical exchange of goods that weve been talking about because you need to you know as Dan said the data itself is not true its trusted right so you you know that somebody is telling you theyre gonna send you a bunch of organic bananas but until if you unless you can actually check that theyre organic you have to either you have to trust their word and if youre trusting their word you need to know who they are because you need to know their reputation and so when we think about building out this kind of ecosystem an ecosystem where when we are transmitting something other than a digital item we need that history of behavior if were transmitting just a digital item we can deal with the permissionless system and say this transaction ends as soon as it happens and the value that is exchanged is sufficient for me to be happy with that transaction but by thinking about the ecosystem itself as an ecosystem rather than a chain and thinking about it as people having I like thinking about on the reputation side because you start saying the behavior and the interactions are all due to good behavior and bad behavior is punished and so people who perform well are the ones who are able to create more business are able to satisfy their clients more quickly more effectively and so you actually you know get rid of all of these if in efficiencies that exist in the network now where people are able to cover up bad business behavior by a large size or by a name that people trust for one reason or another and you get down to Im going to let the behavior of the player speak for itself and that is going to by definition create the most efficient supply chain because the right parties are going to be able to connect sort of like the radical statement I think so the supply chain implies this linearity I think you know and when we do fraud detection its got nothing to do with linearity a the looks at the network graph so thats how we do it and lets step back and when I said twenty years of our lives will be an anomaly and I think this is the reason why the Internet is designed as a ruggedly decentralized system its inherently designed for peer-to-peer transactions and communications at the end of the day theres only two things are putting again right thats what thats what exists so why would blockchain actually help I think helps chop the man down and the man is Amazon and Apple and its kind of think about this when you buy a book from Amazon and I find Pearson as a publisher I dont know who bought my books you know I think blockchain makes that go away it allows people they have one-on-one relationships kyc know your consumer I think really matters with who they buy things from and when we cut out that that middleman we cut out a big swath of the pendulum of the margin which means more people create cool music they make great products because were not paying the delivery guy and you know I think ultimately this peer-to-peer ecosystem will develop and I mean I dont think its too brash to say that all great companies stumble and some many fail now can we get there with a permission system or does that reply permissionless I hate to put you on the spot in that business that fun of things that you know is it is it I mean some aspects frigid suggesting that we actually get there by permission die I think someone because theres an identity now I think you know just as like a thing has a proof an encrypted identity so could also could we we could have multiple ones personas right that buy things and sell things and those have permissions I think the permission list thing is sort of the utopian blockchain school of thought I mean ultimately things happen because we allow each other to share things with each other we agree weve agreed that well come here you know I mean thats a permission to blockchain just to add to this conversation if you take the long-term view of supply chains and whats happened over the last several decades this idea of compression of cycle times in first of all in production right so that means how can I make a smaller batch at the same efficiency that I do a large batch at scale thats part of what youre getting to with the 3d printing now and people are working on that same say even with shipments and everything it turns out that the the the more efficiently you can switch over and make make a new batch the less waste youre gonna have in the system we see that with product life cycles as well and product life cycles get shorter and shorter and shorter so people have been already looking at and we did some research on the age of rapid startup and hyper specialization so there are these companies out there that help startups to like really quickly find manufacturing resources and a sales channel and you know theyre interviewed one come ahead like four people and they had so many millions of dollars in business you know because they were able to just outsource everything so that phenomena has already been happening even pre pre blockchain I think the question that youre asking now is is this question of discovery and trust so I want to find suppliers who can supply stuff and or third parties and there are networks out there that are centralized that try to establish some of discovering suppliers and understanding their capabilities and having a level of trust quickly but were talking now about using a more decentralized approach which in which the trust if you do the right techniques you can get even a higher level of trust based on reputation what theyve done in the past people who you know this is the person who is who is actually saying this is a good company Ive worked with them and you know that thats a true statement just want one aside theyre one of my colleagues last year started telling people that his goal was to raise global GDP right but thats what he thought he could do by using blockchain because you can increase the actual participation in the global economy right more companies that now have barriers due to small size etc can participate and so I went to our mutual boss and I said I think thats great and I think he should be measured on that [Laughter] one other point on that if people have been talking about blockchain in the third world for example to give identity to people who dont have documentation either the refugees or theyre just too poor and and other means to help a broader swath of the economy actually participate more meaningfully in the economy so I think it actually you can start to get you know excited I think I think one of the things thats its also important to have a bit of a check right I mean the blockchain is not going to in and of itself bring world peace but just to cite something here so we have actually in this room for people who attended the hack for climate last night that Dan alluded to got one over there one here another one over there and and then sure enough at this event that I I hosted last night a workshop of people working on a thinking through ideas that might be associated with a hackathon thats going to be held at the the cop 23 climate change event in Bonn this year the big annual UN climate change conference we indeed looked at how we could tackle climate change with the blockchain and the thing that I the reason why I think we can do this is because youre not fixing it youre not dealing with renewable energy youre not you know producing forestation but you are creating this capacity for collective action that we havent had before and its the the the the international so the intergovernmental program for climate change I think its called this IPPC or something was created in 1988 and it took until 2015 to have the Paris climate change agreement because we didnt know about the problem what to do about it but we couldnt collectively come together so on that note I just want to just sort of maybe sort of like diving as we can you know in bridge at night just before we came here had there kind of a really rich conversation about some of the things that could happen and the reality is we focus a lot on those obvious questions of the climate change of climate change you know obviously more renewable energy our station but in reality the big challenge is just simply how do we make what we have with less or make more with less and that in fact it also helps us increase world GDP so this this core question of efficiency is actually this common goal as the humanity itself should be pursuing so again crystal ball it a bit here you know what could we do with this technology to sort of tackle some of these you know really interesting new ways of managing you know more with less or just the creative use of materials that might actually build for both a better world and a safer world yeah yeah we got warmed up a little bit but I get really excited about this it so one of the things as weve been looking at food safety that we see is that one-third of all food globally is wasted thats pretty horrible when theyre starving people but when you think about the fact that with population growth and Im gonna get these numbers wrong so dont me on it but its something like by 2050 we have to produce as much food as weve produced in the entirety of human history we actually probably cant do that nor from a climate change perspective should we do that instead we should stop wasting 1/3 of the food that is actually produced and as they meat-eater it would be really good if we would stop wasting meat because thats a huge contributor to global warming and so the question is can we use blockchain and the efficiencies that creates in this network to actually solve the problem not by you know forcing cold bins right like things that we probably should do but can we do it by getting rid of the waste that is costing all of us money that is harming people and is harming the planet so for me it just it seems like a no-brainer its not something to the point that you were on that were gonna be able to do overnight because the technology has to be built out the solutions have to be built out but the investment to me is worth it because youre solving both that social cost and that financial cost right I think I said before I learned it slow and they you know you have to solve real business problems the other thing I learned at Sloan is you actually have to have a business case that closes people dont pay money for things that they lose money on at least not for a very long time and so if you can have a business case that convinces people actually delivers on a financial benefit and at the same time provides real social good and whether that is you know making food safer reducing climate change reducing fraud in business deliveries any of that with a business case by using not just blockchain but blockchain all of the data the IOT the analytics the graphs predictive in it all of this stuff bringing it together that to me is why I get so excited about what it is I do is because I really think our CEO says said blockchain will trance form transactions the way the Internet transform communications I think thats happening and if you think about the impact of transforming communications huge transactions are even more fundamental to our daily life it is gonna change the way that we live the question is how and how fast can I write any other comments for one thing Im just going to do a bit of a teaser about that what happens to finance you know how do do like Foxconn is using a blockchain to incentivize its suppliers to participate in this and rather than offer them you know 90-day repayment terms its now being able to because of that information that its now got offer them 15-day repayment terms thats thats actually bypassing banks thats now you know liquidity and working capital as something that their suppliers themselves work amongst themselves anyway just throw that anybody have thoughts on this big bold brave future that we might be heading into dan Ive already this Dan is already spoken yeah I like listening to you theres you know I think trade finances is ripe for innovation theres a lot of pieces that need to be put in place but if you just look at the cost of financing you know commerce across in these these you know a flat world global economies across borders theres a tremendous amount of inefficiency especially lower if the lower tiers of the supply chain these these you know mom-and-pop shops that get get cost pushed down to them and effectively fine happen to finance their inventory to supply the bigger bigger manufacturers whether its a clothing manufacturer and Malaysia or its you know its a parts manufacturer for some some components so so the ability to improve trade commerce finances is its a huge I cant remember I dont remember what the exact number is but if you just think about all of the AAR factoring that occurs for the small guys who have to essentially go to banks or even more expensive outlets to finance all of their their working capital needs in order to supply product that they eventually will get paid for but they need money in the mean time its its its enormous and and and I think blockchain can change that significantly and theres theres you know a lot of interest in a lot of a lot of things you see about supply chain is is geared around supply chain finance and youre already starting to see you know stanton the traditional standby letters of credit being digitized and put on the blocks are decentralize and monetize the actual blockchain development right its like a real tangible money base use case any other thoughts well so when were talking about finance supply chain finance is one part of it is is finance based on an approved invoice thats improved for payment okay so people have been trying to because fact factoring is very expensive all right so there are a bunch of centralized networks out there today that help try to solve that problem so that they can make that basically you can sell it sell your receivables to a broader audience than just your local banks and get a much better rates on them and or to allow buyers to plug in as you said offers to their suppliers that hey at a discount or either direction so theyre a bunch of solution providers have done that in a centralized way the question is can a blockchain do that more efficiently theres another opportunity which is pre invoice or pre shipment and that depends upon reducing the risk for the lender and blockchain offers so we already see some against theres a fewer very fewer networks that do this but they try to provide a history of visibility of performance for a particular supplier and also visibility into current you know exactly where they are in the process theyve built out this working in front and well you know work in progress or theyve shipped things and by providing that more detailed history of actual performance that you can trust then the lender can lend at a lower lower rate so it also provides the opportunity of providing again this visibility into how much is this a trustworthy supplier thats going to deliver therefore Im willing to lend them money even before theyve gotten theyve theyve delivered it at a lower rate watching insurance is another another option that people are talking about right now and you insurance products that could be built upon this sort of you know richer information then thats something you just some intersections I think I think for the FinTech sector that requires more regulation you know the SCC reg D and all this exists for a reason you know so your grandmother doesnt get like ripped off and stuff I mean I think it just happened yesterday in China you know they they shut it down so I I think theres lots of innovation in thin deck but I dont think thats gonna move the needle on the GDP you know I mean I think by carving the waste out of the supply chain thatll drive more margin back to people who invent stuff and the things you know and these are things that people buy that sort of a belief I have is sort of a philosophical thing that drives like why we even do this you know I want to just rip a little bit on what hes saying so if we go back to lets say the mid-1800s right Im a farmer Im out plowing in my fields I hit a rock the tooth of my plow breaks I go to my general store and I say hey Jack Im gonna give you a bag of grain as soon as I finish the harvest Im just gonna take this today Jack says fine I mean Ive known him my whole life etc I go back finished plowing I deliver the grain hes happy because he really likes making bread because I make great grain fast forward to now Im a consultant Im working on a pitch I dropped my Mac its broken I go into the Apple store and I say hey Jack Im working on this pitch as soon as I deliver it Ill come back and you know give you a bag of grain for this computer that Im gonna take today that does not happen and so weve taken what was in fact a fairly easy to use system where you know we got what we both needed Jack and I which as I needed the plow and he needed the grain and we said you know what its not always easy to match needs and so were gonna invent this thing called money and were going to create credit cards so that its easy to carry them around and were gonna date that you have enough money and that its you know the right kind of money and if we think about blockchain as a way to facilitate those transactions do we actually need money right all we need is that trusted interaction of Ive delivered the value to you and I know that you will deliver that value back to me now on the permission permission list if its permissionless that value transaction has to happen at one time if its permissioned you could actually have it delay over time and you could sort of literally go into the Apple store and be like yeah Ill pay you with a grain of a bag of grain when Im done with it but we need to think I mean what I think is interesting about this is exactly what Dan said is were not focusing then on how do we change the current processes in financial services were focusing on how do people get what they need and whats the most efficient way to do that and how does blockchain make that possible by creating trust and creating relationships I mean Finance has been with us for hundreds of years and weve just assumed that it is a natural state but in fact its just a solution to a problem right and and if theres another solution now I dont I dont think we are going to a moneyless world tomorrow but but it is it is important to put all the cards on the table which include you know really financed you or just at least the way it is currently designed it may be may be quite different I think finance is - blockchain as the porn as porn was - the internet I mean its the low-hanging fruit that those who want to make the fast buck go there and I mean this you know just comes into a sort of like the rubric for why we think that Im wondering about Lizzy because I think finance is going to be disrupted like the alternative if the alternative diploma i er its come anyway maybe theres some questions we do have a mark that I can hand around walking up the steps thank you I just Travis my name I just wanted to ask what the top risks card associated with using and implementing blockchain is there a consensus top three risks I mean Bridgette and Sam you both touched on it but you know is there a consensus top three I mean I dont think theres any kind of consensus on this at this point I mean and I think the risks are gonna be two things right one is the underlying blockchain technology can it do everything that we want it to do and the second is the solutions that we build on top of it are they good for me the biggest risk there is are they going to be designed in a way with governance that actually fulfills the promise of what theyre supposed to do and delivers on the sort of contract that they make with their clients in saying this is how were going to create trust and this is why the values there so those would be the two I would say is that the Watson The Watcher question is that what youre asking well one thing that occurs to me is I think theres a architecture risk and what I mean by that is blockchain I hear so many different opinions about how a blockchain should be used what its role is and and I so I think everyone is still figuring that out and so at this early stage its really important to get someone whos got a pretty good perspective on that but you could build a solution and find out hey this is really were trying to do the wrong things were using it in the wrong way for the wrong things and so I think thats thats thats one risk at this stage I think two or three or five years from now well have a lot more and that sorted out hello so my name is tewfiq Im a masters engineering and supply chain at MIT so my question is to for Bridget you mentioned that the financial gains are the base to be able to scale in the technology and apply it and other all the industries were you able was IBM able to quantify the gains out of your project with Walmart do you have any tangible results or are we still in the pilot phase and if there if there is any financial gains why isnt everyone doing blockchain I mean blockchain is sexy because no one understands it and because there is a lot of doubt about its potential right so so I mean using the the pilot and food safety that we did with Walmart as a starting place we we announced in June that would had taken Walmart about a week 6 days 18 hours and 26 minutes which was to do traceability on a pack of processed mangoes that we were able to do in a couple of seconds and weve done work which we havent sort of externally quantified on what kinds of savings that then mean that kind of in means for a company like Walmart or one of their suppliers or anyone else in the ecosystem and we believe and weve demonstrated to folks who have gotten engaged with us that there is significant financial opportunity and cost savings I would say the reason that more folks then have joined with us in the collaboration havent joined is because were trying to build this as fast as we can and its actually hard and we are building it and weve got an amazing team working on it but we want to build it right and so we want to make sure that were inviting folks in as we can sort of accommodate and so it really is how quickly can you build the system you know build the jet while its flying and thats thats what were doing right now with blockchain I think at IBM and I think in a lot of other places and so I do think you will see scale but keep in mind last year we were still trying to build the hyper ledger fabric and the underlying technology now were building the fabric on top of that so absolutely 100% you have to have a business case people have to believe that this is worth investing in from a technology and from a solution perspective but on top of that we all have to be working fast but also have a little bit of patience for the realities that you know the developers I know are friggin amazing but theyre not magic they cant code entire systems overnight even though I try to get them to do that sometimes I thank you for the awesome panel and discussion so far I have two questions one is actually for the audience how many people here are building applications or technology using blockchain ok fairly good show of hands for the panelists can you talk about your decision to select a blockchain platform what it offered you what you chose if you support multiple blockchain platforms why you chose to do that to help those who are interested in building to make their selection and help us understand where the best choice is thank you Ill take Ill take a shot at that we we initially built on Ann theorem not because we felt aetherium was far superior to maybe hyper ledger we really see we talked about the need for standards and we talked about the need for interconnectivity its going to be a multi-chain world out there and you know our view is is that you have to be chain agnostic and so as we have architected our solutions in particular weve been weve tried to abstract a way to where we can be chain agnostic its not easy in all cases and in the early days I mean when we started building our first proof of concept I mean we had to go in and actually modify some of the the open source code in order to get it to do what we wanted to do a lot of those problems are being solved and we havent had to do that recently but its but it is a trade-off and I think that especially as it relates to supply chain its going to be a its going to everyone has pre-existing infrastructure that youre going to have to work with and those infrastructure providers also have pre-existing preferences towards different technology stacks and the chain is going to be part of the technology stack and and we think that you need to be agnostic there but to get a of canta if you if you keep that in mind in the design phase of your your your application development then you can potentially migrate from one platform to multiple chain platforms in the future I just add one thing to that looking at the approach that IBM and and Microsoft were taken and you can correct me if you got a different perception on this so Microsoft you know theyre like an OS and tool provider and theyre really taking that approach to you know provide rock Damon as a service and really address the developer market whereas IBM has more bench strength and consulting and really will step in and help you kind of build these whole applications so part of it depends on where youre at as an organization whether youve got you want to build it all yourself or whether you want to get help from your provider in when you choose the solution I will just sort of take thats not it so we just announced the IBM blockchain platform in August and what that is is a tool for developers to build develop governance for and operate and run a blockchain network so yes we have a phenomenal consulting services organization that can help people who dont want to do it but one of the things that we actually saw a gap in the market was how do you get from I want to do something with blockchain but I dont have a lot of experience building it and I want to make sure I can run it in a way thats secure and scalable and 5th level for compliant or you know whatever it is that you need and we didnt see that in the market and so we built the blockchain platform to help people do that hi Im Steve Stockman with radio robots so you know is it a supply chain or which with it linearity good comment or is it an ecosystem and it seems to me that theres a complementarity because Im not going to get a cat d7 to go knock down some jungle in the middle of nowhere with an ecosystem okay because it has to be built it ways dont quote me 60 tons and it has to be delivered and it needs fuel so on the one hand moving data is very good Sims going to ensure that I dont get poisoned by the pills I take thats great on the other hand it strikes me that theres a lot of I think there needs to be a little more thinking about what makes this thing have value if it goes beyond data so here are the roses to Rotterdam right now what gives those roses value is that they get sold on the street on Queens Day okay and if they just sit outside the port at Rotterdam which as you know often happens theyre not worth much so it strikes me that again one has to think of this kind of dynamic tension where the the the supply chain will feed the ecosystem or the ecosystem will feed the the supply chain and Im not trying to cop out its just a very long discussion but I think that that really needs to be looked at because otherwise its just moving more data and and and that strikes me is not useful if youre making things any one kiddo comment I mean I I would just totally agree with you it and so perhaps maybe in my excitement I framed some of our stuff but the the way that I think about is building out this business ecosystem and so that you can almost create the supply chain thats right for you at any given point in time you dont have to be held hostage to a supply chain youve already youve always used before because you can dynamically decide at that point who is the right vendor to use because you have information you have clarity right like as a golden end state thats where I see it happening and so so from my perspective the idea of focusing on the ecosystem is so is to focus on creating the environment that allow you to optimize the supply chain thats right for you because to your point if you dont have a supply chain you dont have something delivered from point A to point B hi my name is kim silva i want to go back to fighting corruption and trade base money laundering so with corruption it goes back to the original transaction and that goes back to the due diligence that allows somebody to get into that supply chain so and trade based money-laundering with those transactions that requires somebody to be looking at those transactions now youre making them more transparent but does that necessarily mean that someones gonna be looking at them more because they could be doing that now so Im wondering how the blockchain technology is going to aid that and then the other part of my question is as this is being built out is there any discussion of that information regarding corruption and money laundering thats going to bring that up to the regulators and you know the Department of Justice and the people that are fighting the financial crime because right now like what we have in the banks its a pretty inefficient system right someone files a suspicious activity report it goes up so youve got this Bank over here in this Bank over here and its not connecting the pieces that gives them the information this might be a great tool to kind of consolidate that information and better inform that that part of it so yeah I have an observation on that but its its a concept that can also be applied in FinTech so as an example one of the things we did in North Dakota is we we have this deep data set of about 9 million acres of land with 15,000 wells everything thats happened in those wells with every operator since 2003 is in the data set and its and itll basically unencrypted data sell it blockchain so Im a deep believer in analytics and people talk a lot about predictive analytics but I think you cant predict anything until you can fully describe it so I what we can do is we can literally predict where spills will happen in North now on a given landowners property from a given operator etc I think the same thing exists in in the financial sector because it I think I keep a key takeaway here is there should be no centralized system its a massively federated system and the query into that federated system gives the descriptive data that allows us to do analytics and then you can literally predict where evil you know the bad actors are gonna be so its once again its not just the blockchain its the the integration of that with some other technology I think it helps target where that is now thats a regulatory thing I think this is one of the reasons like our company stays away from all things coin because I think theres a regulatory barrier and hurdle to actually scaling you know thats thats my well so what I would add to what Dan said is we estimate that 80% of the worlds data is sitting in silos in databases around the world you cant do big data on silos right you need to look at a picture of it as big data and the bigger the better I mean Big Data works best with huge data sources because then you can figure out whats real and whats not and whats garbage and whats not and so if we go from hey we have the data but you have to look at it in each little slice which doesnt give you any insight as to what into whats going on - I have a single federated data set that everybody can or that whoevers permissioned whatever however you govern it can look at but somebody can look at the whole thing and find those trends that are so hard to find until you look at the whole picture thats what the difference is and and thats why figuring out the problem that youre solving is and what the datasets are that you need and who you need to engage and how you need to engage them is so important is because you have to make sure that youre getting the right data sets youre getting the broadest possible picture so that you can stop using blockchain and start using big data to figure out what those answers are I will say on your regulatory comment you know Ive been working in new technologies for a long time regulators are kind of the people who say why dont you go figure out what youre gonna do and then come back to us when it works when you can demonstrate it and well evaluate it IBM had to press releases in the last six months where regulators were quoted talking positively about blockchain pilots and the reason is because regulator this is Maya my explanation that regulators see this as the way to get the auditability the immutability the visibility that theyve been looking for and you know theyve got shrinking budgets expanding responsibilities and they are thrilled with the idea that there is a technology that is actually well aligned with their goals in trying to make the world a safer a better place for people so exactly I wouldnt call it a central repository though because its not it its a massively federated repository that requires really great search to to discover it and then maybe aggregate analytics about it but its radically its radically decentralized essential is a dangerous word in this regard so lets lets wrap it up this is pretty much where weve come to the end here but I think maybe just as a very very quick statement for each of you what I like to think of is maybe if you can give us a call to arms what is it that you would want the people in this room to take off with them because this is this is an enterprise I talked about it being a social technology it involves people who are engaged to walk off with it and build stuff with it and change the future what would you what do you want these people to walk away with at this point dan and Ed in the line but youre this bot man yeah yeah so I mean my call to action saw is the same thing just do it you know like if there are people here doing companies just freaking get out there and do it you dont need to look for standards III believe that the standards always follow markets innovation happens first standards follow anyone who goes and seeks permission from a standard well have a losing company so like my take is get after it you know like theres one of the reasons to be here is theyre only I think two places the United States really is might alienate some people if you want to be in software I think its right here and I think in Palo Alto so youre in youre in the hotbed of innovation here and the Media Lab csail everything else so this is the place I mean these kind of meet ups are super cool this reminds me of the homebrew club you know like you know 40 years ago thats what this is and thats my yeah I would I would echo that I I mean I think you know this is a nascent technology and its its a wide open world really the opportunities are limitless in terms of your imagination of how you can apply the technology and you know its dont get hung up on you know technical stacks or product stacks or any of that stuff I had a very smart person once I was struggling over trying to figure out what what open-source tools to use in what languages and he and he was a very senior Silicon Valley computer scientist and he said what are you talking about it doesnt matter just go build it and if you build the right thing it wont matter what the underlying infrastructure is so so that would be my advice is you know play with the technology go out there and innovate and and and think outside the box and just just make things happen and dont worry about sort of trying to conform to any of the things that you know you know dont really matter at this point in time Sam I mean an echo that as well I cant count the number of times Ive sat in a room like cryptographers fighting over you know the most specific of details so on that point you know think of the business case beyond what youre trying to do if you dont see it in terms of a tech stack created create a blockchain I contribute to open source also kind of think of the the implications behind what youre doing so a lot of what you know my personal thinking over the past year or two have been focused in kind of sustainability and ethical applications of blockchain for supply chain and an additional application so I mean how do you you do good so those are kind of my my point I think those are all great points I think the one thing I would add is think about what the problem is that you want to solve I mean there are real business and social problems that blockchain can solve and its not about how do I transform a process its about how do I solve the problem because blockchain is transformative and its gonna allow you to think differently and do things differently and so its not an incremental change it could be a real step function change and so start with the right problem and that means people who know the space and it also means people who are able to think innovatively and creatively about the space kind of following on many of the themes education partnership and experimentation and things I think of because its very early days so youre gonna hear lots of different opinions on whats the right path and and how to do this stuff so you need to be as informed as you can but you also need to partner because you cant learn everything right so find some partner this thats partners that are that are smart and trusting that help meet there and then the experimentation because its gonna take time to figure this out and so you know start trying things and take some baby steps and and I think you can find some really interesting things that work there you have it folks off you go change the world a round of applause for the panel please [Applause] As consumers, we want to know that the food we eat is safe and in some cases, such as fine wines that it’s provenance is authentic. We want to know with certainty that the gold, diamonds, and electronics we buy are not funding conflicts. And that the products we buy are not counterfeits. Supply chain managers want to track condition, location, and remove friction from global supply chains. Blockchain, distributed ledger technology, holds promise in solving these problems.In this session, we hear from CEOs, founders, and technology experts at the companies on the forefront of this ongoing digital transformation of the supply chain. WGBH Forum Network ~ Free online lectures: Explore a world of ideas Like us: Tweet with us: See our complete archive here: