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Interview

Blockchain Interview: Georgios Papagergious Part II

This is the second and last part of my Blockchain Interview with Georgios Papageorgious. The Blog Post starts with his answers from part one again. You will find the new answers at the end of this post.

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Some words about…

Now everybody is falling in love with Bitcoin and blockchain. Georgios Papageorgious love in Bitcoin and Blockchain is older and it is much more substantial as he is a part of Bitcoin experts, who offered the first world wide Crypto Currencies MOOC at the  University of Nicosia. Why Nicosia, why Cyprus?  In April 2013 Cyprus people felt the consequences of entrusting all their money to one bank.  While rescuing the banks, savers were expropriated. At the same time, Bitcoin was at a high and Cyprus people discovered Bitcoin as a chance to become independent from banks and the state.

 

Let´s start with an easy question. How would you explain Blockchain to children?

Easy Answer: It’s the first self-monetizing technology enabling a decentralized database for storing the ownership accounts of native digital assets by the use of game theory and incentive structures.

Hard Answer: You and your friends want to keep track of your toys when you’re meeting with friends to play. So you take a picture of your toys with your phone before you share your toys, and share the picture and the toys themselves with everyone to play. If everyone does that, then there won’t be any infighting about who owns what toys at the end of your play, and everyone can play with everyone’s toys in the meantime.

 

What can you do with Blockchain? What is it good for?

Right now, transferring ownership of native digital assets, tomorrow all kinds of interesting things with that native token acting as collateral.

 

Is the Blockchain a technological or a  social innovation?

It is both because it needs both to function at a distance. One feeds into the other and maintains the incentive structures that are needed to keep it decentralized and all participants satisfied but unable to control it.

 

What are the benefits of using the Blockchain technology for banks?

There are two pills, the blue pill (permissioned blockchains) lets them cut costs, automate processes and remain beholden to correlated assets as they’ve done their whole lives, and the red pill (permissionless blockchains) allow them to leapfrog their competition, carve out new markets and race in the global market for the next disruptor, while minimizing systemic risks and investing in uncorrelated assets.

 

What will Blockchain mean for people?

Most people fail to understand that Blockchains have a dualistic nature when it comes to transparency and privacy. You either have all you can have, or you have none in the long run. Any scenario where we do not have absolute privacy is a dystopian scenario in which others have full control over us. Permissioned Blockchains are all about control in a few hands and a walled garden in which magic happens. What is rarely mentioned is the increasing systemic risks inherent in less control surface of such systems and the way they could go bad for all participants if they’re compromised.

This is the original thinking that gave rise to cypherpunks first, and decentralized currencies after decades. Those that ignore these and the teachings from global finance are doomed to relive them.

 

Could the blockchain be a rescue anchor for banks, or what impact will the blockchain technology have on the financial sector?

Alone, a blockchain is just a data structure. For most bankers, it will look nothing more than a new OS being installed. Making the best of it means serious and deep organizational changes, strategic initiatives, innovative and flexible thinking, the ability to be competitive and transparent, even open to the dynamism of the markets

Comparatively, the dinosaurs didn’t die because mammals came about. Mammals survived because they were more adaptable to black swans in the environment, so you tell me

 

Which countries have a more progressive blockchain community? Where are the most promising blockchain centers and ecosystems?

Switzerland, Berlin/Germany, Singapore, Shanghai, Hong Kong, Ukraine, India (and yes Nigeria). The US is a different case, not so much a single ecosystem, but powerful all around (where it’s allowed to flourish).

 

In the USA, there is now a blockchain consortium of cooperative banks. Do cooperative banks have a special relationship and therefore also a special opportunity in the successful application of this technology?

Yes, I believe they have a more special cooperative relationship, and perhaps enough dispersion to validate a shared trust model more than other consortiums, but I don’t think that will confer any significant special opportunities.

 

Part II

 

What exciting blockchain companies should we all know?

You should know a few exchanges, like Kraken, Bitstamp, Coinbase, Bitfinex and Bitmex, you should know of Bitpay which is the biggest connector to businesses accepting bitcoins, and much more creating amazing services in the space. Indicatively mostly: Satoshi Labs, Ledger, Bitwage are among my favorite but they’re too many to list.

Then you have those standing more on a conglomerate and protocol level like Consensys for Ethereum and Blockstream for Bitcoin. Beyond those, there are a lot of interesting funds which supply capital to many of the businesses in the space, and research on these is a must if one seeks to attain a full picture of the ecosystem.

I’m also going to twist this question a bit because a lot of the most interesting activity isn’t happening by companies but by so called „fat protocols“ which tend to either have a foundation behind them or aim to be completely decentralized. These are (like Bitcoin and Ethereum) and will be (like Tezos, eos, etc) the substrate layer on which future enterprise and retail applications are being and will be developed.

 

Which industries will benefit most from Blockchain?

Ledgers of transactions and ownership have been with us as far back as recorded history goes. They touch almost every aspect of our societies and one could argue that ownership and its transference is the thing that ties us, our interests, our motives, and incentives together. It is this recorded history of social interaction, the risks, and rewards of it, the investments and failures in it, that shape our history as humans. Up till the 1400s we’ve only had single entry accounting, from then till now, we’ve had double entry accounting and now we finally have Triple Entry Accounting. This fact, that our transactions can be recorded in an impartial ledger that is not controlled by any single organization, country or entity, will have profound implications to how we share trust as humans, from now and for the future. Our every remote interaction with each other balances on this trust, so every aspect of *remote interaction*, financial or non financial is going to be influenced heavily.

 

The finance industry and providing financial inclusion to more than 2billion people in the developing is an obvious first, but beyond that, our connected devices will increasingly need to communicate with each other on a financial level as well (IOT, M2M economy as well as AI). Insurance, Securities Trading, Investment Decisions, Banking and Finance will be completely transformed. Using this developed trust on non-monetary applications will transcend how we deliver and consume content, how we identify ourselves and how we make decisions (voting and attestation). Supply chains, automation of business interactions and self-driving vehicles, manufacturing itself and multitude other large industries will be automated, dis-intermediated and changed beyond recognition. If you’re an intermediary of some kind now, in any industry, consider this a warning towards your future career choices.

 

We are in 2026: Where do we stand with the Blockchain technology?

As we progressively start subscribing more value into public blockchains, this will start changing societies fundamentally, not just digitize them, but transform them. How we produce and consume content, how we license our digital rights, and other, real world values like real estate and even reputation will change. When a multitude of AIs fight with each other on how to better serve us, because their survival and proliferation (through payments) depend on it, I don’t know what will be left unchanged. Software had lagged hardware development so far, but I believe we’re about to see a giant leap in this in the next decade. In 2026, some form of Blockchain will be under most financial transactions, perhaps on a very low and carefully hidden level (Central Bank, Bank of International Settlements, Payment processor) or even on a native and high level (consumers using native digital assets like Bitcoin and Ethereum directly) as means of exchange and store of value. Distributed voting and prolific connectivity will enable us to be true citizens of the world, governments competing for our attention, investment and taxes.

What’s more, blockchain will enable us to make transparent things about our governments we never thought possible. Public procurement records, government spending, tax revenue, public spending and specific allocations, party campaigns, and more. We’ll be able to track, as simple citizens, the expenses of politicians and lower corruption to levels we’ve never seen as a species. At the same time, reputation and identity systems will be in place that will enable the more powerless among us, increased privacy and protection against oppressive regimes (in the many regions of the world where that is still a problem sadly).

 

Boris Janek

AUTHOR - Boris Janek

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