The future economy will be much more decentralized, emphasized Bettina Warburg at her keynote address at Transparency18 in Atlanta on Wednesday.
"The stories of the possibilities of the future are amazing, but what they fail to do is to understand what is happening underneath. What is happening with our economies basic infrastructure," said Warburg.
From our early days, our value of exchange was one-to-one because our societies were much smaller. It gave us more certainty in our transactions. But with the rising uncertainty in our transactions, we invented institutions. Rules and protocols to allow us to do business with each other at greater scale and with trust. Eventually, we’ve created these online institutions to help us scale the transactions. Now, with blockchain we can scale in a whole new way while lowering uncertainty even more.
"Lowering uncertainty expands our ability to trade," said Warburg.
"We hear a lot about blockchain, but it’s hard to visualize," she said. Warburg likes to compare it to a checkbook for a visual aid. You keeping up with your transactions in the back of your own checkbook. A record of a chain of transactions.
We’re basically holding it in a peer-to-peer network now. It’s decentralized, and we’re able to record transactions over time.
How did the internet evolve? "First, we had all these intranets. We’re sort of seeing the same thing happen in the blockchain space. We have the Ethereum network and public blockchains, but we have a lot of scoped private blockchains," said Warburg.
As blockchain’s evolved we’ve seen it expand beyond Bitcoin. We’re starting to see it as an internet of blockchains. Blockchains that can interconnect.
Modern-day blockchains are global, decentralized, virtual computers. "That’s what I’m wanting you to really focus on here today," she said.
Blockchain is really quite different than the traditional triangle application. Part of the reason why it’s different is the idea of a smart contract. The transaction revolves both ways. What’s innovative in terms of smart contracts is to automate business logic and therefore governance. The rules can be executed by computers.
All of this may sound way off in the future, so Warburg takes us a level deeper. Everything has a supply chain if you think about it. How we make, design, and deliver is changing.
All of the products through supply chains are facing these decentralized changes. “At Animal Ventures we believe we’re entering a golden age of supply chain innovation,” she said.
"It’s this story of trade that’s going to change the most."
We’re already getting better with our smart algorithms. We have a lot more data. We’re gathering from machines things like maintaining our network state, automated, executed, and intelligent decision-making. Actually, the weakest element is the foundation of these three things: maintaining the shared reality, and that’s what blockchain will do. "We need an autonomous network state. It will enable what we can 'machine trust.'"
We’re literally inventing an infrastructure to write rules for machines and execute them for protocols. "So how do we get from survive to thrive?"
What are some of the inevitabilities of some of the technologies we’re seeing? "To us, it means how do humans, machines, and organizational forms work together. What will drive value creation in the future?"
"We all need to be a little more like Leonardo da Vinci who was an artist and a scientist," she said. "Like his flying machine. We need to use technologies to design faster. We can simulate our supply chains and test and learn from them. That should be each and every one of our goals."
After her talk, Warburg invited Slync CEO, Chris Kirchner, on stage for a further conversation. One of the aspects they discussed is how companies need to see themselves in a cooperative way even while being in competition. Also, they touched on the challenge of discussing blockchain when it’s such a non-visual thing, and on how there needs to be space for the crypto zealots, as well as for auditing and governance issues.
In terms of a timeline, and how long we're looking at when blockchain will be a big part of our lives? Warburg began with a quote. It's called Amara's Law. "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run."
She followed by saying, "It’s a ten-year horizon. There’s issues and constraints that need to be solved for us."
She also quoted Steve Jobs who once said, “Technology should either be beautiful or invisible.”
And that’s likely how blockchain will be.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.