Joe Lubin lived in Jamaica in 2014 when he had the meeting that would turn him into a cryptic billionaire and a high priest in a new technological ecosystem that some might consider a more significant day than the Internet.
Lubin, a 53-year-old engineer educated in Princeton with a curriculum that included stints to Goldman Sachs and several hedge funds, had long "controlled". Alarmed by the global debt and what he saw on Wall Street and in Washington, DC, he had considered the hoarding of precious metals long before the 2008 financial crisis was in full swing. He had even crossed Peru and Ecuador with his brother, trying to buy farmland in South America that could help them isolate them from what he saw as an inevitable global showdown.
Instead, once the crisis finally hit, Lubin moved to the Rasta nation with a friend. They built a home recording studio in Kingston, not far from the beach, and they started producing music and video. For a while, Lubin did everything he could to take his eyes off the massacre he had left behind. "We felt like the musical project in Jamaica was a lot cheaper and funnier," he says. "I'm a terrible guitarist, so I was more a facilitator."
Then, in 2011, Lubin read bitcoin, the cryptocurrency invented by a mysterious figure known only by the pseudonym Satoshi Nakamoto. Like countless others, Lubin has become "infatuated" by Nakamoto's idea of digital money that could operate outside of global financial systems, remaining impervious to the manipulations of governments and central banks. Lubin began to buy coins and read everything he could find on the technology.
Nakamoto's unique innovation was the creation of a cryptographic parallel register system, known as "blockchain", along with an incentive structure to get people to run it on their computers. Using Nakamoto's software, thousands of people could simultaneously serve as custodians of a constantly updated body of records. The time and the origin of each bitcoin transfer and transaction were recorded and changed simultaneously on a multitude of self-running computers. Most of these computers had to validate any new "block" of transactions to make it active. For these reasons, it was virtually impossible for anyone to hack, cheat or manipulate it.
Yet it was not until five years ago when Lubin met a nineteen-year-old math expert at a meeting for crypt enthusiasts in downtown Toronto that the time spent by the Canadian engineer as a recording company was about to end. The young man was Vitalik Buterin, a college dropout whose infatuation with cryptocurrency had led him to co-found Bitcoin magazine. That evening, on 1 January 2014, Buterin told Lubin that he was working on a completely new application of blockchain, similar but much more ambitious than the distributed ledger created by Nakamoto.
The Buterin platform could record indelibly not only bitcoin transactions but any kind of transaction on a distributed ledger. It could be programmed to automatically execute complex agreements, or "smart contracts", which involve the sale of a stake in a property, the adoption of a regulation by an organization or the purchase of 1,000 cotton bales in six months to $ 1.50 sterling. And since it would run in many places on many computers around the world at the same time, everything could be done outside the jurisdiction and without interference from any government or business entity. Buterin had already given a name to the platform: Ethereum.
For most people, particularly those who have not spent time pondering how much we are at the mercy of corporations and governments that control servers and data centers on the Internet, Buterin's tone may have attracted an absent eye. But when Lubin read Buterin's proposal, or blank paper, he realized that it was the solution he was waiting for: a tangible way to finally set in motion the possible global transformation he had foreseen with the introduction of bitcoin.
All these centralized servers could be replaced by a hive mind composed of independent and independent actors, one controlled by everyone and none at the same time. Casellants and intermediaries would have been cut, allowing new types of institutional, commercial and governmental structures and a different type of World Wide Web: a truly democratic "virtual machine". We could take our data back from Facebook, Googles and Amazons of the world. Even the perturbators would be interrupted.
"This technology has the potential to destroy power silos and rebalance informational asymmetries that disadvantage so many," Lubin would later write.
Almost five years later, that vision has become a global movement. 250,000 developers are now developing the Ethereum platform, launched in July 2015 by Buterin, Lubin and a small group of other pioneers. He has created dozens of imitators, spin-offs and would-be usurpers, and has made Lubin and his young friend unimaginably rich.
What remains to be seen is the pioneering re-engineering of the blockchain by Buterin will really change the world. But we could soon find out.
A virtual avalanche
In the last few months, the first of what many expect will be a virtual avalanche of blockchain-based projects – on Ethereum and the many distributed accounting platforms that now compete with it – have started moving from pilot to full implementation. The group of people pushing these new technologies is no longer limited to a small band of crypto-anarchists, disillusioned cast-offs of Wall Street and geek computer programmers. It now includes corporate and government leaders at the center of power structures, many of the early blockchain converts they once hoped to interrupt.
Although the uses that these leaders have in mind for technology are the prosaic monitoring of the supply chain, the back-office banking settlements, the re-engineering of food security systems – they speak of blockchain with an almost religious fervor. This created a maniacal hype about a technology that many people are too embarrassed to admit they do not really understand.
"Every consulting firm is obsessively engaged with this stuff now," notes Sheila Warren, who runs a blockchain project at the World Economic Forum focused on encouraging the development of common technical protocols and common standards. "There are many blockchain labs in large companies: IBM, Microsoft, Facebook, Google, SAP, all of these companies are paying attention."
Some of the most radical blockchain innovators suspiciously look at Big Business's efforts to co-opt their idealistic visions for a universal "truth machine" and modify its architecture to better fit more mercenary uses. But others, such as Lubin, see this development as a useful step forward towards a broader view of a new World Wide Web for transactions of all kinds.
Corporate spending on blockchain technologies is expected to increase from less than $ 2 billion in 2018 to $ 11.7 billion by 2022, according to a report by the International Data Corporation. The company examined 16 different cases of use, such as regulatory compliance, food safety and digital identity. Ironically, the most aggressive investors so far have come from the industry that the original bitcoin blockchain was trying to bypass: financial services companies. It is expected that they will spend $ 552 million in 2018 alone, according to the IDC report. Another study based on a survey of 200 banking honchos placed the number at $ 1.7 billion, with one in 10 of the banks and other companies interviewed reporting blockchain budgets above $ 10 million. The typical "high-level bank" had 18 full-time employees working on technology and planning to go live in the next 24 months, according to a Greenwich Associates report.
Those who push the blockchain technology do not see much connection with the virtual currency so long excoriated by the leaders of the sector – the most famous Jamie Dimon, president and CEO of JPMorgan Chase who has called bitcoin a "scam" and a "scam". they argue, the existence of their distributed transaction logs will one day save billions of dollars in financial services companies in a variety of ways: by increasing accuracy and shortening the time for settlement in stock trading, accelerating and simplifying cross-border payments and enabling self-executed smart contracts that automatically enforce the obligations of all parties in a contract. And all this would be achieved without the additional expense of the human intermediaries currently needed to monitor and ensure that transactions take place.
"The transactions are grouped in blocks, one after another in a chain of blocks (the" blockchain ")," the consulting giant Deloitte recently wrote in a report released to its banking customers. "The links between blocks and their contents are protected by cryptography, so previous transactions can not be destroyed or forged, which means that the ledger and the network of transactions are reliable without a central authority, an" intermediary " . "
Technologies could benefit smaller players in a myriad of other sectors. The reduced cost of economic activity resulting from efficiency could unlock $ 1 trillion of trade that would otherwise not occur, especially in emerging economies and among small and medium-sized businesses, according to the World Economic Forum. (It would, among other things, mitigate credit risk, lower taxes and accelerate processing times at borders).
The supply chain specialists, meanwhile, have emerged as some of the most devoted proselytizers of technology. Jerry Cuomo, an IBM colleague and vice president of the blockchain development company, talks about the day he first learned about Ethereum and read Buterin's report as if it were a white light experience.
"I realized that it would change the world," he says. "I took blockchain fever, everything suddenly made sense."
Cuomo was at the time a founding member and chief technology officer of an IBM business unit with a $ 6 billion portfolio of offers focused on "middleware", software and systems that act as a bridge between different server networks and different activities. When an employee first explained Buterin's idea for the first time, Cuomo's mind immediately switched to the type of prototypical dispute he saw every day: "A supplier calls a customer and says," Hey , you did not pay me. "I will pay you when you send me the damn thing I ordered." The supplier says, "But I sent it." The shipping company says, "We delivered" .
From there, says Cuomo, it may take an average of 44 days to stabilize IBM's supply chains. "In IBM, we see tens of millions of dollars – one hundred million dollars easily – in a given supply chain, on a given day, related to these disputes, and it is accepted as a normal commercial practice."
If there were a set of digital and immutable records shared by everyone involved, instantly and simultaneously updated on the company computer of each part at every stage of the process, there would be no need to discuss three different series of books, engage in phone calls controversy and involve numerous employees in these disputes. A look at the blockchain, and you could solve it and locate the lost object almost instantly.
Such a system, understood Cuomo, has the potential to drastically reduce costs in a myriad of other ways. The insurance premiums would decrease, as the goods would be more easily traceable. IT security costs could be reduced or shared between different actors. And since there would be only a series of records, the administrative staff could be freed to do other things.
After reading Buterin's text, Cuomo "fell in love with Ethereum" and pushed IBM to invest heavily in blockchain technologies. However, when Cuomo and his team began to consider what they would need to meet the privacy and security requirements of IBM's corporate customers, they developed reservations. Cuomo knew that his company's business customers would like the idea of a distributed ledger, but he also knew that they wanted to control who was distributed, a problem that the Ethereum programmers had not yet begun to consider. Cuomo and his team then went to work to examine how they could create "authorized" blockchains that only a select few could access and see. The construction of a similar "walled garden" over the existing Ethereum ecosystem, he concluded, would require "deep surgery" on the core code of Ethereum. In addition, says Cuomo, when IBM corporate lawyers turned to the non-profit Ethereum foundation, established to oversee the creation of the new blockchain ecosystem, they found its community intellectual property and license rules too restrictive: the foundation, rather than IBM, would have owned the rights.
"So any commercialization should go through the Ethereum Foundation," says Cuomo, "and for lawyers within IBM in particular, but more broadly from the point of view of trade, those open source licensing terms usually do not they are considered very good. "
It was 2015, and IBM decided to do it his way, driving efforts to create a parallel open source collaboration with more environmentally-friendly IP rules or Internet protocol. Known as Hyperledger, the project runs out of Linux Foundation and probably has the second largest number of developers working on it, behind Ethereum. The project is overseen by a board of 20 members, including Cisco, Intel, Hitachi, Bank of New York Melon, Wells Fargo and Accenture. It is chaired by Blythe Masters, former JPMorgan executive and current CEO of Digital Asset Holdings, a company she co-founded to create generalized accounting technologies for regulated financial institutions. (Prior to being involved with the blockchain, Masters was perhaps best known for inventing the credit default swap, a financial instrument that would later play a notorious role in the 2008 financial crisis, the same crisis that many people attribute to the crisis. increase in bitcoin).
In the coming months, you'll hear a lot more about Hyperledger. Recently, some of the first corporate blockchain projects have moved from proof-of-concept to fully operational programs, using the infrastructure designed by IBM consultants, implemented on technology called Hyperledger Fabric that IBM has helped develop and rely on. IBM to provide the initial computers on the blockchain and "onboard" participants.
Among these is We.Trade, a consortium of 10 European banks – including HSBC, Santander and Société Générale – which launched last spring. The network provides a blockchain linking the parties involved in cross-border business transactions, including the buyer, the buyer's bank, the seller, the seller's bank and the transporter. It is accessible from any connected device and is now used to manage, track and execute a small but growing number of domestic and international business transactions. A high profile rollout is expected starting this fall.
In August, a food security effort was initiated, supported by IBM called Food Trust. According to the Centers for Disease Control and Prevention, about 28 million people fall ill each year in the United States due to foodborne illnesses; about 3,000 die. Remember and the cost of constant monitoring and monitoring efforts cost billions to the industry. In 2017, IBM's vice president of food safety and Walmart, Frank Yiannas, demonstrated how the blockchain can facilitate the rapid response to an epidemic or simply make compliance with regulatory inspections easier. Yiannas has assigned a team to trace the origin of a single mango package using traditional methods. It took 6 days, 18 hours and 26 seconds. Using the blockchain, it took 2 seconds.
Since the Food Trust blockchain has been activated, over 2 million transactions have been recorded and over 4 million individual products have been registered by Walmart, Kroger and other big names, according to Brigid McDermott, vice president of IBM Food Trust, who is supervising the project. This, of course, is only a small part of the food that moves through the system with only a small group of key actors involved. (There are about 1.2 million food suppliers, 200,000 retailers and 500 million farmers worldwide).
To begin with, each of the participating suppliers, including children's foods Driscoll & # 39; s, Dole, Nestle, Unilever and Tyson Foods, began to trace part of their food from farm to table. "We are starting with a limited number of products," says McDermott. "We are not in scale, here is the next, but we have moved from a one-off situation, carefully controlled to one in which we have production data and real products that go through the system."
IBM is not the only Fortune 500 company whose blockchain efforts are starting to materialize. A consortium called R3 has over 100 of the largest financial services companies in the world and its participants continue to announce new partnerships and initiatives. But what about Ethereum and that original mission? When will that great equalization "Web 3.0" arrive, and whatever happened to Lubin's big dreams?
Spawn of the Genius Alien
The office of ConsenSys, the for-profit corporation that now serves as a home base in Lubin, in Brooklyn, New York, looks like a world away from IBM's downed corporate campuses. It's far enough from Jamaica. The building is located in Flatbush, a gritty industrial neighborhood dominated by huge and gigantic warehouse spaces, and its entrance door is surrounded by graffiti and covered by an explosion of decals. A sign on the sidewalk in front of a café on the ground floor advertises his special dishes: "cannabis cold brew" and "kombucha on tap". On a recent afternoon, the heavy metal entrance door opened to sip a flock of trendy hipsters and techhies carrying Wiffle's ball bats for a team building exercise.
Initially, on his return to Jamaica, Lubin was intent on maintaining his island lifestyle and participating in the blockchain revolution from afar. But it did not take long for him to go all in. Within a few weeks, towards the end of January, Wired magazine saw him at a bitcoin conference in Miami in the company of his new child-faced friend. Buterin, he explained to the journalist, was "an alien genius who had arrived on this planet to deliver the sacrosanct gift of decentralization".
With Lubin's background in both technology and business, he quickly became a key strategist and assumed the title of chief operating officer of the entity that would bring Buterin's vision to fruition. After that, things moved quickly. In Switzerland, a foundation headquarters was established ("We were afraid of how the United States would treat blockchain projects," recalls Lubin). In July 2014, Buterin, Lubin and the main team launched a "pre-sale" for a new cryptocurrency called Ether that was to act as a native token on the Ethereum platform.
At that point, the news of the great idea of Buterin had spread through the blogs and chat rooms frequented by the small and obsessive bitcoin community. His white paper had been widely read, and the anticipation of the launch of the Ether coin had been going on for months. The presale of the coin collected 3,700 bitcoins in the first 12 hours, worth $ 2.3 million. When he finished six weeks later, he had sold almost 10 times.
The money was used to finance the activities of Ethereum Switzerland GmbH and the Ethereum Foundation, the two organizations established to oversee the project. Lubin founded ConsenSys in the months leading up to the launch of the 2015 platform to create applications on Ethereum and catalyze the developer community to join him in doing so. He chose to found in New York City to help "activate" the United States.
The growth of ConsenSys, like the growth of Ethereum itself, has been explosive. Today, the company has 1,000 employees, working in 28 countries, some from their homes or cafes, some in formal office configurations in Brooklyn; San Francisco; London; Tel Aviv, Israel; Bucharest, Romania; and Sydney and Queensland, Australia. The company structure is inspired by the utopian ideals of Lubin. Employees choose their titles and, instead of a traditional hierarchy, there is a governance structure called "holocracy", a decentralized management system in which power is "distributed" among self-organized groups. Funds are distributed to individual projects by a "resource allocation circle" – individuals chosen by their collaborators to serve based on their abilities.
In Brooklyn, Lubin's desk sits in the far corner of a vast open work area crammed with those of casually dressed coders, who furiously tap their computers. In the afternoon he wears a light brown shorts, a T-shirt and a pair of Nike shower shoes. At 53, he appears to be the oldest in the room, further distinguished by a completely shaved head.
While IBM was creating Hyperledger, ConsenSys initially focused on building the underlying infrastructure for what Lubin and Buterin define as their "virtual machine", the global network of thousands of interconnected computers running the ever-growing Ethereum blockchain . And in the months following its publication, the ConsenSys programmers invented tools that would make it easier and more attractive for independent developers to create applications that could be run on Ethereum.
One of these was a plug-in for Google's Chrome browser, Metamask, which provides a portal that allows developers to connect directly to the Ethereum blockchain through the World Wide Web. Another, Truffle, referred to as "Swiss Army Knife" for developers, it contains a series of tools for coding and shortcuts for the creation of new "smart contract" applications.
As a further incentive, ConsenSys has set up its own venture production firm, ConsenSys Labs, which supports entrepreneurs with funding and advice. Currently they are assisting 42 projects, with teams ranging from two to 50 employees, according to Ron Garrett, the studio's managing partner. Garrett and others from ConsenSys refer to the types of applications that will eventually populate Ethereum and other public blockchains (a number of would-be Ethereum usurpers have been launched in the last few months with their native tokens) as Web 3.0 applications, or Dapps, for decentralized applications.
Perhaps the biggest proof that ConsenSys and Ethereum
they started to mature and by 2017 both had built enough basic ecosystem infrastructure to start addressing the concerns that Cuomo had recognized a couple of years earlier.
To make sure that Ethereum is attractive to companies as the Blockchain evolves, Lubin has attracted some of the key developers involved in creating the IBM Hyperledger fabric and other corporate blockchains. He put them to work to design ways to build private and authorized blockchains, the so-called "side chains", outside the public blockchain.
John Wolpert, a former IBM executive who served as the global leader in Cuomo's blockchain products, joined Lubin shortly after the launch of Hyperledger Fabric in 2017. "Do you want to start business on the next Internet?" Wolpert remembers Lubin by asking him. "Joe is pretty hard to say no," he adds. "And I was thrilled because I'm an application guy … Now that Ethereum has matured, we can do really interesting things … Follow the ecosystem and the ecosystem is clearly behind the Ethereum chain."
Wolpert believes that by 2020 the distinction between private and public blockchains will disappear and most will become increasingly interoperable and connected.
Clark Thompson, who arrived from R3, a consortium of finance companies that built Corda, a platform for banking services, notes that there is "a huge difference between a community of several hundred thousand active developers "and smaller teams dedicated to commercial sponsorship applications.
"You literally have over 100,000 people actively contributing to the code base," says Thompson, head of global solutions for the architect at ConsenSys. Any suggestion that Ethereum can not compete for corporate affairs because it does not offer a "walled garden" that shields proprietary information from the public, such as Corda or Hyperledger, is "an artifact," says Thompson. "It's a piece of the past, it's not true anymore."
In 2017, the Ethereum Foundation itself pushed for the foundation of an organization called the Enterprise Ethereum Alliance (EEA) to develop technical standards that guarantee the interoperability of different types of authorized blockchains. It will work on the Ethereum blockchain but will also interact with the rest of the public blockchain. He now works with over 500 members, including JPMorgan, Intel and Microsoft.
Initially, says Thompson, the blockchain movement was dominated by "a lot of 20-year-old black-t-shirts who said," We're about to blow up the banks and we're decentralizing everything. " "Today, he says," there is a continuum, and where we provide a solution on the continuum will determine the scale, reliability, security and, in particular, the regulation that must be met to support it. And it's already happening. I would say that last year was about demonstrating the concept. This is a year of pilots. "
Ron Resnick, former 4G lead developer for Intel, who now directs EEA, says some financial services, including Santander and JPMorgan, are already integrating Ethereum-based blockchains into their settlement business and others purposes. But the transition to widespread use is likely to be gradual and will not start in earnest until the standards guaranteeing interoperability are completed, probably next year.
Today Lubin is irritated by the fact that private companies can not operate with the confidentiality and security they need on the Ethereum blockchain. "We have a lot of exciting and active projects," he says, filling up the supply chain and ConsenSys banking initiatives. "IBM only has a bigger marketing budget than us."
The blockchain ecosystem is often compared to the state of the World Wide Web in 1993, just before take-off. Wolpert, however, believes that the analogy is flawed. "I keep hearing about 1993," he told an audience at the San Francisco Distributed conference last July. "I heard about it last year and people are still saying it, it seems like we're static, I think it's because we're really in the years somewhere, maybe in the years" 70. We have a long way to go and we will go through epic divergences and convergences, and it is OK. "
Michael Casey, coautore del libro 2018 "La macchina della verità: la blockchain e il futuro di tutto" e un consulente senior per la Digital Currency Initiative presso il Media Lab del MIT, dice che prima dell'adozione di massa possono verificarsi Ethereum e altre società di blockchain è necessario affrontare e aggiornare la velocità e la scalabilità della tecnologia, problemi che migliaia di sviluppatori stanno attivamente lavorando per risolvere. "Internet è stato sviluppato in oltre 40 anni. È roba davvero complicata ", dice. "La tecnologia deve evolversi e diventare scalabile."
Quei tipi di commenti degli esperti hanno fatto poco per smorzare la pubblicità. Il 2017 ha visto una frenesia speculativa che molti hanno paragonato alla bolla delle dot-com, quando decine di società basate su blockchain – alcune delle quali miravano a competere direttamente con Ethereum, alcune semplicemente cercando di costruirle – hanno anche raccolto denaro attraverso la cosiddetta moneta iniziale offerte. Ciò ha portato a uno dei tanti cicli di boom-and-bust della criptovaluta visti dall'invenzione del bitcoin, con un valore che sale a quasi $ 20.000, e Ethereum che sale da un prezzo del 2015 di circa 46 centesimi a $ 1.300. (A febbraio, la rivista Forbes ha messo la fortuna di Lubin, basata in gran parte sulle sue partecipazioni stimate di Ether, tra $ 1 e $ 5 miliardi, Lubin ha rifiutato di confermarlo).
Sebbene l'hype si sia stabilizzato per il momento, con il bitcoin valutato, alla fine di ottobre, circa $ 6,300 e Ethereum del valore di circa $ 200, pochi sarebbero sorpresi di vederlo ripartire. "L'intero sistema globale di tenuta dei registri passerà attraverso un cambio di paradigma di 5000 anni", afferma Casey. "Abbiamo rintracciato e controllato i record, e i record sono lo strato fondamentale dei sistemi di scambio economico, tornano alle tavolette sumeriche. Ne avevamo versioni centralizzate per 5.000 anni. Ora, stiamo facendo una cosa decentralizzata che è un punto di svolta ".