There have been several developments in Crypto since the beginning of this year Most notably spot Bitcoin ETF started Trading here in the US we also saw Bitcoin reach new all-time highs so with All these developments how do you think That's impacting crypto sentiment and Adoption so in general I think these Developments are driving adoption and They are driving uh um kind of the Sentiment in the market and it's not Just in the US US is by far the biggest Market but we're seeing this in Europe And Asia there is a global I'll call it Regulatory convergence going on where Crypto is coming from outside the Regulated mainstream into the regulated Environment and that is that's driving Adoption because most of the world's Capital is it's in regulated markets and It's behind sort of regulatory controls Like Pension funds and large investment Funds and unless it's something like a Regulated structured uh a product or It's listed on an exchange they really Can't buy it they they'd be violating Their kind of responsibility to their Clients so obviously you're big on Ethereum you wrote a book on ethereum For business after all so I'm curious to Get your take on some current events Applying to ethereum recently the Network went through its latest upgrade Denune which is meant to help with
Scalability so how has that upgrade Influenced adoption and sentiment to Ethereum and either specifically so Ethereum's been doing this for quite a While now and denin in particular isn't A major upgrade although it's got some Important features there's two things Worth taking away from denan the first Is that like all these other previous Ethereum upgrades they did this Flawlessly no drama no downtime it's Kind of really amazing when you think About it right they moved several Hundred billion dollars of financial Infrastructure from one version to the Next without a hiccup so that's the First thing which is just the maturity Of the organization the people the Engineers behind it the second thing Though is that first the merge that Happened you know about I think it was 12 months ago and now denin they are Both milestones in terms of driving down The cost of transactions and denin in Particular built on the merge and now We're seeing some of the transaction Costs on ethereum they are falling well Below a penny some of them were allow Down five cent down to 5 cents Previously but now we're below a penny And this may not seem like a big deal But particularly for industrial Customers you're talking about I've got Clients for example they want to do a
Million or more transactions a day for a Single product line to manage their Supply chains so when you start to talk About those volumes really really low Transaction costs are extremely Important another development we're Following obviously a lot of asset Managers have applications pending Before the SEC for spot ether ETF some Of those asset managers include Black Rock vanc and grayscale and last time You were on the show on crypto world Back in September you were optimistic it Seemed that these applications will in Fact get appr approved and you noted That if they do in fact get approved There will be a tital wave of Institutional money that flows into the Space so are you still feeling Optimistic that these ether ETFs will Get approved and what will change if They do get approved so I'm very Optimistic the experience with the Bitcoin ETFs has been very positive There's the same kind of thing pending With the ethereum ones that are are Going to be just as positive what is Going to happen eventually and I'm a Little surprised it hasn't happened yet Is that people don't treat Bitcoin and Ethereum differently they both see them As cryptocurrencies but really Bitcoin Has become the kind of digital gold it Is a crypto asset whereas ethereum is
Really shaping up as a crypto Computing Platform and so if you want to hold an Asset just for appreciation people are Going to buy Bitcoin if you want to Invest in a Computing platform for Financial services and business Operations then ethereum and eth in Particular is is going to be your Choice now we recently learned that the SEC is reportedly investigating the Ethereum foundation Forbes is reporting That the SEC is seeking to classify eth As a security so what's your reaction to That and what will happen if it is in Fact deemed a security so two things I Mean first of all there's been all these Reports but there haven't been a lot of Facts and and I could be wrong because I Haven't seen the latest data but I don't Think the SEC themselves have actually Said anything on this topic officially You know I feel like in the Bitcoin Discussion first of all they delayed the Bitcoin conversation a couple of times They they allowed the maximum timeline And secondly there were always rumors Flying around I think it would be Premature to like worry too much about That but Obviously even if ethereum is Categorized as a security it doesn't Change the fact that is an extremely Valuable uh platform and we've already Worked with a lot of clients to be able
To use ethereum blockchain without ever Holding eth you can just transact Entirely in US dollars so I don't think It will be an obstacle to the adoption Of ethereum as a Computing platform and It certainly won't be an issue in Europe Or Asia where a lot of other countries Have regulatory Frameworks that support Securities and allow them we also Recently learned that black rock the World's largest asset manager got into The asset tokenization race creating a Fund on the ethereum network and black Rock is creating the fund with Securitize which is a big name in real World asset tokenization so what is that Signal to you it signals I think Something that we've expected for a long Time which is that as money comes into This crypto and blockchain ecosystem if You want a crypto asset you will buy Bitcoin but if you want a tokenized Digital asset you will buy those on the Ethereum platform and what we're seeing Now is ethereum's just become the Default choice for any kind of digital Token to any kind of tokenized asset Even if it's not a cryptocurrency if It's a real world asset gold oil you Name it it's going to be on the ethereum Ecosystem now last time you were on the Show you also mentioned that there is Going to be one blockchain ecosystem That rules them all and you believe that
Is ethereum why do you think that is so Ethereum is dominant in the same way That things like Microsoft Windows are It's not that and I always hate getting Into discussion of which platform is Better because there are always better Platforms technology keeps moving along However what happens is we tend to pick A platform that's widely adopted and it Gets a lot of momentum and we see that In Computing platforms all the time Right Windows is the world's desktop Operating system IBM has a dominant Share is the 100% share of the Mainframe Business ethereum is if you think of Ethereum as a Computing platform this Idea that we would have a single Dominant platform makes a lot of sense And if you look at the ecosystem right Now for example there's quite a few Challengers to ethereum but ethereum Itself now contains more than 40 layer 2 Networks so the real competitive action The real Innovation is now happening Inside the ethereum ecosystem not in Competition with it so that the momentum Has really changed in terms of where the Market focus is and I think that is Actually really good for the development Of applications because people are no Longer saying which network should I be On they're going to be on ethereum and Then the question is what applications Should I deploy what layer 2 Network
Should I use now your book titled Ethereum for business a plain English Guide to the use cases that generate Returns from Asset Management to Payments to supply chains was published In June and it goes through use cases For businesses so can you take us Through some of those use cases I'm Specifically interested in learning how You think blockchain technology can help Empower global supp Supply chains Absolutely so I wrote this book because I got tired of hearing people say oh Ethereum and crypto is just a is is a Hammer in search of a nail there are Lots of nails out there and in Particular supply chain is is one of my Favorites it's a really really good fit And the analogy there's a really Interesting sort of comparison to be Made between Supply chains and banking So in the world of banking if I want to Give you some money it's got to come out Of my account I can't just make money Magically appear in your account I mean If I knew how to do that I'd be retired By now I wish good exactly but in the World of supply chain believe it or not It is easy to create inventory and Subtract it anywhere you want there's no Reconciliation and there's no discipline And so if you ask a company how much Money do they have they have a pretty Good answer if you ask them how much
Inventory they're like well about two Weeks three weeks that kind of thing and The reason for that is that we don't in A disciplined way reconcile when we say Take inventory from one Warehouse and Give it to a customer or supplier but With a blockchain if I represent Inventory as a digital token the same Rules that we apply to banking can apply To any kind of asset I if I take an Asset if I want to give you a piece of Inventory a piece of Hardware or Something like that I have to remove it From my inventory in order for it to Appear in yours and basically what Blockchains allows to do is apply the Level of discipline that Banks apply to Money across the banking system and do It across Supply chains and the result Is vastly more accurate data and more Accurate data translates directly into Fewer errors less inventory required Less shipping required a smaller carbon Footprint the payoff for just being more Accurate is enormous so you touched on This but why did you feel like writing a Book focused on how ethereum can help an Enterprise was so incredibly important And necessary well it was all the things That I was talking to clients about you Know I found that there was a lot of Lack of understanding about some of the Subtleties everybody thinks ethereum It's a cryptocurrency it's for finance
And my mission for the LA much most of The last 10 years has been to put Ethereum into industry and to do that we Had to do I think three things number One we had to in a very plain English Non-technical non jargon way explain how Blockchains work and why they are Generally useful and then secondly we Had to give a good pile of very specific Examples inventory forecasting Procurement things that companies care About and then thirdly we had to address Some of these other issues that people Keep bringing up like is the carbon Footprint there should we audit it how Do we audit it how do I know if my Transactions are safe so I wanted to Make something that a corporate Executive can pick up read through in in Without being a technical expert and say Okay I Now understand how this stuff Works and how I can use it in my company So we have an election coming up How do you think blockchain technology Can help with concerns over fake votes So this is this is actually a really Important one blockchains are fantastic They have this really special property Which is that when you have a public Network like etherium all the data in The network is copied to all the major Participants in the network these are Called Network nodes and in the case of Etherum there's something like 10,000 of
Them worldwide so if if I share a Document and I create a digital Fingerprint of that document and put it On the public blockchain that Fingerprint gets shared 10,000 times Later on if somebody wants to know did This document match the original or was It tampered with all they have to do is Compare the digital Fingerprints of the Document something called a hash and if If it matches you can know that the copy You have is an exact and correct copy of The original now we already have for Example in Italy we already have a news Agency called Ansa over a million Articles a year are digitally Fingerprinted on the public ethereum Network through our software and it Allows them to make sure anyone on any Ansa website article can click through The links and verify for themselves that They're seeing the actual reporting from The actual news agency and not something That's meant to look like a news agency But was dummied up for other purposes Interesting so AI is getting a lot of Attention these days I was recently at a Fashion event and it was a fashion and Tech event but the technology that took Front and center I'm sure you can guess It generative AI you got it and we're Also hearing though about the Collaboration between Ai and blockchain Technology and you actually spoke about
This recently I heard you say that AI Could be particularly valuable when Reading and understanding blockchain Transactions can you elaborate on that And take us through some of the other Ways that Ai and blockchain can work Together and be useful so AI systems are All based on training data right you you Give them a data set you teach them About it and then they are very good at Doing things like not only identifying Patterns but also generating similar Patterns that's what a large language Model is it's trained on a lot of text And it's good at generating text well we Can train models on blockchain Transaction data and then they can be Extremely good at identifying patterns What looks like fraud what looks like a Business transaction what looks like a Uh inventory transfer what looks like a Payment so um I think analytics has a Great role to play uh with these Generative AI tools that they can be Very very good at being right most of The time they're not always perfect but A lot of times in analytics and Analysis It's fine to be right almost all the Time so it's super valuable and that's Very similar thing for example if you Train a model on software development it Can generate lots of software for you And because we test that software before We put it in production we can make use
Of generative AI for software Development without too many worries Because it's all tested before it goes Into Production I think eventually what's What will be exciting to see is Autonomous AI based commercial networks So if you think about a lot of Traditional companies the way they plan For the year is they start with this top Down model I think we're going to sell As many TVs as we did last last year Plus 5% and based on that we're going to We're going to order all the materials And we're going to plan our production But a lot of digital marketplaces think About like ride sharing or you know like Uh you know couch sharing or you know Apartment sharing those are actually More bottomup marketplaces where lots of Providers coordinate together and all Those providers are independently making Their own decisions I think with with AI Systems you can imagine the marketplace Of millions of buyers and sellers each Representing a point in the business Network all making their own decisions And working like a more like a Bottoms Up system for managing supply and demand And I think they have the potential to Make the whole ecosystem much more Efficient than the sort of top- down Planning model so I think we're going to See autonomous agents the AI will make
The decisions and the blockchain will be For executing the transactions and it Certainly will be very interesting to Continue to follow your predictions and See if it comes to fruition but as E's Global blockchain leader what are you Focused on right now what are you paying Attention to so I'm paying attention to Two things or there's two strategic Priorities that I have for this year Number one this growing regulatory Approval process and convergence Regardless of what happens in the US and I hope we get ETF approval and I hope we Get a lot of progress but already you Know for example in Europe This markets In crypto assets law is a milestone it's Already approved and it takes effect Starting in the middle of this year It's going to create a regulatory Framework for any kind of digital crypto Asset digital tokenization kind of Infrastructure and that's going to bring In all of these kind of European Banks Payment systems and assets into the Ecosystem similar rules are in place in Singapore and Japan and other parts of The world so a big chunk of the world is Moving towards a regulated market and That's going to drive huge amount of Growth in adoption so that's one big Priority for us the second second big Priority for us is the maturing of Privacy technology one of the things
That has held companies back from using Public blockchains is they're not Confident that they can keep their Business Secrets a secret we now have Built out technology using a type of Math called a zero knowledge proof that Allows you to do a complex business Agreement like a procurement agreement Or an insurance purchase agreement on a Public blockchain under privacy and that Is revolutionary the very first Customers to be able to do this are Testing it now and that's public domain Open source software so anybody will be Able to adopt it and I'm really Enthusiastic about it because I think it Solves the single biggest obstacle to Large scale Enterprise usage you Mentioned regulation where do you think The US stands as it pertains to crypto Regulation I think we're being realistic I think the ETF approval for Bitcoin is A good example of realistic acceptance Of the fact that Bitcoin ethereum they Are not going away and consumers and Businesses are best served when we have Good regulatory infrastructure that Supports you know responsible behavior One of the things that's really hard if You go ask somebody who's running a Cryptocurrency exchange or something Else it's really hard when you are Playing by the Rules or that if you don't know what the
Rules are it's extra hard and if you are Competing with other companies that Aren't subject to any rules or don't Feel they have to be it's a very unlevel Playing field so the more rules we have I think when we have clear rules it Benefits honest participants in the Market and that benefits consumers and Businesses much more than a complete Free-for all now you're here in New York From San Francisco and part of the Reason is because you were appointed as The new chairperson for the Enterprise Ethereum Alliance so I'm wondering what Are you hoping to accomplish in this Role what I really I mean first of all It was a huge honor and congratulations It was a big surprise uh and although I Feel like I've sort of been applying for The job for 10 years and I wrote a book Um but what I what I want to see Happen is right now a lot of the Discussion in the world of Cryptocurrency and blockchain is driven By individuals it's driven by uh Discussions around finance and payments And I would like to see the business Community have a thoughtful voice and on Certain topics be able to speak with one Voice about important issues Technological standards I want us to be Able to go forward and educate lots of Other companies we have you know within The EA we've got big firms like ey
Microsoft JP Morgan Chase but we've also Got uh startups like block apps and Others and we want to go forward and Tell the world you can do business in This ecosystem you can do it in a Regulatory compliant way you can be Successful and there's resources out There that will help you go down this Path in a nutshell where do you think The crypto industry is headed I think we Are headed towards being a wonderfully Boring and Incredibly productive Industry like we've had this history of Ups and downs lots of drama huge amounts Of fraud it feels like kind of the dot Boom and collapse of of the 90s and what I'm looking forward to is being more Like e-commerce starting in like 2001 or 2002 you know as it got adoption and People got comfortable with it E-commerce has had like 20 years of 20% A year growth that's what I want to see For crypto and blockchain is a couple Decades of solid boring growth doing Really useful stuff for the global Economy E's Global blockchain leader Paul Brody thank you very much for Joining us here in New York City on Crypto World thanks for having Me
