Decentralized Applications Q&A Panel
In this half-hour session, Forbes Cryptomarkets Lead Correspondent Leslie Ankney facilitates a panel discussion about the future of decentralized applications (dapps). First, the expert panelists share their thoughts on the future of cryptocurrencies and dapps in general. Next, they hone in on the current shortcomings of this new technology, and they describe the steps required to make dapps viable for widespread enterprise usage. Then, they discuss the benefits of Hedera Hashgraph, especially in relation to their organizations’ use cases. Finally, they provide tips for developers and entrepreneurs alike to get involved with Hedera and distributed ledger technology. The panel covers the past, present, and future of dapps, and leaves the audience with expert predictions about the future of distributed ledger technologies.
Leslie Ankney | Lead Correspondent | Forbes Cryptomarkets
Michael Feng | CEO, CoinAlpha, Inc.
Nhat Thai Nguyen | Co-Founder & CEO, Organify
Simon Olson | Director of New Business Development and Investor Relations, Magazine Luiza (Magalu)
Daniel Rice | Co-Founder & CTO, Sagewise
John Best | CEO, Best Innovation Group (CU Ledger)
- Where do you see crypto headed, overall? Timestamp: [2:10]
- What is the future of dapps? Timestamp: [5:39]
- How far are we from dapps providing real value and convenience? Timestamp: [10:28]
- Why did you choose to build on Hedera? Timestamp: [14:52]
- What is the core value proposition of your dapp project? Timestamp: [20:30]
- What are the steps to getting involved with Hedera? Timestamp: [26:01]
- Where will dapps be five years from now? Timestamp: [31:42]
____[Leslie Ankney] Question 1: ____
Where do you see crypto headed, overall?
__[John Best]: __
I’ll jump in, I guess, first. First of all, I just want to real quickly thank you for the wonderful introduction. I’d love to take all the credit for CU Ledger, but I have some amazing co-founders: Rick Cranston, Julie Esser, John Ainsworth, just fantastic people.
But, for crypto in general—if we’re talking about currency, and that’s kind of what I feel like when you say crypto—that’s where we’re headed. I feel like we’ve been in this Napster mode, for a while. It’s like, not quite legal, but it has a lot of use case. And we all like music, and we like this idea of not having to buy the whole album. But, there’s a lot of us that are kind of uncomfortable. And so, I think, you know, we’re headed towards the iTunes. That would be my sort of assessment.
In my opinion, I think crypto is really the fusion of money and tech. Whatever happens, it’ll be a major financial asset class in a few years, either in terms of native utility tokens, which are tokens which capture the value of a network, or via digital, traditional assets, where they’re next generation, more efficient, and transparent versions of paper, equities, debt, and other financial instruments.
For me, I guess, I really want to see how the general financial system might be looking to adopt cryptos, and how we can help to make that happen. Now, like, it’s really hard to see right now with the low transaction speed, but hopefully a new platform like Hedera can help to make that happen.
I think biggest thing for me is if we don’t solve some of these usability issues that exist right now in cryptocurrency, then we’re probably not really going anywhere. So, it’s awesome to see most of the audience was developers, and I think those are the biggest questions, right? For us to get energy back into the space, where it’s… I think from a year ago, and now obviously, we’re kinda in this barrish market right now. And, a lot of that is just the reality of the difficulty of using it and the difficulty of using the apps that are on the platforms right now—the costs associated, all those things. So, I think that’s what has to change.
Echoing John’s initial comments, I think that what we’re gonna see is probably an evolution or a maturation process. So, it reminds me a lot of the evolution of venture capital. In venture capital, initially you were able to fund a project based on an idea. Then, it became a working prototype, and nowadays you need a working prototype and you have to be able to show growth. So, I think the bar of who is able to get funding is going to consistently rise.
And as you said John, you know, regulators are still trying to figure this out. We’re seeing regulation come to cryptocurrencies. But, as far as where the market is headed, we’re looking to see all of this backend, all of this wonderful development and usability, just be integrated into the system so that people can use blockchain, use distributed ledger technology, use Hedera, without actually having to understand how they’re using it.
Question 2: What about the future of dapps?
You know, from my perspective, dapps will just become apps. You know you think about the internet and how it kind of grew. To begin with, everybody needed a website, and there were lots of people who had problems that the internet would solve. But, it took time for them to understand, you know. If you remember, you know, IP, not in terms of intellectual property but internet protocol. An IP address was a foreign concept, but I would argue now it’s pretty generic in our lexicon, right? We’re going to see that same thing happen here.
I think that the dapps will become sort of a platform… they’ll have more characteristics with a platform with a platform than an app, really. I think that’s the big play here. And, you saw it in Patrick’s demo, where it’s much more… it’s rising more to a higher level to bring that utility.
And I think Simon’s comments are very important. The friction, I think, is identity. At CU Ledger, that is one of the things that we’re really super focused on, is identity, self-sovereign identity in general, because you can’t transact or do anything until you know who you’re dealing with. And, I love the combination of those two technologies: Hedera and looking at the Sovereign platform. So, we’ve been looking into that for some time.
I just wanted to jump in on this question because I think the biggest thing around dapps is, again, the usability is not there. If we solve the usability issues, then potentially it can be useful. But, if they’re hard to use, or you have to install special plug-ins, or it doesn’t work on your phone, it’s just not useful to people. And, the general population doesn’t care about decentralization. I don’t think it’s a feature for them. There might be uses for it that are, and side benefits, but just selling it as, “this is a decentralized version of Uber…” I don’t think anyone really cares.
At CoinAlpha, we’ve been running dapps for the past year, with millions of dollars worth of transactions flowing through them. We’ve learned a lot through that process. A lot of assumptions we had going into it were challenged, or flat out wrong. But, we also learned a lot of things.
One of the things we learned is that, I think, eventually… everyone wants to, kind of, believe that the end state of dapps being kinda like how everything is used will happen, and we totally believe in that as well. But, I think the path to get there—dapps have to deliver something that is not just incrementally faster or more efficient.
We have to give people something they can’t otherwise get today. And, in a lot of cases… what we’ve learned that the people that dapps are really good for are individuals. They’re individuals that can access something that is currently only available to large institutions or companies. And, because they are essentially able to access things that they couldn’t otherwise get, which in our case are financial products, that’s what they’re attracted and they’re willing to go for that pain point of installing Chrome extensions, and other pieces of software, and learning new technologies.
We think that for large companies, because the centralized alternatives to dapps already kind of work well and are familiar, the incremental benefits in terms of efficiency or even privacy are kind of outweighed by the blockers in terms of adopting new technology. So, we think that for dapps to really flourish, they really should focus on growing that early adopter, individual community.
Actually, this question especially is very applicable to us. With Organify, we’re working with organic farmers. And if you think of farmers, you don’t think technology.
So, we had to design for the future of dapps, so that… to be honest, like, our farmers right now, they’re logging in and they already have that MetaMask inbuilt so they don’t need to install any additional Chrome extension to be able to start doing those transactions.
So, that’s where I see, to your point John, that you use it just like a normal application with your login and password. But, on the backend, it is a dapp and they have no idea. But that data is going through the Ethereum network.
So, I want to get into this a little bit more. So far, what’s been built so far has really be sidelined by slow consensus on platforms. So, as excited we might be about a decentralized rideshare or P2P marketplace, or you name it, there really hasn’t been a way to leverage it so far. We can look at CryptoKitties on Ethereum, and for as adorable as it is—and it’s a great test of the network—it doesn’t show how much dapps can change our lives.
People want convenience and people want a real value proposition from using dapps. So, how far do you think we are from that happening?
To combine the last two questions… anyone who lived through Web 1.0, we’ve seen this movie before. There’s going to be a transitionary period. People are going to make a fortune creating, you know, a consulting business to bring people onto distributed ledgers, just like they made a fortune with bringing people online via websites and things like that. There’s going to be America Onlines, there is going to be Netscapes. They’re going to come and go.
But, to me, I am really excited about the possibilities. Because, I think what is essentially going to happen is the web is going to be turned upside-down. As Patrick alluded to in his presentation, there’s no immutable law of physics that says the web needs to be monetized via advertising. It just evolved that way. It could have evolved in any other enumerate ways, and I think that the ascendance of micropayments is going to enable a lot of other things, the likes of which we can’t even fathom at this point. So, I’m pretty optimistic.
I like to think of it in two terms. Technology either comes in revolution or evolution. We’ve seen it in the finance business. A good example of a revolutionary platform is taking a picture of a check. That just burned like wildfire. It was something that was convenient, it met all the criteria you were talking about, and people wanted it.
But, there are other things that are evolutionary. Because of the speed of this—and I think we’re looking at it from the consumer’s point of view, but we also have to think of those consumers as content builders and other people that are… you know, Hearo.fm is a great example—and what it can do to enable this economy that’s moving more toward folks who are individually employed or SEP accounts, those sort of things.
And so, I see this as revolutionary. It has scale. I think people will leave a platform to get to it, because I think it brings that value. And, the other differentiator is it is something that didn’t exist before. And so, with those three things, I think it could be faster than we think, just because people tend to adopt that sort of stuff very quickly. But, it looks evolutionary because, like the smartphone, we had Blackberries forever. It was the AppStore, and those sorts of things that were the game-changers.
To me, I think speed is baseline. But, that’s not the reason people aren’t using dapps. People aren’t using dapps today, because, as a product person, you have to fire a product in order to hire a new product. And right now, even something like CryptoKitties, compared to kind of like the top games right now, like Clash of Clans, anything on mobile you can think of, it’s a pretty poor equivalent. So, I think that for dapps to kind of survive, they have to give people something they can’t get otherwise today. And that something might be, you know, more fun, or something even more native to the decentralized ecosystem.
So, do you think this idea of someone being able to use micropayments to, say, sell their own data in medical research, or do a job in some sort of decentralized economy is part of that?
Yeah, absolutely. And, I mean, do you want to finish that?
Yeah, I think, absolutely. That’s an example of something that is enabling something that someone is not able to get today in a more centralized world.
And, along with that use case. So, just this last 48 hours, Organify created a new use case to use micropayments. For the first time ever, you can actually—you know, it’s great to know about your food, and how great it was prepared, but there is nothing you can do about it. Well, using micropayments, you can now send a tip to the farmer. And never before that you can do it, without needing to open a bank account, right? Like, not everyone has a bank account. Now you can actually tip your farmer, and say, “hey, appreciate the great stuff you’re doing.” So, giving people something that they haven’t been able to do before using micropayments on a decentralized application will really help to push adoption.
Addressing the unbanked is really, really huge.
Why did you choose to build on Hedera over all the other platforms out there. Where do you see the opportunity in Hedera, and what do you see with it as different to any of the existing blockchains and platforms?
For our SDK, which is something we originally built for Ethereum, we didn’t get to build what we wanted to build because of gas associated with it. Essentially, the way our SDK works is it gets inserted in other people’s code and it adds some legal infrastructure. And, because of the way it works, it’s actually increasing the gas cost of every transaction that runs on that particular dapp. So, in the case of Ethereum, we didn’t get to build what we really wanted to build because the gas costs were too high, especially with things like proxy contract communication that we wanted to do.
So, when I started reading about Hedera, I think the first thing that I was interested in was can we get the cost down enough that it won’t matter that our SDK is installed in someone’s application. And, that’s why we’re here basically. I think that’s the biggest reason.
I guess, in terms of why Hedera, and why now, it reminds me a lot of the evolution of artificial intelligence. So, the other day I was watching Kai Fu Lee, who’s an artificial intelligence pioneer. And, what he talked about was the evolution or the phases that it passed through.
So, first they tried rules-based systems, but they were not scalable. And then they tried data-based systems but the datasets weren’t big enough. And finally, now the reason why apparently it’s taking off is because they’re using a data-based approach and the datasets are enormous, enabling them to derive information from it.
So, the question then becomes, you know, in the DLT space, why Hedera and why now? And I think, heretofore, when you tried to do something the throughput wasn’t good, the energy use wasn’t good, you had to use these expensive mining rigs, the transaction costs were very high… And I think, what’s beautiful about—or elegant, or eloquent about Hedera—is it really combines all these different features that make up for the shortcomings of the blockchain system.
__[Michael Feng]: __
So, one question off the side, too. How can we fix some of the bugs that Solidity, like all of the bug classes Solidity has reintroduced?
So, I think it’s important to note that, it’s simply a programming language. Any programmer is going to introduce bugs. It’s simply an abstraction layer on top of some type of virtual machine, whether it’s Ethereum Virtual Machine or WebAssembly Virtual Machine that’s on a blockchain. So, I think it’s more of a programming abstraction, and the responsibility to address bugs lies more on the tooling and developer side.
So, I think that’s something that will continue to harden those systems. There’s been a lot of upgrades and improvements to Ethereum and Solidity since the beginning, and the beauty of using that language is you can automatically gain those benefits right away. But, there are other bugs that can exist even under the layer that the developers are coding in in the virtual machine layer. So, even if you code something up correctly in Solidity, there can still be an underlying issue that you don’t even see in your code because of the virtual machine. And, that problem is probably going to exist on other platforms as well.
Yeah, and hopefully auditing and better bug-bounty programs will help find some of this.
So, I’ll just go back to why Hedera. Basically, we want to be able to have information from when the animal was born and what it ate throughout. So, there is a lot of transaction of information going through all the time. And, all the current blockchain platforms, they don’t have the same support structure for the amount of transactions that we need.
So, when I came across of Hedera being able to take on a lot of transactions, I felt like this is the right platform to be on to be able to scale this out to the million farmers out there that are very in need of this solution.
So, that’s why we came here this weekend to really be able to test that technology out.
Yeah, I can see that, for showing an animal’s whole life-cycle, to report each step of the process you definitely need something that’s fast and you need something that you can trust and that can handle micropayments, so that makes a lot of sense.
Well, I wanted to get into the core value proposition of each of your dapp projects. And we’ve talked a little bit now about Organify and how that works. So, John, could you tell me a little bit about what you’re working on?
Sure. So, we have two primary projects. The one that most everyone’s heard of is CU Ledger. And the value proposition of CU Ledger—and something that we didn’t really talk about—one of the big value propositions of this DLT technology is it’s collaborative in nature. It allows organizations to work together in a way that they don’t necessarily have to trust each other, or they can build a trust framework.
CU Ledger is really focused in on, you know you mentioned, the unbanked. And, the biggest barrier—and you hit the nail on the head—to folks getting involved in the banking system, which by the way is the number one stepping stone to really succeeding in life if you look at World Bank and all the different reporting out there, is getting enough credentials to get into the bank, to have the right things to pass the KYC, the AML, those sorts of things.
So, CU Ledger starts off with an identity solution that we’re looking to be credit-union-wide called myCUID, that would be a portable identity that you own, that’s a self-sovereign identity, something that you take with you. So it’s different than the current identity, partnering with Evernym, which is one of the founders of Sovereign, and allowing people to really just have their identity and store these sorts of attributes and these sorts of things in a world that we’ve never had before. It’s not Google or somebody taking that data, and the reason it’s free is they’re monetizing by selling it. I love the use of consent, that word Patrick used. So, that’s the value proposition is to have a platform that promotes collaboration amongst the credit unions in a way they’ve never been able to do before.
And, honestly, who’s happy with the number of usernames and passwords you have? Anybody, raise your hand if you’re some sort of sadist, right?
Right. So, I think one person raised their hand. That’s a weird person. But, other than that, nobody’s happy with that. And it’s again, before you can use any of these solutions, it’s where we’ve got to start. So, that’s CU Ledger’s mission.
And then, I’m also proud to announce HashLabs, which is our partner. We’re working on CXAU, which is a “gold-backed” cryptocurrency. And when I say “gold-backed,” I don’t mean—I don’t know there is a lot of things out there—I mean working with the Royal Canadian Mint, Dillon Gage, our partners, people who actually do this where it’s an actual currency that we can work with and build together. And, that’s going to help a lot of people who need that in countries and different areas. If you get a chance, talk to the experts on that…
A sort of stablecoin there?
Yeah, I think so. I mean, from our perspective, it’s helpful if you’re in countries where you really need to convert that to something that you can really keep track of. Again, it does come back to that. It’s almost a sovereign account. You know, it’s kind of a similar concept, that self-sovereigness. So, that’s us.
Dan, could you tell us about Sagewise?
So, our core value proposition is mainly that we believe there will be bugs, and there will be reasons why people need to change contracts. And so, we’re building an SDK that helps people do that in a responsible way.
I think on Ethereum we’ve seen a lot of contracts where actually the owner has these kind of admin right over it, and we’ve actually seen hacks occur because of that, and different things like that. So we, a long time ago, started looking at this, going back to the Dow and saying, “how can we actually stop these issues occuring on the networks?” We kind of mix what we are doing with legal, because my co-founder is a securities attorney by training. And, so, our focus is bringing law to blockchain essentially, in a responsible way.
If you look at a lot of the catastrophes that have happened in financial markets over the past twenty years—like Lehman brothers defaulting, or Bernie Madoff, you know, defrauded people out of billions of dollars—a lot of it comes down to the fact that traditional finance requires trust and isn’t very transparent.
Now, with blockchain technology and smart contracts, we finally have the ability to codify both asset ownership and also the logic entailed in financial contracts on the blockchain. So, at CoinAlpha, we create what we call decentralized financial products, and we focus on a protocol that we call the basket protocol, which enables individuals to create, essentially, tokens that hold a set of other tokens. We believe that this represents an evolution over the traditional fund structure. So, that enables, you know, people who want to be asset managers to create vehicles who couldn’t otherwise do it before. It creates liquidity providers to generate arbitrage profits from providing liquidity to these due instruments. And finally, it enables investors to have infinite customization and selection over what they can invest into.
And for our next question, is there anything we haven’t addressed so far? Oh, I wanted—this question is for all of you. Mainly for developers, but also for enterprise business owners.
If you wanted to do something with Hedera, if your company wanted to run on Hedera, walk me through the steps for entrepreneurs, and then walk me through the steps for a developer within a company that says, “hey, I want to use this. I think we should build on this.”
What kind of issues are going to come up? What kind of obstacles are they going to face along the way? What are some ways they can address it? Let’s just start with, entrepreneurs, what are the steps to get involved?
So, I was thinking more about people within companies, developers trying to do things within companies, and I think it’s actually super interesting because it reminds me a lot of the children’s story, “The Boy Who Cried Wolf.”
So, for those in the audience who are from other countries… Basically, the story is there is a little boy, and he is sort of guarding the city at night, and he cries, “Wolf.” The first time he does it, all the villagers come out ready to defend themselves, you know, from the wolf. And, the second time he does it, and there’s no wolf, half the villagers come. And then, the third time he does it, and there really is a wolf, no one comes.
So, I think that basically, one thing that developers inside of companies are going to have to overcome is the fact that there was a lot of hype around blockchain, and it was a wonderful revolutionary first-generation technology. But, the problems, as we talked about, you know, they couldn’t process very many transactions per second. It wasn’t enterprise grade, aBFT secure. The transaction costs associated with processing a transaction were high. So, it was an interesting technology, but it wasn’t really feasible at enterprise scale.
So, I think there is going to be an issue to overcome, but that’s also going to create an opportunity. The issue to overcome is that a lot of people at corporations are going to be like, “yeah, I looked at that. There’s really nothing there. It’s not feasible.”
Where the opportunity is—for those developers who are going and able to convince their CEOs and CTOs to actually embrace the technology—I think we finally have a technology that overcomes those initial issues, and that people who are able to launch things now are going to be a step ahead of their competitors.
I’ll add to that for entrepreneurs, because it happened to us. Before you choose a blockchain platform to develop on, it could be Hedera or anything else, you really need to marry your use case to that platform. You need to find that… does your use case need that platform capabilities? Because each platform would have their pro and cons, right?
So, if you have like a low transaction level and very high transaction value, and you just put it on a platform that doesn’t have a security, it’s not going to work. So you really need, as a team, to decide that platform is the right fit for your use case.
I think of applications as ongoing conversations between developers and users. And so, on the developer’s side, to use a platform, one thing you need is a way to interact reliably with the network. We call that a client, in typical terms. So, having a robust client that’s well documented, that works often, is really important.
On the user’s side, users need some way to interact with the network as well in order to access the application. Today we call that a wallet. And so, having that robust wallet infrastructure as well as a robust client infrastructure we think is key for a platform to succeed.
I think that’s very important that you talk about it as, “well, this is not blockchain, it’s something different.” You’re right, there’s been so much hype around blockchain and a lot of companies probably don’t want to hear it. So, talking about what it’s not maybe before what it is might be a better approach.
What about the steps to onboarding if you were starting to develop with Hedera?
I still think it comes down mostly to, you know, non-technical things like economics. The big companies that we work with are looking at, you know, what kind of transaction volume can we put through the network? and how much is it going to cost us? So, one of the problems with a lot of the networks is they have variable cost transactions based on how busy the network is at the time. That’s a huge problem, and an enterprise isn’t going to sign up for an unknown cost of transaction cost, basically.
Internally, it’s a marketing effort to get people to sign on at a high level for a project using a certain technology stack. And, it’s especially true for this type of technology. Enterprises aren’t interested necessarily in decentralizing their technology, they’re interested in controlling everything in their ecosystem in a lot of cases. So, that can’t be the sell, it has to be something else.
So, real quick. You got to get a live chicken, because there is going to be a sacrifice involved. And then you go to Hedera. You download the SDK. I’d start off with the private permissioned SDK. Learn that. I want to echo what Michael said. Start to build a scaffolding, or a framework, or a client, or whatever you want to call around it. And give your, you know… put a bounty out there. Give your developers… say, “hey, whoever does this wins whatever gadget it is they want of the week.” Give them something to do.
Awesome. Well, we just have a little time left. So, thirty seconds each. This is going to be a quickfire, shotgun round.
It’s five years from now. Where are dapps today? Go.
It’s continuous execution. You have these wallets, but inside the wallets you also have these contracts that are coming to fruition, things like, Michael’s product, and you’re seeing them, sort of, come in. You have some more insight into… if you’re a business owner or entrepreneur, your cash flow. If you’re a person, into your daily life and what you’re doing.
Just like the blockchain enables you to be your own bank, it also enables you to be your own asset custodian. So, instead of having to give your capital to some fund manager who might lose it, you’re purchasing assets you control.
Five years from now, I want to see everyone using a dapp without knowing they’re using a dapp because you’ve done the interface layer for every person to use it so seamlessly that they just use it for whatever they need.
If they are being used, then I think the transaction confidence will be a lot higher. Like credit cards first coming onto the internet—people were afraid to use them—cryptocurrency has to get to the same place.
Facebook is gone, having failed to acquire the dapp equivalent of Instagram or Whatsapp. Google is severely hamstrung and relying on other businesses because people have moved from advertising focus of monetization for the web to other forms, perhaps micropayments.
Thank you very much.