>> Announcer: Live, from Las Vegas, it's The Cube covering Interconnect, 2017. Brought to you by, IBM. >> Hey welcome back everybody, live here in Las Vegas at the Mandalay Bay IMB Interconnect 2017, it's The Cube's exclusive coverage, I'm Jon Furrier, my co-host Dave Vellante, our next guest is Ramesh Gopinath who's the VP of Block Chain Solutions and Research, welcome to The Cube. >> Thank you. >> Block chain front and center, super exciting, it's been trending pretty much throughout the conference, really is an amazing story, big props from the CEO and (mumbles) and a variety of the executives. Watching is instrumental in the future of business, we had Don Tapscott on yesterday really talking about the revolution of what this is all about and he's the author of the book, The Blockchain Revolution, but if blockchain is a game changer shift to how the business will be operating in the future, so just to level step, just give us the one on one blochchain, versus bitcoin, and why IBM is going in this direction and where it came from. >> So blockchain is all about increasing a trust in business transactions. This is something we recognize about a couple of years ago when a small team of us started playing around with, you know, the technology behind bitcoin, right. And we look at it and said hey look, here's an opportunity for the first time for companies to share some information in a secure fashion with each other and, in addition, run some workflows or business processes on top. That was an eye opener for us, it immediately told us this could have applications in all industries, right. And so what do we do first? So we said let's play around with this a little bit. We looked at existing technologies out there for blockchain and to pick the platform you tried a few use cases and realize, oh my god, there is a whole lot to be done to get a blockchain for business, right. And that's how we started this journey, almost a year and a half, two years ago. And we decided to explore that. >> And the key distinction Ramesh, and we know from just highlighting it here for the folks, is bitcoin is a currency that has a blockchain, so it's powering bitcoin. You're talking about something more fundamental for business which is using the blockchain technology for businesses and what bitcoin is to blockchain, business is to blockchain from your standpoint. >> That's right, and also I think the blockchain is really, the inspiration for it comes from bitcoin perhaps, that's a good way of thinking about it. But today for example, the hyperledger version one that was announced earlier this week at this conference is dramatically different from the underlying blockchain and bitcoin in other platforms out there, right. Because it's really built primarily based on requirements that we have gathered by working with hundreds of clients in financial services and supply chain, in public sector, et cetera, and realizing what levels of confidentiality, what levels of privacy, what level of permissioning, you know, who participates in the transaction. All of that is what has led to, what we call the (mumbles)- >> John: Okay somebody's got a question. >> John: I got a follow up on that, but go ahead. >> Uh, just one more point on this but you can follow up on my point. Give us the status of blockchain today for IBM. Lay out the solution because you move from research now to the exclusions group, you have customer action going on, sales motions, solutions motions. What is the architecture, what does it look like, what is the solution today from a blockchain standpoint? >> So, just, you asked what are you doing at a high level, essentially we have three broad, big investments. One is everything to do with you know, opensource in a hyperledger project, I mentioned that. Then there is you package that into a platform, IBM blockchain, high security business network, that was also announced earlier this week. And the third layer is again what you asked about solutions. What we have been doing over the last year, year plus is, in fact, it's an interesting journey, we started out with what I call blockchain tourism, there were a whole bunch of POC's if you want to call it that, starting with financial services initially, but in gradually other areas, like supply chain, in healthcare, et cetera. Towards the middle of 2016 we saw a transition, at least on the financial service side people were started to talk about, hey now I understand this technology and what it's capable of, let's talk about production deployments, right now I'll give you a few examples as we go along. >> Dave: So, I want to go back if I can a little bit and just get somewhat didactic for a moment. My understanding is there's three attributes, I'm sure there are many more of blockchain which are really relevant, and especially as it relates to the security if I may, it's distributed obviously, and it's been said it's virtually unhackable unless 50% of the stakeholders agree to collude, and then there's no need for a trusted third party so it reduces the threat space. Are those sort of accurate statements and when somebody says, well it's virtually unhackable, you know you tweet that and somebody says, well everything's hackable, help us understand sort of those fundaments of blockchain and why they're relevant. >> That's right, so the way I think about it is a blockchain is a trusted database. Now why is it trusted? There are three properties, I'll get to it, kind of overlaps with what you mentioned. The first one is, any transaction you do onto the database, anything that goes in it basically is done in a nonreputiable fashion. If I do something I can't say, "I didn't do that," so that helps. What goes in, you know you have that property. The second piece is, whatever goes in goes in through a vetting process, we will call it the consensus. There is some sort of a chat between parties before something goes in. Therefore, I can't unilaterally do something onto the blockchain, right, I can't, somebody else vetted what I did, that increases trust. And the third piece is, once it gets in there it cannot be tampered with. We say it's immutable sometimes, and what is that based on? There's a whole lot of topographic math behind it, but at a high level there are two aspects to it. One is, there are multiple copies. So if I change something, if I hack into mine, I'm inconsistent with what others have, so that's one. The second is, the transactions are chained together, blocks of transactions are chained together where a fingerprint of one block is put into the next. What that means is, if I tamper with the block say 15, a long blockchain, all transactions after that are invalid, I have to do a lot of work to fix it, so it's very very hard to tamper with. Of course, as with security, there's no such thing as nothing that is hackable, right, so collusions et cetera, potentially can happen. But the key is, significant increase in the level of trust is the way I would put it. >> Dave: Great, okay, and so now if we can get into sort of how people are specifically applying this technology, you guys started with the hyperledger, you know, open project, but can we get more specific in terms of how say organizations are actually deploying blockchain? >> Ramesh: So we are still running a blockchain in productions since September 6th, right, so it's been only four months. In fact that blockchain is more than a half a million blocks today, so let me tell you what that solution is so you get a sense of, and it's very prototypical in terms of, you know, all solutions that I've dealt with so far across industries. The use case is a following, so you have a buyer, you have a seller and you have a financer, that's IBM. We basically finance, shotgun financing of, think of it as channel financing or inventory finance. What happens typically is, the buyer basically orders something and the seller essentially gets approval from us to say, okay, yeah we can basically send it to the buyer. A few days go by, IBM has already paid the seller basically, just like credit cards (mumbles) consumers. A month later basically we go in, say hey look, guys, time for you to pay up and they say, look, we didn't even receive the goods. So this entire process, what I just described you can think of as a workflow where these three parties are sending messages back and forth. The way we do it in a blockchain is, this entire workflow is captured as a sequence of transactions that are registered on the blockchain. Now how does this help us? Take the example I gave, proof of delivery. If when the logistics company delivers it at the buyer's site, it's recorded on the blockchain. There is no need for a dispute. And typically disputes, basically puts a lot of capital, you know, it holds up a lot of capital right. Capital inefficiency is the problem we're after. In fact, after six months of deployment I can tell you essentially a significant improvement in terms of the time savings as well as elimination of disputes. >> John: That's a great efficiency. Who's buying, who's actually implementing it customers-wise. Can you name names? >> Ramesh: Yeah, so, examples are the, let me give you a few in financial services. So we are working with Salus Bank which does, you now, five trillion dollars worth of foreign transactions every day. They are building a netting engine called Salusnet a solution called Salusnet, and we're working with them on that. Another example is the work that we are doing with Northern Trust, where basically they have a private equity administration blockchain. In fact, it's a very interesting one because it also involves the regulator as a part of the blockchain, so that's a second example. A third one is the one we announced in January with the Depository, Trading and Clearing Corporation DTCC, and that one is for credit debitors, life cycle management, in fact all the examples if you notice, there is a life cycle like I gave in that example earlier of buying till all your goods are delivered, payment is made, those life cycles, those processes are captured as trusted processes on a trusted data store. That's basically blockchain for you, right, that's financial services. Maybe I'll touch upon two more examples to complete the story. Supply chain. I walk into a store and buy some sliced mangos at Walmart, is it safe to eat? To answer that question you need to know the provinence. Which farm in Mexico did it come from, who all touched it, who washed it, who processed it, et cetera, all the way till it got to the store. That sort of information sharing does not happen today in the supply chain. We believe with the block chain that is possible, that allow us to get a good sense of where things came from, making consumers more comfortable. Similar story can deal with pharma too. I pop a pill, I want to be sure that it's safe to have. In fact, as you know the World Health Organization says in Africa, every year a hundred thousand kids die of counterfeit malaria drugs alone, right, so imagine if you could capture these sorts of supply chain flows on a blockchain you could make dramatic improvements. >> Dave: Diamonds provenience is another one, and it's not just blood diamonds. >> Ramesh: I'm more excited by the providence of food and pharma, but diamonds- >> But there's tons of fraud in the diamond supply chain. >> Ramesh: Absolutely. >> And that's really where they're, you know- >> John: Well this brings up the whole business model disruptions, so, what are you guys seeing for the kids of conversations? Because you're getting at the business model impact significantly one, you're reducing costs of transactional costs for new measurement systems, aka blockchain, and you have all the methodology behind it, but everything from music to art to content, I mean, payments, this is like a game changer. >> Absolutely, and I think from the point of view, you know, in all of the use cases I've seen, the sort of value to the ecosystem is clean and obvious, and so you can immediately say, aha, this is going to happen overnight. But the reality is basically, it's a complex ecosystem play though. So, for example, in the supply chain use case, food safety, you need to have the farmers, the entire value chain involved, participating in some fashion on the blockchain. That is not easy to do. So there is, how do you sort of set up ecosystems is a key part of- >> John: What's your strategy there? I'm going to ask Marie when she comes on, but what's the strategy with ecosystem? Because you want to jump start this, you got to prime the pump big time. >> Ramesh: Absolutely, so there are many ways to solve this, but one approach we have taken so far, and it's obvious in all the sort of partnerships that we're working on. Take for example food safety. One way to start with it is to start with a big retailer, like a Walmart. They bring in the suppliers, and the suppliers bring in the farmers. Take the case of what we are doing in container shipping. So basically, movement of containers from point A to point B, we're trying to completely digitize that process, this is a project that we're doing with Maersk. Why Maersk? They are 20% of the container shipping market, right? But in all of these cases I got to be very clear, we are not building a solution for Maersk or for Walmart. We're really building something for the industry, because food safety, you want to solve it for the industry. Just by helping Walmart along. >> John: That's why the open source thing is critical here. >> That's right. >> John: And the update on that, it's all open source on which components, or is it all open source? >> Ramesh: So the open source is all about at the platform layer. The solution itself, you know not everything in the solution is going to be open source. But the key point I was trying to make is that you go off the sort of significant anchor tenants in the ecosystem that draws others into the picture, but that's still not enough, you need to make sure there are economic incentives for others to join in. >> John: So to put it together, tie it together, the ecosystem strategy is, take an industry scope and try the rising tides floats all boats kind of approach. So adoption's critical. >> Absolutely correct, absolutely correct, and I think again I can use food safety to make that point. Think about it, right? So there is, let's say, a spinach problem, we had it in 2006. So you find a problem, you trace it back to a source. Let's say Walmart is the store in which somebody bought it and it was traced from there. That's not good enough. From the source it went to many other retailers. So you need to be able to track down and pull all of them off the shelves. Therefore you have to go for an industry solution. >> John: I can imagine the healthcare thing would be even more impactful too, I mean, financial services pretty obvious, transactional stuff there, but healthcare, so many different variations of supply chain and transactions. >> Ramesh: Absolutely, so in a way, the way I think about it is in a financial service everybody had a hunch this could be big, but supply chain, we've come a really long way, I think this is going to be the space which will have the most destruction, and its interesting considering when we started my first conversation with folks, whether it be a Walmart or Maersk, first question is, "what is blockchain?" We've come a long way in the last say eight, nine months. >> John: You guys get so excited where you're kind of pinching yourselves because you can get kind of euphoric about some of the disruption impact. It's just mind blowing to think when you're talking about food, the food industry and healthcare. You got to get tampered down a little bit in some realism, is there that IBM excitement internally share some color internally within IBM the excitement, and then you got to be getting realistic, a lot of the clients rolling it out to kind of got to walk before they can run. >> Ramesh: Yeah, so, the way I would state it is if you had asked me a year ago do you expect to be in the shape we are in today, I would have said no way. I've been shocked at the pace at which this has been moving both from the point of view of the technology itself, maturing of the technology, and in fact when we say blockchain is here now, so that's at the technology layer level, but in terms of use cases, think about it, there are a number of financial services institutions that are talking about production deployments late this year, early next year. In fact, when we did our own IBM Institute for Business Values survey, came back with fully 15% of those who were surveyed, there were like 400-odd banks plus capital market institutions are going to be in production by end of this year. When I heard that in September I still didn't believe it, but I am beginning to believe it now. >> Well it's interesting I think, the cultural shift is that technologists from computer scientists to practitioners that are technologists, they get it. They can see what blockchain does, so I think as people get more and more momentum, that's the fly wheel that you guys are open for and it's happening. >> That's right, in fact I'm also a techie at heart, but in terms of conversation (mumbles) I never talk about technology anymore because the thing is, there are only two concepts in blockchain. It's trusted data across companies, trusted business process. Everything else is detail. >> John: Got it, Ramesh, thanks so much for sharing, great conversation, formerly with IBM research, now Vice-President of Blockchain Solutions at IBM, great to interview, great insight, blockchain revolution is here, check out our interview yesterday with Dom Tapscott yesterday on YouTube, The Blockchain Revolution, his book really kind of lays out some of the big disruptive game changers. This is The Cube, doing our share of blockchain right now, bringing content in blocks and chunks, not yet blockchain enabled. I'm John Furrier, Dave Vellante, be back with more after this short break. (synthesized music)

>> Narrator: Live from Las Vegas, it's the Cube. Covering Interconnect 2017. Brought to you by IBM. >> OK, welcome back everyone. We're here live in Las Vegas. I'm wearing the Blockchain Revolution hat right here. Of course, I'm John Furrier with the Cube, and my co host Dave Vellante, we're excited to have celebrity author, thought leader, futurist and fill in the blank on the title Don Tapscott, who's the author of the Blockchain Revolution. Legend in the industry, thought leader, you and your son a compelling new book, but you've been on the fringe of all the game changing technologies going back with social media, we've been following your work, it's been great. Now we're at the front range of Blockchain, OK? Now it's becoming pretty clear to some of the innovators like IBM and others that it's not about Bitcoin alone, it's about the Blockchain Revolution, the Blockchain itself. Welcome to the Cube and what's going on? What is Blockchain? (laughing) >> Well, it's great to hear, be here. The one thing you didn't mention is I play keyboards in a rock band. So. >> The most interesting man on the Cube right now. >> We used to do a concert every year whether our public demanded it or not, but no, we're a charity event. We've raised a few million dollars for good causes. Anyway. I think, along with my son Alex, we figured this out a couple of years ago that this is the second era of the internet. For the first few decades, we've had the internet of information. And if I send you some information, PDF, PowerPoint, E-mail, even with the website, I keep the original. I'm sending you a copy. That doesn't work so great for assets. Like money, stocks, bonds. Identities, votes. Music, art. Loyalty points. If I send you $100, it's really important I don't still have the money, and I can't send it to you. So this has been called the double spend problem by cryptographers for a long time. And Blockchain solves this problem. We've had the internet of information, now we're getting the internet of value. Where anything of value, from money to votes to music can be exchanged peer to peer. And where we can transact, keep records, and trust each other without powerful intermediaries. Now that doesn't mean intermediaries are going to go away, but they're going to have to embrace this technology or they will be toast. >> I mean, this is clear, you see the distributive computing paradigm, I mean, we're all network guys and by training, you can follow this revolution. But now when you start thinking about trust and value and you talk about digitizing the world. So, if you go to digital transformation, that's the thesis, that we're in this digital transformation, you're digitizing money, you're digitizing transactions. Explain more on the value piece because now if everything's going digital, there now needs to be a new model around how to handle the transactions at scale, and with security problems, hackers. >> Yeah, OK. Well that gets to a couple of really good points. First of all, what is digital? You know, you think, "Well, I tap my card at Starbucks "and bits go through all these networks and different "companies with different computer systems and three "days later a settlement occurs." But that's actually a bunch of messages. It's not money. Money, cash, is a bare instrument. If you have cash in your pocket, you are the bearer of that instrument, which means that you own it. And what we're talking about is something very different here, of creating digital cash. That's stored on a global ledger. So, rather than there being a three day settlement period, there's no settlement period because you're just making a change in the database. And this is a very revolutionary concept. And as for security, I mean, think about, I don't know, you're right, it's not about Bitcoin. But if we took the case of the Bitcoin Blockchain. If I wanted to hack that, I'd have to hack that 10 minute block that has all those transactions, which is linked to the previous block and the previous block, I'd have to hack the entire history of commerce on that Blockchain, not just on one computer, but simultaneously across millions of computers, all using the highest level of cryptography, while the most powerful computing resource in the world, the minors are watching me to make sure I don't mess around. Now, I won't say it's impossible, just like I suppose it's not impossible to take a Chicken McNugget and turn it back into a chicken, but it's really hard to do. A lot, and so these systems are way more secure than our current systems. >> Yes, it fundamentally impossible, and you don't have a third party verification system that's also an exposure area, it's globally distributed, right, so let's go back to what is Blockchain? What's the Blockchain 101? >> Well, Blockchain is a distributed ledger where anything of value, from money to votes, and music can be stored, transacted, managed, in a secure and confidential way, and where trust between parties is established, not by a big intermediary, but by cryptography, by collaboration, and some clever code. >> So, talk about the premise of the book. Sort of why you wrote it and what the fundamental premise is. >> Well, three years ago, three years and five weeks ago, at a father son ski trip, over a large piece of beef, and a very nice bottle of wine, Alex and I started thinking about what all this means. And we decided to work together. And he wrote a very cogent paper about how this new ecosystem could govern itself and my publisher got wind of it and said, "That sounds like a book." So we launched a dozen projects, couple of years ago, on how this technology changes, not just financial services, how it changes the corporation and the deep structure and architecture of the firm. How it changes every industry. How it changes government. Democracy, there's an opportunity to end the crisis of legitimacy of our democratic institutions. But what it means for culture and so on. And then we wrote the book. And it was published in May 10th last year, it's been a big best seller, it's the best selling book on Blockchain. It's actually the only real book on Blockchain. In some countries it was ridiculous. For a while, in Canada, it was competing with Harry Potter and an adult coloring book, as the best selling book in the country. >> That's the state of our culture right there. (laughing) >> What is an adult coloring book, anyway? (laughing) >> That's the million dollar question right there. >> There are a lot of geeky books on Blockchain, but this-- >> Well, actually, there aren't, there are books on crypto currency, on Bitcoin. >> Yeah, absolutely. >> And but the only real book on Blockchain is Blockchain Revolution. >> So, but you're really focusing on the business impact, organizational impact, even societal impact, so explain the premise. >> Well, where do we start? Let's start with the firm. Corporation, foundation of capitalism, based on double entry accounting. That's what enabled capitalism. Well, with Blockchain, you get a third entry onto the ledger, so you have triple entry accounting, so you don't need, say, audits. Every year, because there's an annual audit. That's just the beginning. Because the reason that we have firms, according to the Nobel Prize winning economist Ronald Coase, is that the transaction costs in an open market, like the cost of search, finding all the right people and information, the cost of contracting, for every little activity we're contract prohibitive. The cost of coordination, getting all these people to work together, didn't know each other. The cost of establishing trust, all of that in an open market is prohibitive, so we bring that inside the boundaries of a firm. Well, Blockchain will devastate those transaction costs. So we're talking about a fundamental change in how we orchestrate capability, in our economy, to innovate, to create goods and services. And for that matter, to create public value. So this is not some interesting little technology. This is the second era of the internet. I think it's going to be bigger than the first era was. >> So the internet, I mean, the value creation side. So let's take that additional asset side. So assume everything's digitized, got IOTs out there, industrial IOT, wearables, smart cars, smart cities, smart everything, but now you've got to create value as a firm, so let's roll that forward, we have the now somewhat frictionless transactional environment in an open market, how do firms create value out of those digital assets? >> Well, they'll create value in some ways that are radically different than today. So let me give you an example. Who are the big digital value disrupters today? Well, you can start with the so called sharing economy. You know, Uber, Airbnb, Lyft. >> The Cube. >> Sorry? >> The Cube. (laughing) We're disrupting the world right now. >> Well, you're actually not a sharing economy company in the sense that I think. >> In the traditional sense. >> Actually, I don't think they are, either. I mean, the reason that Uber's successful is precisely because it doesn't share. It's a service aggregator. So, why do you need a $70,000,000,000 corporation to do what Uber does? It could be done by a distributed ledger with some smart contracts and autonomous agents. Everything that the corporation does could be done by software. Airbnb. You know, how about, we'll call it B Airbnb, Blockchain Airbnb. So, you go onto your mobile device, and you're looking for a place, and you're going to be in Vegas, and all the hotels are booked because of IBM, and then you find a place, you book it, and then you show up, you turn your key that starts a smart contract payment to the owner of the apartment or the room, and you check out, you turn your key, it's closed. The software has a payment system built into it. So the renter of the room gets paid. You enter a five star on your device. And that's immutable, and it's a five star rating on a Blockchain. Everything that Airbnb as a company does could actually be done by this software. So, Bob Dylan, there's something going on here and you don't know what it is, I mean, people are all locked in an old paradigm about what's disruption. Get ready for this. >> So what's the impact, I mean, not the impact, what's the inhibitor, so, obviously, any new technology you see all the naysayers, so obviously this is a great vision, what's going to be the impediment? >> Well, they are all kinds of impediments and inhibitors, and there are all kinds of ways that this can get messed up. A big one is that we're overcoming now is that people think, well this is about Bitcoin, well, it's not. The real pony here is the underlying technology of Blockchain, and that's the biggest innovation in computer science in a generation, I think. But also, you know, I wrote this 1992 in Paradigm Shift, I said, when you get a new paradigm, it's a new mental model, and these things cause dislocation and disruption and uncertainty, and they're nearly always received with coolness. I mean, you guys know what it's like to be received with coolness as you introduce a new idea as do I, going back to the '70s. But, and vested interests fight against change. And leaders of old paradigms have great difficulties embracing the new. So you think about a company like Western Union that can charge 10% for remittances that take four to seven days. Well, with new tools, they don't take four to seven days, they take minutes, and they charge, based on Blockchain, they charge a point and a half. So, it's the old-- >> The inhibitors, they got to get their solutions out there so that they could go after and eat some of the lunch of the older guys. >> Well, they have to eat their own lunch, that's-- >> Western Union could be disrupted by a new entrant, right? So you got a new entrant coming in, they got to cannibalize themselves-- >> And at that point, it tips, there are enough disruptive entrants, right? >> So, it's all those inhibitors to change and for the IT people that are at this event, this is an exciting opportunity, but you do need to learn a new kind of knowledge base to function in this distributed ledger environment. You need to learn about hyper ledger, for starters, because that's the real enterprise platform. >> All right, so folks watching, like my son who helps us out sometimes as well, you have a father son relationship, which is super inspirational. He's, say he wants to get involved in Blockchain. He wants to jump right in, he's kind of a hacker type, what does he do? How does he get involved? Obviously read the book, Blockchain Revolution, get the big picture. Is there other things you'd advise? >> Well, buying the book in massive volume is always a good first step, no. Seriously. Well, one thing I always say to people is personal use is a precondition for any kind of comprehension. So just go get yourself a wallet for some crypto currency and download it and you'll learn all about public key encryption and so on. But I think in a company there are a number of things that managers need to do. Need to start doing pilots, sandboxes, developing and understanding use cases, and our new Blockchain research institute is going to be a big help in that. But also, for an IT person, is your son an IT guy or he's more an entrepreneur? >> No, he's 21 years old. >> He's 21. >> He doesn't know anything about IT. >> He's a computer science guy. >> He's born in the cloud. IT, can't spell IT. >> Well. (laughing) >> IT's for old guys like us. (laughing) >> We're telling him what he should do, he should be here telling us what we should do. >> John: That's why we hired him, he's a little guinea pig. >> Digital natives, you know, we're digital immigrants, we had to learn the language. But, for the IT people, it's all about not just experimenting, but about moving towards operational systems and about architecture. Because our architectures are based on traditional computing environments and this is something from Paradigm Shift, you remember, I interviewed Max Hopper who invented the Sabre Reservation System for American Airlines, and he says, "The big problem, Don, "is that if I don't have a target architecture, "every time I spend a dollar, I'm building up my legacy "and making it worse by investing in IT." And so that's where I came up with this formulation, yeah, God may have created the world in six days, but he didn't have an installed base to start with. (laughing) So, what we need to do is to start to think about architectures that embrace Blockchain. And this is an historic new opportunity for anybody who cares about IT. >> Is the disruptive enabler for Blockchain the fact that we're now fully connected as a society, or is it something else that we don't see? What's your view on, what's the real wealth creating disruptive enabler? >> Well, you can sense that the rate of change is a lot faster for the second generation than the first. 1993, '94, when I wrote the Digital Economy, it was dial-up. Ebay. >> 14 four. >> Amazon didn't exist. >> Actually 98 I think it was. >> When I wrote that book. Google was five years away. Facebook was 10 years away, so but now we've got wireless, we've got IP everywhere. We've got mobility. We've got the cloud, we've got all the preconditions for this new innovation to happen a lot faster. And that's why, I mean, a year ago, there wasn't a lot of talk at this event about Blockchain. Today it's the big buzz. >> I wonder if you could talk about other applications. You talk about hyper ledger, it's a great place for a starting point, especially for IBM, but one of the areas I'm excited about is security. You know, like the MIT Enigma Project, and there are others, you know, security is such a problem. Every year we look back, John and I, we say, do we feel more secure? And no, we feel less secure. What about the application of Blockchain in security use cases? >> Well, Blockchains are more secure in a number of ways. One is they're harder to hack than traditional servers. And people say, "No, our company, we're bulletproof." Right, tell that to JP Morgan and Home Depot-- >> Target fidelity-- >> The Democratic National Convention, but also tell it to the CIA. I mean, if the CIA can be hacked, then any of these traditional server technologies can be hacked. So that, alone, is a huge case to move towards hyper ledger and these other type platforms. But you said, "I feel less secure these days." And that's a really interesting statement. Because I think that, in many ways, the security of the person has been undermined by the internet of information, as well. That, first of all, we don't own the data that we create. That's a crazy situation. We all create this massive new asset. It's a new asset class. Probably more important than industrial plant, in the industrial age. Maybe more important than land in the agrarian age. We create it, but these data frackers, you know, like-- >> Facebook. >> --Facebook. Own it and that's a big problem. The virtual you is not owned by you. So we need to get our identity back and to manage it responsibly, and people who say to me, "Well, Don, privacy's dead, get over it." This is foolishness. Privacy is the foundation of freedom. And all these things are happening in our world today that undermine our basic security. Our identity's being taken away from us. Or the fact that things happen in this digital world that we don't know, what are the underlying algorithms? If I take this, and I drop it, that's called gravity. I know what's going to happen. But if I go onto Facebook and I do certain things, I have no idea what are the algorithms that's determining what's happening with that and how the data is used. So-- >> Hello fake news. That's how fake news came about. >> Well, yeah, totally. >> People don't know what to trust and it's like, wait a minute. >> Exactly, and well, this has led, also, to a total fragmentation of public discourse, where we've all ended up in these little self reinforcing echo chambers where the purpose of information is not to inform us, it's to, I don't know, give us comfort. >> Divide people. >> Yeah. So, I'm not saying that Blockchains can fix everything, in fact, they can't fix anything, it's humans that fix things. But the key point that Alex and I make in the book is that once again the technology genie has escaped from the bottle, and it was summoned by this person that we don't even know who they are. At a very uncertain time in history. But it's giving us another kick at the can. To sort of fix these problems. To make a world where trust is embedded in everything and where things are trustworthy, and where people are trustworthy, and maybe we can rewrite the whole economic power grid and the old order of things for the better. And that's really important. >> My final question for you, and this is kind of a thought provoking question. Every major revolution, you see, big one, you've seen a counter culture, '60s, computer revolution, PC revolution, are we on the edge now of a new counter culture developing? Because the things you're kind of teasing out is this new generation, is it the '60s version of tech hippies or is there going to be a, because you're getting at radical reconfiguration, radical value creation, this is good evolution, and fast. So you can almost see the young generation, like my son, you're talking about, teaching us how to do it, that's a counter culture. Do you see that happening? >> Well, first of all, I see this change in culture profoundly, so artists can get fairly compensated for the work they create. Imogen Heap puts her song on a Blockchain platform, and the song's inside a smart contract that specifies the IP rights. And you want to listen to it, maybe it's free, you want to put it in your movie, it costs more. The way she describes it is the song acts as a business, and it has a bank account. So, we can profoundly change many aspects of culture, bringing more justice to our culture. But I'm not sure there'll be a counter culture in the traditional sense because you've got people embracing Blockchain that want to fix a bunch of problems, but also people who want to make large organizations more competitive and more effective. The smart banks are embracing this because they know they can cut their transaction costs in half, probably. And they know that if they don't do it, somebody else will. >> And IBM's embracing it because they write software and they service all those firms with technology. >> Well, IBM, the case of IBM is really interesting, and I'll end on that one. That if you think about it, and I go back, I mean, there were only main frames when I started, and IBM was the leader of the bunch, right? And then all the bunch died, but IBM somehow reinvented itself and it got into mini computers and then we saw the rise of the PC and IBM invented the IBM PC, and then we got into the internet, and once again, all these companies died off but somehow IBM was able to find within itself the leadership to transform itself. And I'm, I won't say I'm shocked, but I have to tell you, I'm really delighted that IBM has figured this one out and is driving hard to be a leader of this next generation of the internet. >> And they're driving open source, too, to give IBM a plug, Don Tapscott, great to have you on the Cube. Good luck with your speech today. A legend in the industry, great thinker, futurist. Amazing work. Blockchain is the next revolution, it will impact, it's an opportunity for entrepreneurs, this is a disruptive enabler, you can literally take down incumbent businesses. Changing the nature of the firm, radical economical change. Thanks so much for sharing the insight. >> Nice hat, too. >> I got a nice hat. I got a free bowl of soup with this hat, as they say-- >> Don: It's all about the Blockchain, baby. >> It's all about the Blockchain. >> It's all about the Blockchain. >> More Blockchain Cube analysis as we disrupt you with more coverage, I'm John Furrier, Dave Velante, stay with us. (musical sting)