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Eliminating the trust factor

Henk van Cann

Henk van Cann is co-founder of Blockchain Workspace, an organisation based in Amsterdam, the Netherlands that provides training on the blockchain to make the technology understandable to a broad audience. Henk spoke to ICT Update about the need to educate people in the use of the blockchain before they start using it and judging it, and why trust is one of the key drivers for moving away from centralised systems and towards blockchain technology.

How did you become interested in the blockchain?

I co-founded Blockchain Workspace, and also Blockchainbird, because at the time most of what me and my partner were hearing at meetings and conferences about the blockchain was technical. You could see in the eyes of the people visiting these meetings that they didn’t really understand why this had all been created and how it was developing. We started looking for ways of making it easier to explain to people, often by way of analogy.

We also run a few blockchain labs in Leiden and Amsterdam. What we try to do there is teach each other how to use these analogies. For example, we like to use the analogy of the first mass-produced car, the T-Ford. Though no one drives one anymore, it had an undeniable impact on transport. Before the T-Ford, people moved around by horse. The bitcoin is like the T-Ford, the new innovation on the block, while the Fiat currencies are the horse.

So educating people is a priority. What about all of the people that have jumped onto the bitcoin bandwagon recently?

We always say, ‘don’t buy anything you don’t understand.’ But people like to speculate and they will lose money. Especially the initial coin offerings (ICOs). I’m concerned about the ICOs. They tend to present themselves in a low-profile manner, but what it ultimately comes down to, in meetings or conferences, is ‘buy my ICO’. That’s a shame, because there’s a big difference between looking for the blockchain’s real added value, say in the agricultural sector, and doing an ICO. Because in the 98% of the cases, the ICO is worthless.

How is blockchain technology developing in Europe?

I don’t travel enough to other parts of the world to be able to make a strict comparison, but my gut feeling tells me we’re doing well with the blockchain. Of course we’re using it from a privileged position: we have bank accounts, we have passports. So we will use it differently than someone in Tanzania, for example, or in Venezuela. But when it gets to them they will be better at using it than us, and probably quicker too. And it will get to them, in fact it’s already happening. Because as soon as somebody has a mobile phone or access to a mobile phone, even if it’s just a single mobile phone for an entire village, people can create virtual identities with it. That’s where it all starts. As soon as you have a virtual digital identity then you can start to use the first blockchain applications. So to answer your question, Europe may be slightly ahead of certain parts of the world, certainly in the attention we’re giving the blockchain, but I wouldn’t dare to say we’re ahead in terms of evolution. You can’t say where we’ll be in two years.

What needs to be done to get farmers and small agribusinesses in a country such as Tanzania to fully realise the merits of blockchain technology?

We quite simply need to start by giving farmers access to a digital keychain. A keychain would give them access to an account in which they can receive cryptocurrencies. Why? Because it gives them a chance to play with it. They’ll probably learn faster than we think. Or if they don’t, their children will. Because that’s what we’re seeing in Europe as well. People over the age of 30 aren’t necessarily so keen to get into the blockchain, but the youngsters are. From 16 years onward, people are spending huge amounts of time and money on cryptocurrencies. And they won’t go back to centralisation anymore. They already feel the vibes of decentralisation, so for farmers in rural areas in Africa, for example, to pick up on this they need to have a mobile phone.

A smartphone?

Yes, a smartphone. And they need to have an energy supply, solar energy for example, to charge the phones but also to have an internet connection. You don’t need an internet connection all the time. You can tend to your herd or crop and make a transaction on your phone – to wherever in the world, it doesn’t matter – and once you get back to your internet connection the transaction will be broadcast. Some people think we need an internet connection everywhere in developing countries but that’s not true.

Is the slow speed of bitcoin transactions a stumbling block?

To answer that, let me revert to the bitcoin/T-Ford analogy again. The T-Ford paved the way for other newcomers, cars that have very smart ways of doing quick, cheap transactions. In other words, there are quicker cryptocurrencies, and the Lightning Network on top of the bitcoin is meant to address this problem as well.

Is it just a matter of speed? I’m thinking of something like m-pesa, which is quick of course. Is the difference the transaction fee?

No, the difference is centralisation. M-pesa is a company and they have centralised services. The key question you need to ask yourself is: where is there a wish to eliminate the trust factor? If we trust m-pesa as a company and can trust that company for the coming decades, why would we use the blockchain? Why use the bitcoin? There’s no need to. But if you want to eliminate trust, then you can use the blockchain and the currency on top of it.

So always ask: who don’t you trust?

Let me give you another analogy to make it more tangible. If there’s a fire extinguisher somewhere in this room, chances are it has been audited and checked. There’s an auditor, who comes by once a year to do a check, take a picture and put it in his database. And as long as it’s there, you can ask them to provide that information from that audit. But as soon as there are serious problems – the building burns down to the ground, for example – where do all of these people end up? Usually in court. At that point, people may have a reason to be less open about their data.

So there’s potentially a point in time where we lose trust. And perhaps we have good reason to lose trust because depending on the situation there may be a lot of money involved or culpability. Now suppose we would have had a blockchain beforehand, then we could have eliminated trust. It’s a very easy task. You demand that the auditor take his data at some point in time – after an audit, for example – and make a proof of this data, which you put on the blockchain. You can do that: put any amount of digital data there and make a fingerprint of that data on the blockchain.

To use another analogy: a couple of centuries ago, people would write a letter, put it in an envelope and then seal the envelope with wax. And that sealed letter would eventually be put somewhere safe, and that’s the blockchain. In the future they might need that letter again. Once opened you could see who signed the letter. That’s the only true application of the blockchain. Nothing else. You can’t feed your dog with it.

How important is it for people to know how the technology works?

That’s a good question. I would say they need to understand the basics. The technology offers great freedom but with this freedom comes great responsibility – so you have to do your estate planning. And that means key management. It means that you have to have decent copies, on decent mediums, in decent locations. There’s a three-to-one rule for that: three copies, at least two mediums, at least one other geographic location. That’s what you do with the keys. There’s a complex world behind blockchain technology, and while we don’t need to know every detail about the inner workings of the machine, it would be handy – to use the car analogy again – if we could recognise the fuel tank, the carburettor and the electrical engine. To know that the engine didn’t start because there’s no spark, so to speak.

Copyright © 2016, CTA. Technical Centre for Rural and Agricultural Cooperation

CTA is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.