The following are the outputs of the real-time captioning taken during the Twelfth Annual Meeting of the Internet Governance Forum (IGF) in Geneva, Switzerland, from 17 to 21 December 2017. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record.
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>> MODERATOR: Good afternoon, ladies and gentlemen. Do you hear me? OK. I suggest we will start, because time is quite limited.
Well, I'd like to welcome you on our session. The title of the session is "Digital Currency and Blockchain Technology." In different nations.
I will start with the introduction of myself. My name is Yuri Grin, I'm Deputy Director General of a Russian company dealing with mobile payment and services in these fields.
But here I was invited by my colleague from Armenia, China. Like vice chairman of ITU focus group on digital currency.
I will tell a few words later after this.
So here's how we'll organize our session. We have 90 minutes.
And we did discuss with colleagues on the podium that we will divide it in a few parts in order to make it not like a presentation. And you will fall asleep.
We will have in the beginning two short introductions on the subject. What we are going to discuss here. From Patric and from Olutoyin.
And then each panelist will make short introduction herself or him. But not just introduction of the person, but what they are doing in own country. What is development. Something on subject.
Then we will have a short time for question and answers. So for you to warm up a bit, our speakers.
And then after that, there will be second part, which will be discussion how national IGF chapters can cooperate in this area.
After these discussions there will also be another session for question and answers. Then we will have rapporteur who is here, who will make a short summary of his draft report. And then there will be most interesting part. After conclusion, I will give the floor to the grand jury, who will announce three winners.
So three best questions will be granted by some Bitcoins or other cryptocurrency, which will be discussed today. So you're most encouraged to participate in this.
It will not be me. There is a secret jury. I will not announce you who it is, but in the end you will get hopefully, this donation. It's not my donation. I don't have any Bitcoins or whatever.
(Laughter)
But some people here, they have them and they're ready to share.
>> Don't look at me!
(Laughter)
>> YURI GRIN: OK. So if you are OK with this, any proposal, any suggestion? So we can start. And we will start with two brief oral presentations, maybe with some PowerPoint.
So what we are going to discuss in fact, today. And we selected two people who have slightly different vision. It was done intentionally for you to think about and see that the issue is quite complex.
But before this, before I forget, I was asked to say a few words regarding what is this ITU focus group on digital currency.
Because later I will be mutual moderator.
Probably some of you know that ITU is another organization just across, which is the oldest one. It's already 150 years.
Old as postal union, by the way. It's strange, but it's true.
So ITU this year created very interesting format of focus group on digital currency. It's a group which was created for two years period. This is for any individual. Doesn't matter, from private sector, government, from Civil Society. If you have something in mind, you can join. Who will be interested, I will tell you after the session how to do it.
Because you have to dig on the website, but it's possible to register. So the idea is, it's not about all currency, but it's already about digital currencies. So those currencies which will be issued by central banks basically. And which will replace Fiat money. So money which we already have in our pockets, in our bank account.
The first meeting of this group was recently in Beijing, and I was personally very much impressed how chain seriously considers this business.
Original idea came to ITU from one U.S. company, but I was really impressed.
So it will be very interesting to hear your presentation, Patric, later on. Even if not on this subject, but the chain is very much in this business.
Another group which might be interesting for you in ITU, there is another focus group with the name DOT. Distributed ledger technology. So basically blockchain is one of these technologies. So the same rules. You can register, you can apply. And it's welcome. For engineers, for economists, sociologists, whoever.
You already have this experience of last year when by initiative, on Bill Gates Foundation and World Bank, there was focus group on digital financial services. It was quite successful.
And for me, this initiative or ITU, it's a great step forward. When you're in an organization, which some people consider like very formal one, and beautiful buildings. Open for participation. Open for any voices. And provide kind of forum where people can sit together and create a common vision from different angles on such issues, like blockchain, digital Fiat currency or some other issues.
With this, I will finish my introduction about ITU focus groups.
Introduce yourself, please.
>> Welcome, everyone. My name is Walid Al-Saqaf, here as someone involved in blockchain technology for several years. I serve on the board of International Society Blockchain special interest group, and I've been doing some development in the networks through smart contracts on solidities. So I have some development background as well. Here I would like to introduce to you the topic. Many of you are interested to understand, perhaps for the first time, what blockchain is and how it relates to cryptocurrency.
So first, to understand blockchain how it emerged. We need to understand why it emerged. Because of a desire to release yourself from central authorities.
The total opposite of what we have today. Central banks, controlling money. Controlling how they flow, how they're regulated.
Cryptocurrency emerged through Bitcoin in 2009, basically in reaction to the 2008 collapse, financial collapse.
Where the central banks have regulated in many ways, negatively, how money flows. So it led to the frustration.
Someone or some people or some group with the name of Satoshi Nakamoto, still unknown whether it's real or not, that developed the protocol that developed Bitcoin as the peer to peer network to exchange money.
The idea then evolved into the infrastructure that helped him or them, develop this.
And the architecture is called blockchain, because it relied on developing a series of blocks that are connected to each other, cryptographically in a way that prevents any form of counterfeit or defrauding the system.
It was built on math. So if you believe in math, then you understand it will be a stable system. Over time this grew and became quite popular. As of today, Bitcoin is worth almost 19,000 U.S. dollars. And the whole market cap of cryptocurrency has achieved a remarkable growth of up to $600 billion U.S. dollars. And the position of many of those who have been against Bitcoins has changed, simply because they understood it wasn't purely built on belief, but on math and built on pure hard science and how you actually ensure that consensus on what is being paid and to whom, can be built into a system in a way that no one can tamper with.
So that's very briefly what it is. One can go very deep into how mining goes, how hashing takes place, et cetera.
But this would require a longer workshop. If you want, I did a workshop at EuroDIG and we used candy, and Irvin was with us. And to illustrate how possible it is in fact to exchange goods, including candy, in a way similar to the way you would exchange money.
The idea came about that blockchains can have you exchange anything of value. Any single thing that you can imagine from data to shipments to medicine to food. All sorts of things that you can have value on, can be exchanged through the blockchain technology.
And that would lead to an era, utopian era, where there would be no government that's able to control what flows. And that might be a concern.
And that's where we come into the debate on how repercussions of having a utopian Satoshi vision of a global economy, where no one is in control and single, individuals, peers, are the ones who are controlling this.
Additionally of course, there will be many benefits that governments can use from the blockchain, because who would not want a system that is immune of fraud? Who would not want a way to protect data, to secure data so that no one tampers with that. And how would that play out in the use of ledger technology in general.
Because blockchain is one form of distributed ledgers, but that would actually help the science of ledger technology and how it could improve security and stability.
There are several question marks around blockchains. So far among them would be scalability, particularly for the Bitcoin network. Because it uses mining that is quite resource hungry and takes longer to process transactions. But there are various solutions including the lightning network that would enable having a number of microtransactions done off-chain through a secure mechanism that would still maintain the characteristics of the ability to keep transactions intact.
So these are all interesting, exciting times. We're at a stage in history where math, science, computers, geeks, are beginning to reshape reality around us.
If you are still not aware of how this would change, then look at the numbers and see the growth. Some say it's a bubble, but I personally believe if you can back it up with some science and math, I wouldn't see it as a bubble. Perhaps it's an invention that could help humanity progress forward, but we have our own suspicions and concerns around it.
With that, I would not say I don't want to hold a strong pro or anti position about this, although it's clear. But the idea is that this can be a fruitful way going forward to understanding how we could leverage it or how we could manage the weaknesses and pitfalls that would emerge.
And finally, just to make clear, there is a distinction between what a distributed ledger technology is and one form of it is blockchain. There are various other forms. For example, there are hash graphs. There's the iota protocol that uses a different form. It's not a blockchain, but they're all distributed. Then there's Bitcoin itself as one type of cryptocurrency. It's the first, but it's just one type of cryptocurrencies. Then there are other cryptocurrencies. I think the statistics as of now say we have over 7,000-plus cryptocurrencies on the market.
And they're growing by leaps and bounds. Many of them are what we call tokens. Though cryptocurrencies are still built on a common framework, such as Ethereum, which is a framework that allows you to build tokens over.
So this is getting too technical for now. I would say this is the overall vision of what we're trying to discuss. And I'll leave Arvin to fill in the gaps or bring a different perspective. Thank you.
>> YURI GRIN: Patric. The floor is yours, please.
>> PATRIC DAI: Thank you very much for the introduction. And it's a great understanding of the blockchain.
I'm very happy to come here today. My name is Patric. Basically, I'm an entrepreneur in the industry. So I started my own project.
It's a nonprofit project. The block chain protocol. The name is quantum.
So it's going to be a little technical, but I think it's a very good way to understand why blockchain is so important to our society right now.
Back to 2012, I was still a student in my university. At the time, the first day, I know that Bitcoin is very exciting. I realized something is happening. Because earlier, how do we cherish the value, which value we think is the money. It's totally different on a parallel digital world now than in the blockchain world.
Right now, this is happening, and people are moving from the real world to a parallel financial world. Then a financial world, rebuild all the financial structure. And also it's another owning the payment, the money, it's also about to build the second generation of the Internet.
IT is working a lot on the telecommunication industry and working on the Internet of governance. But the blockchain is creating something new, and we never seen before in the history.
So that's really open question for other people that are sitting here today.
Basically, my understanding of blockchain is it's not only a technical innovation, it's also a society change.
It's also a new trend of our society. Like how do we think of what's the value. And it's also change our rewards structure over the whole society. That's really powerful and really disruptive. Why so many people are so crazy about digital asset? Because they have their control. Because earlier if we are working for a big company, or even for Google or Apple, you get a fixed salary.
But if we are working for the Bitcoin network as miners your salary depends not on your boss, but the network effects. How you company built into the network.
Bitcoin is amazing because there is no company behind the Bitcoin network, but the network itself is worth more than -- I don't know the number today -- but it's maybe $100 billion. More than that.
So that's something really disruptive. I mean technically, Bitcoin Satoshi Nakamoto, he changed the paper currency to digital currency. That's a change from 0 to 1.
We're not riding a horse anymore, everyone is in the car now. That is his contribution to the whole industry.
After this change, when we are talking about a blockchain, we're talking about two things. One thing is a cryptocurrency, another thing is a plant form.
>> Cryptocurrency is about a currency, but currency is never about technology itself. Basically we have no difference between paper money and paper R and B. It's just paper supported by the economy.
When we're talking about a currency, it's not about the tech -- it's about your economy model.
Another thing I think people ignore in this industry is when we are talking about a planned form 34678 when we talk about that, we're talking about the trust planned form. That's the most thing for blockchain, because blockchain create a new infrastructure for our Internet. People can trust less transactions. You do not need to trust anyone, and you can grow your business and blockchain with no transaction fee. And you do not need any escrow service.
Basically all the banking system, all the financial system, no matter, insurance, whether bank or any other big company. What do they want to do? It's like they are the middle man in the society. They are the escrow for you.
Like you give your money to the bank, and the bank, the rules is, the escrow service. So the blockchain is gonna be the biggest escrow service provider in the world. An escrow is a trust. The trust is the money.
You can imagine the future of how big the blockchain going to change the world. Personally, I believe in the future, we will see a new parallel digital world that's like a mapping to the real world. And everyone, will hold some digital asset in the future.
So that's the future we can see. And that's today why we have the market cap with more than half a trillion dollars right now. Personally, I believe maybe go to $2 trillion or $8 trillion in the future. Thank you.
>> YURI GRIN: Thank you Patric. Thank you very much to presenters. With this we can start some presentation from the different regions. We have notable speakers.
I hope while you be doing your presentation, you will concentrate as it was announced in the session on your experience with blockchain technology in your countries or your regions, on highlighting some potential and also some challenges.
And we will start in according to the list. The first speaker will be Arvin. Please go ahead.
>> ARVIN KEMBERI: Thank you, Chair. Thank you all. Thank you for joining this interesting session on blockchain. And we heard in this introductory notes that the blockchain is a new revolutionary technology. Never seen, et cetera.
We'll talk a bit about that a bit later. But first I would like just to introduce properly myself. I'm Arvin from the Geneva Internet platform, the platform foundation. And we actually ran digital watch observatory, which follows the regulatory issues around the world on virtual and cryptocurrencies.
First of all, this area, this issue of mining virtual currency was recognized even from 2008, let's say. Or even earlier. As an issue of Internet governance.
So let's just get a bit back to that. And peer to peer electronic money or peer to peer electronic exchange is not a new idea.
Actually first protocol on the Internet. And earliest Internet was based on idea that people can exchange everything, any kind of material. Just by yourself, in peers, in one network which can be global.
We had that. Interest started developing, and at some point we had a problem in scaling. Similar as we do have in cryptocurrencies now.
So what was introduced, Internet Governance Forum or Internet governance process which helped in governing the centralized thing the Internet is.
As I said, cryptocurrency is one of the first protocols. But just one important distinction when we talk about blockchains is there are two types of blockchains.
An open blockchain and a closed blockchain. So if we compare them to the Internet, we will say an open Internet and a closed Internet run by companies. What does this actually mean? On open Internet or in an open blockchain, anyone can contribute. It's built on an open-source software.
Anyone can contribute, anyone can exchange value or tokens or whatever. But on a centralized blockchain, they are basically distributed ledgers, but handled differently.
What this means. It means that if you're going to use a blockchain as a data center or as a way, how to store your data, really, this, I don't think is so revolutionary.
One thing is that we already have really great databases over the Internet, and as we heard, verification of blockchains is energy-demanding, it's consumption of energy and technology, et cetera.
So as a data ledger, if it's centralized, really blockchain doesn't help. But in this other case, which is open blockchains on open platforms, that everyone can contribute, this is something completely different.
So one of the things mentioned, of course is new wave of organization. Assets issued on a blockchain or coins issued on a blockchain using smart context technology introduced by Ethereum. One of the networks in cryptocurrency.
So this organization took over the main idea of open blockchains who would be, as I said, something like similar to open Internet.
Open to everyone, accessible to everyone, et cetera.
So all this paradigm shifted towards the future in which we can have a token in everything, in every endeavor, we can have a small piece of it through a token.
So if comparing to Internet again, of course, this would be similar as an early Internet in '90s where people thought that .com would be a really great thing and invested many and much in this.
And as we know, dot coms are not so interesting now, and you can rent a domain for only a few bucks.
But again, domains who are available there are available now again such as on Amazon or something like that.
I would say that Bitcoin and blockchain at all, and blockchain technology is actually many developments of the Internet, and it's now in the early phase of Internet. Let's say '90s.
OK. That's it. Thanks.
>> YURI GRIN: Thank you, Arvin. Very interesting, I believe. I really ask him to stop because we still have four speakers. And then maybe you can add something in the end. But just minute before we will start discussion.
So our next speaker is on my right side, which is Nathalia. Introduce yourself and a few words what you're doing.
>> NATHALIA SAUTCHUK PATRICIO: Good afternoon. May name is Nathalia Sautchuk Patricio, technical adviser to Brazil committee.
IGR is sponsor of Brazil IGF and it had its seventh edition this year. It was the first time in the forum about the (?) of the IGF. And the community proposed and organized workshops with several different subjects.
One of the biggest hot topics was blockchain technology there.
There are two sessions. I will try to bring some sites about the Brazilian perspective before our debate today.
Cryptocurrency itself, it was not subject to our discussion in Brazil IGF; however last November of this year, the Brazilian central bank published a bulletin about cryptocurrency. And the risks of financial transactions using this type of currency.
And last October, the Securities and Exchange Commission for Brazil made it publicly about the initial coin offering, ICO, in which it declared the virtual currency exchanges in their platforms are not allowed in the country.
Despite of all the common speculation in the Brazilian government misunderstanding about the virtual currency said, I personally believe that the cryptocurrency has come to state.
But from my point of view, cryptocurrency will not overcome the traditional banking system. I think that the closest thing will be complementary, and the bank system, you will be inconsistent, by adopting cryptocurrency as a means of exchange.
But in our discussions in Brazil IGF, our discussions are more focused. All their issues, all their uses of blockchain like government transparency, smart (?) and social (?)
It was the first time that this topic appeared in our forum. Brazilian people know about this thing of Bitcoin, but currently it's not aware of the technology behind it.
There is a lack of knowledge about use, operation in the beginning of sessions, speakers had to explain what it is, how it works for providing whole context. As we see in our session too.
Because every time is the same.
In Brazil, one of the good examples of blockchain use is initiative ITS Rio. This mobile phone app allows user to propose (?) and collect for them.
The Brazilian development bank is studying possibilities of adopting blockchain as a way to give transparency to its actions, to implement smart contracts for more money transfers.
The first study case will be the Amazon Fund. I believe that blockchain technology will bring more transparency and accountability for governmental actions and other institutions. And this will change the way of doing politics, democracy and popular participation.
That's my point of view of this moment. And I finish for now.
>> YURI GRIN: Thank you very much, Nathalia. So our next speaker is gentleman with a difficult name for me. It's Olutoyin -- he is not here. He is not here. OK.
Online? Not yet. OK, maybe later on. So Satish Babu.
>> SATISH BABU: Thank you very much. I'm Satish, I come from India, but I'm part of ICAN. I'm a programmer, been a programmer for about 30 years. Got into blockchain, Bitcoin in 2013, March. After sitting on it for several months, because it was very difficult to buy Bitcoin sitting in India, because there was no public way to transfer the money.
But in March I managed to buy some Bitcoins. December 2013 was the first rally of Bitcoin, it crossed $1,000. I feel very happy I sold a lot of them.
(Laughter)
I regret now. But I made a lot of money at that point. I got kind of hooked to Bitcoin and said this is something very interesting. And started kind of getting into studying of the technology rather than investing in the coin part of it. The coin part was useful for transactions.
Some of the issues that has negatively impacted the Bitcoin's image in the public mind. Such as ransomware and dotware and so on. What was more attractive was the fact that blockchain technology, open permissioned and non-permissions which is kind of open blockchain.
To understand Bitcoin one has to look at the times. The early 2005, 2006, 2007, 2008, 2009. The global financial meltdown or the frustration in the system.
And a unique subculture of the Internet. The cyberpunk movement. ITF model's says, we believe in (?) running code. As a programmer this appeals to me very much.
But voting is something very significant. They're taking a position that the government is not necessary for us. The government is actually the trusted -- what shall I say, the intermediary in many things including Fiat currency.
But here is a movement we don't want the government. So naturally they were thinking of how we can go beyond the government and establish our own currency. Become own currency. That is one of the motivations behind the way Bitcoin came up.
And this is a revolution of trust. It is not really money. The money aspect is very minor compared to the potential of the trust TRANS submission. And the movement of intermediary to do our transactions.
Bitcoin, all coins. All kinds of technology, proof of authority, proof of elapsed time. I'm currently working on several community aspects of the blockchain mostly.
On Ethereum as well as Hyperledger, which is a permissioned blockchain. Unusual. It's from IBM, currently run by Lennox labs and I'm an open source person. It is open-source software, though it is not a public blockchain.
Then there are also f lack of time, I'll quickly run through this.
New in China, making a lot of waves. What can we do? General public, all of us, with blockchain right now?
One thing we can do is suppose I want to establish for posterity, forever, my right of authorship of this paper.
Now if I have a computer and he gets to publish his paper first, he'll get the credit. But if I want to establish I did this today, if it is a paper document I'll get it notarized. But today there are many services some free, that upload the document and get the hash of the document, get it placed on the blockchain.
On a Bitcoin, Ethereum, whichever blockchain you want. What that does is, this document, the hash is a kind of little fingerprint of the document. On the blockchain, I can forever, I can prove that this is. There are also things like traceability, identity for Internet displaced people, children, grand transfer. Lots of things which are being kind of talked about.
I'll mention two issues that came up recently. One is the first time the word Bitcoin impacted was when the WannaCry ransomware came up. All the payment was to be made to an address.
So people had got a very negative thing that this is owned by criminals. In order to kind of extract money.
Second is the whole dark web. I'm a heavy user of TOR, I use it daily. But there are penal who believe it is only for illegal stuff and the dark net marketplaces where we transact using the Bitcoin.
So many governments -- I did not touch on government of India. On the 17th, the government of India sent out income tax notices to half a million people who had Bitcoins.
So otherwise there's no ban or anything. But they want to extract tax presumably. Some of these things have impacted negatively.
The perception that not fully -- also the whole concept of a bubble. This is seen as a bubble, and maybe it is a bubble. Maybe it will come down to motivational levels of association. So I'll stop at this point and maybe take questions later. Thank you very much.
>> YURI GRIN: Thank you, Satish. So we have last speaker in this first up round. Tian Luo.
>> TIAN LUO: Thank you, chair. Hi, everyone. You can call me Lorrie. I'm the secretary from IGF China and my experience with blockchain technology is traced back to my working experience with BTC China. I'm actually working sometime in this industry.
The most interesting thing to me is I found blockchain technologies quite amazing, because it totally changed the structure of the Internet. Before, we are in the Internet of information. But after the blockchain, after the Bitcoin, we can really transfer the value in the Internet.
And also net people to communicate, peer to peer. So that's why I think the technology is the vital point, but also the governance is very important. That's why we initiated this topic. Under the IGF.
We also want to see if there's collaboration amount on national and regional in this of IGF. Because we saw the IGF as holder for style and also bottom app.
And it's very much like the blockchain system, which we gave the power back to the individual. And we collaborate among individual people.
Before we may see this is difficult to achieve, but after this technology, we see there's (?) and the collaboration will happen. Thank you.
>> YURI GRIN: Thank you, Lori. Before we start session of question and answers, just maybe one minute to first speakers. It's OK?
>> I actually like. There was a reference to the early Internet. So indeed, there are some characteristics similar to what the Internet went through.
At the beginning, people said the Internet will not succeed. It cannot really replace, was it telephones. There was obviously a group of naysayers or skeptics around the technology. I don't think it's because they didn't want it to succeed, but because they didn't understand the technology behind it, how it works.
They really thought of it in the same legacy ways in which they thought about everything else. That leads to underestimating the potential of any new technology. When I hear that cryptocurrencies will not replace fiat currencies, I begin to reflect -- maybe this is a deja vu moment -- we are still not seeing the real picture and why they are different.
The idea behind cryptocurrency technology is not fundamentally different than having people just exchange goods on the street. There is no intermediary between people.
So there is no one person between the one individual who is trying to give a way, let's say a coin of gold, in exchange for another few coins of silver, for example.
There is direct interaction. So this has been lost over the years, given that governments were the ones who issued these bonds that would be then taken and used instead.
So I wouldn't see it as something fundamentally new into human nature. Humans would like to remove intermediaries as much as possible and interact in a more open and direct way. The only difference here is scale.
Instead of in the past where you had the ability to interact with people in your community, exchange goods, now you can do the same across the world, almost instantly.
That has implications, and I feel there would be some sort of concern by governments, since they would not be able to monitor, for example, fraudulent transactions, drug trafficking, all sorts of negative things.
But that actually happens on the Internet anyway. If you have a car, for example that had been used in a suicide attack, that doesn't mean that you should always ban cars.
It's impossible for you to think in that logic. What can be done is look into how you can improve the technology and look into ways to help it out. But to ban the cryptocurrency because of some characteristic or some abuse of it such as -- an institute would think banning it would be a concern. But guess what happened afterwards? It became more valuable. So the more you oppose something so natural, the sense of decentralization, the more it becomes valuable to the minds of people. I wouldn't say valuable in terms of physical value. But what you put in value of cryptocurrency is what people believe is valuable.
For example, if there's a demand in supply theory here, then the more people demand a particular cryptocurrency and feel more, let's say, confident in it, then the higher it will go in price.
So it's market dynamics.
>> YURI GRIN: Thank you. Patric, you would like to add something? One minute.
>> PATRIC DAI: One minute. OK. Thank you.
So I wanted to tell a very short story about what we are doing. And you can see through our story, you can see how the industry grow.
Back to 2012, I was doing the Bitcoin mining. At the time in China. West of China, in the mountains, you run to the mining farm and you feel you are printing the mining for the world. That's a real feeling.
You're the only central banker, you have the right to mine the money. But as an individual, a student, at the time I was still university student and I went to a mining farm and put on some mining machine. The mining machine are printing Bitcoin.
Yeah. So that's something make you feel like you get the power, only the big guy, they had earlier. The power is distributed to the people right now.
And then I realized the Bitcoin price going up in 2013, and it's a small crash until 2015. At that time I realized OK, the mining a limited industry, because it's like ICT depends on the price of Bitcoin and you can't decide how much you can put into the industry. Otherwise you cannot cover the cost of electricity.
Then I realized, OK, I should build something more general purpose for the society. Like it's a platform people can build their own applications on blockchain.
And we had the idea in 2015, and we released the white paper in 2016, and the whole world is crazy. Why I say this? Because when we release white paper, we raise money from the world. More than 20 countries. Get about $15 million to support the initial idea. Today the whole project is more than $5 billion.
So that's something that's happening.
What I can feel is like OK, one thing is a technical innovation, another thing I can feel, it's really like the people are moving to the digital currency world. The people are moving to the new industry. You can feel all the big guy, all the newcomers, they are just on their way to moving to the industry right now. That's something change.
That's something, it's a new trend of the world change. That's changed our idea already, existing in our mind like what's the value, what's the money? That's changing right now. That's the biggest change.
>> YURI GRIN: Thank you Patric. OK. So the first who would like to get some use of cryptocurrency. We are moving to, OK, one, two, three. My God, you don't have much cryptocurrency here.
OK. So let's -- six questions. Let's start from this side, and then we'll jump. Please go ahead.
>> Good afternoon, my name is Hannah. I'm on the board of ISOCS special group on blockchain. But I also happen to be researching blockchain technology for my master's in diplomacy with a specialization on IG.
I am specifically researching the governance structure on blockchains, which is quite complicated issue. I know that we're here to discuss blockchain, but I hear a lot about cryptocurrency and Bitcoin specifically. So it's just good to mention that blockchain is inherent technology, based on which Bitcoin is operating.
When I was doing my research on specialized in policy, and tech policy in general, and I found out there are many challenges to deploy blockchain, and there are big question marks actually about the governance structure in public blockchains.
The private ones, I don't think we're going to talk about them now, because they depend on the core features of blockchain. But they are manageable, because we can hear now stories about banks trying to deploy blockchain to solve specific issues for their work.
But my question. So the core features of blockchain, are they compatible with the current existent regulatory frameworks or future ones. Because we know by next year we will have the GDPR implemented at the level of Europe. I think some of the core features of blockchain are not compatible with this kind of regulation.
For example, core feature of blockchain, does not really -- like it does not appeal to the new regulation.
So how the technology is going to address that. I also want to point out to a lot of policy issues that will come to the surface once this topic is more mainstream in the IGF. Unfortunately I think we're still discussing this at the basic level. I heard all the presentations and really like ABC of blockchain. I wonder when is the time, the right time to start talking how blockchain will affect some policy aspects of the Internet work, like privacy for example.
I know that different projects like Ethereum, for example, are working to shift the proof of work system to the proof of stake system. So we need I think, to kick start the conversation about the policy challenges and the regulatory challenges of deploying blockchain beyond the scalability issues and security issues. Thank you.
>> YURI GRIN: Thank you very much. It was last question, which was so long, I place 15 seconds as the longest one. Because there will be no time to answer.
(Laughter)
I'm not criticizing you, but given some kind of guidance to people. Who can answer? Patric. You have only 15 seconds.
(Laughter).
>> PATRIC DAI: OK. You mentioned the governance program for the public of blockchain. It's open challenge program. What I wanted to say, it's like the developer, they are working on this. For example, in many project -- I mean for Bitcoin, we have very bad governance. People are fighting to choose the evolution direction for Bitcoin like from one megabyte to block size to 2-megabyte of block size, people are fighting.
You see, like, OK, basically the foundation have a bigger power to make the harder (?). In the future, there are some projects also. They are doing some decentralized governance protocol because of the GDP on blockchain, so people can vote for the parameters change, for the network change. They can vote for the future.
And it's a very smart. It's more smarter than the government. The people can use smart contract to monitor the parameters on blockchain, and if something went wrong, the smart contract can make a proposal.
So it's very smart.
>> YURI GRIN: 15 seconds gone. Arvin, please.
>> ARVIN KEMBERI: I would just like to add one thing. When we're going to introduce regulation, I would say the time is always now. But the thing is, as earlier I suggested, we are in a phase of Internet -- let's say when we're going to have Internet Governance Forum, but blockchain governance forum. Because the multi-stakeholder model proved quite well for governance of the Internet and governance of peer to peer, open standards, et cetera. So why not have similar thing.
>> YURI GRIN: Thank you very much. Well done. 12 seconds. Your question, sir.
>> GABOR FARKAS: My name is Gabor Farkas, a member of the ISOC in Switzerland.
I think I support the development of all aspects of cryptocurrencies and blockchain. The importance of a structured governance for blockchain will have to have on its agenda, a very important aspect, is energy consumption.
Today, Bitcoin alone consumes 1% of the energy resources of the planet. If it multiplies by 2, it's going to be 2%.
So if we are talking trillions of dollars of value, that means that it might not be sustainable for the planet if we don't modify the aspects of energy. It might not be sustainable for the planet.
And if it's not addressed immediately, immediately, very soon, then we might not have a planet to support the cryptocurrencies.
>> YURI GRIN: Thank you very much. Very good comments. From that side. Please go ahead.
>> Hi, Marie Jones. I'm running the digital media covering Bitcoin, blockchain and the future of finance. How do you plan to control the impact cryptocurrencies will have on the world economy. Because nobody can destroy the blockchains.
>> PANELIST: Thank you for choosing that question. I believe strongly in crowd wisdom, more than government wisdom, to my opinion.
So something like decentralized mechanisms solving things from an organic perspective would be more likely to succeed than a decision imposed by a certain authority or a certain number of authorities.
So I would say let the evolution continue. The example of Bitcoin forks is one good example. You may call that Bitcoin itself. Had several of its community members decide that we would fork the same code into a different blockchain. So they resulted in blockchain, Bitcoin cash, and then Bitcoin vault. Each one having different characteristics, but over time you would see that the more favorable opinion would come as it evolves. So let the market decide at that instant, and have it organic.
Because if you impose something from top-bottom, that's in contrary to the wisdom of the decentralized network. So I would say keep that up.
>> YURI GRIN: So we have two more questions, and then you can please keep your questions for the next round. So yes, you, and then there will be online person.
>> PARICIPANT: Thank you very much. My name is Miguel, School of Economics, Moscow, Russia. Thank you for the great session. I greatly support blockchain technology. Though we don't have support for it yet. And personal data storage as well for the decentralized data distribution.
Several question. Agree or disagree. You agree that cryptocurrency is something next to the trust, energy currency step, right? Because it's actually more, less equal.
Second, if you're talking about emerging currency or trusts. Does it mean that cryptocurrency still be alive because until we have those people who actually trust, right?
So quite similar to the (?) scheme, right? That's it.
>> OK. So we have last question from our remote participants. And I'm reminding Yuri to choose one question from this round to be awarded. OK?
But not announce right now.
>> We do have a participant from Nigeria. And now we have a connection with him. Do you hear us? We have enabled your microphone. Could you please speak?
>> YURI GRIN: Is this his presentation? There was something on screen.
>> Hello. Hello? Hello? Hello. Can you hear me?
>> YURI GRIN: Yes, we can hear you. Just you have two minutes please.
>> OK. I can hear you now. I don't know if you can hear me.
>> YURI GRIN: Yes, we can hear you. Please go ahead. Two minutes.
>> OK. I think position is an era of blockchain. Develop technology. And cryptocurrencies (?) technology. Is that we need to look at, fundamentally, the protocols that we support the positive aspect of changes that technology, in which case is (?)
For example, there have been so much emphasis on revolution on policies, on (?) blockchain technologies and other cryptocurrencies.
(No discernible audio).
This is something we have to look at, because we have about 7 billion.
>> YURI GRIN: I'm sorry, can you speak a bit more loud. Because people does not hear you properly, I feel. Could you please -- a bit more loud.
>> I am talking louder. Hello, can you hear me more now? OK.
So what I'm saying is that we need to look at the issues of (?), where to put that?
How can people get those assets to put up with authorities.
(No discernible audio) people are making money from trading cryptocurrencies. How can we ensure (?) get --
The population is going to be (?)
(No discernible audio)
>> YURI GRIN: Last minute, please. Please, last minute. Last minute, please.
(No discernible audio).
>> YURI GRIN: OK. I'm sorry to interrupt you. Could you please summarize your presentation, because we really don't hear you well, and we are running out of time. Could you please summarize in one minute? Thank you.
>> The summary of my presentation is that (?) cryptocurrency, we need to look at issue of (?). How assets can be (?).
(No discernible audio).
>> YURI GRIN: Thank you very much. Yeah, very good point. Thank you for the suggestion.
If you can send your notes, by Internet, it would be helpful so people will read it and digest. The quality of audio was not really good.
So now I'm looking for timing. It's already 4:00. We still have 25 minutes, yes. So I'd like to make a change in the original plan.
We have only ten minutes for second round presentation. How people can cooperate from different regions. In order to continue this.
And then we'll have ten minutes for send round of questions, because I still hope people can get something in order to remember the session, for the good question.
So in this round, I'd like to start with Nathalia. Please, go ahead. Two minutes.
>> NATHALIA SAUTCHUK PATRICIO: OK. I will be very quickly.
(Laughter)
Before I take on the issue of international label, I believe that it's important to understand the international scenario and the specifics of region or county.
To do it, I think NRIs could work together to build a map of initiatives related to blockchain technology. From my point of view, it's essential to know more about the maturity level of each country or region in terms of blockchain technology. What are the main challenges they face, and which points are common among them.
After this mapping step, I believe it will be easier to develop effective actions. I think it's that for our perspective.
>> YURI GRIN: Thank you, Nathalia. Satish, would you like to continue?
>> SATISH BABU: Thank you very much. Some areas of working together would be sharing of experiences if someone has started using these technologies in real life, in our countries.
Assessment of risks, especially when it comes to communities which are not mainstream, not well educated. Because we have a huge number of people adopting technology, many of whom are using it for the first time through the mobile and so on.
The Bitcoin has some vulnerabilities which we don't realize. For example, we think it is completely bulletproof. It is not. It is susceptible to quantum computers. There are two algorithms, which can undermine the key used in the Bitcoin.
So if you have powerful kind of computers coming out in the next few years, maybe it can create a problem for Bitcoin, undermine the security.
So the assessment in both technology and the user bit could be considered. And finally, if there's any good practices or case studies of communities that use blockchain properly for their own use. I think we have to highlight that and share this information with all of us so that we can try replicating.
>> YURI GRIN: Thank you, Satish. Now I'd like to invite (?) to say a few words.
>> Thank you, chair. I think the collaboration amount. We can also learn some lesson from other organizations, like ISOC, or ICAN.
I mean it's not the same structure, but we saw their collaboration based on the region. Like different chapters. Because in each nation, they have their own development in the situation. The industry develop a different -- different nation. Each nation has their own chapter and they develop their own community, but also we collaborate on the international level. This is what we just it can be a bit practical. And also, I want to mention that sometimes when we discuss about topics on IGF, but we saw blockchain is very practical technology that we can really apply to some application or usage.
So also I would like to propose that we can collaborate based on some very useful applications. No matter it's very fundamental, open ledger, like quantum or other open ledger, very fundamental level. Or also it can be the application level.
Because currently, we are looking for the blockchain development, and different layers. We see blockchain and different layers.
In this way we can more closely collaborate, and we can see how we will develop in the future. But I saw what is very important, is the collaboration among nations. Actually, I think it's quite similar to the public blockchain. Because when we develop one public blockchain, we are developing around the world. Best deal. Best in the regions, and they want you to develop with the community in this region.
Under the IGF, under the NRI, we can also do the similar thing. Under this system, we can encourage the public blockchain or the application, and we can help all of this technology, to encourage to collaborate.
This is what I think maybe NRI can help on this, in this way.
>> YURI GRIN: Thank you, Lori. We have last NRI speaker. Armenia IGF.
>> Internet Society of Armenia. My question is very short. Is it really possible from government side to regulate cryptocurrency, especially Bitcoin? Very simple question. Are they able to do that?
>> YURI GRIN: Arvin, go ahead. OK. Now we have only ten minutes. So I think we can move again to the question. And maybe as we are near to the end of the session, it can be mix of question and comments and suggestions. OK?
So to have a more productive output. And there was two people from this. Please go ahead.
>> Thank you. This is Walid Al-Saqaf. My question is in line with what he said. But also is simple question.
My question is this. Blockchain, are you suggesting that the blockchain will assist, will continue to assist in isolation without policy and regulations? Because you mentioned that the innovation is smarter than government. Can you clarify that, please. Thank you.
>> Even right now, we already have some regulation. Blockchain is not the isolated form of the government. It's already under regulation rights now. Like in the U.S. People, they have the digital currency regulation released by ICC, well by some other government. Like in China, we have the regulation too. Same in other countries.
But the government to work for, even for Google or (?) it's like that. (away from microphone).
Bitcoin, like all cryptocurrency, they disrupt the one structure of the society.
Like the developer, they can magnify their work. Today they have Internet.
But the people who invented the Internet, the two professors, they didn't become billionaire, but Bill Gates or Mark Zuckerberg become a billionaire. At the time (?), but today you have a global ledger to recall clearly, everyone's contribution.
That's an innovation for global collaboration and for global cooperation. I think in 30 years, a lot of companies may disappear because a lot of people do a lot of work for big company. They work for open source protocol, and you have community (?)
That's something really happening now.
>> YURI GRIN: Thank you. We have remote participant.
>> Our Nigerian speaker have summarized his page, what he wanted to say. The first thing is we need to look at inheritance of cryptoassets, cryptocoins and other virtual currencies. As well as what we need to look at is taxation. This involves sovereign states and non-state actors. That is businesses.
>> YURI GRIN: Thank you very much. Now we have three more questions. I was told that somebody -- this table.
(Laughter)
But I was told there is lady on that side. If not -- do you want? No?
You are not lady, I was told there is a lady. So please go ahead. I'm sorry.
>> OK. So my (?) I'm from Italy and secretary of the NGO. I share the opinion with the lady there about the regulations and about the problem due to illegal export of currencies, as well as the Russian there about the (?), other things. But something a little bit concerning. No promise about the blockchain.
But back to the main problem. So I'll do the system. How does the cryptocurrency system protect the investors from all this big cloud of intermediation due to companies, providers, people offering cryptocurrencies that we don't know exactly what is in the background.
Because no state guaranteeing anything. So we have to rely on something that is completely immaterial, that can disappear.
So this could act as a bad ambassador for this new, let's say, age. That's all.
>> YURI GRIN: Thank you very much. Who would like to answer? Arvin.
>> ARVIN KEMBERI: Thanks, Chair. Thanks for this question. And indeed, there is a large part of virtual currency, cryptocurrency, which are related to something. There is not a basic of peer to peer sharing.
It's, as you said, might be policy. Might be machine or something like that. But one important thing, and I'll again go back to my paradigm. At the beginning we also asked how can I trust this website. How is this trustful?
I think maturity will bring some kind of a filter to it, and on the other hand, I guess, I can't believe multi-stakeholder corporation can actually improve that. In drafting the guidelines in which the regulation can move.
>> YURI GRIN: Thank you very much. Now three questions from -- would you like to say it louder, please?
>> You had no concerns about bad ambassador that kill the market for cryptocurrencies, because OK, this process will take some time, but people will lose money. Not lose other things, like it was at the beginning of the peer to peer exchanging music. It's quite a different level I think. OK.
>> Briefly, really I don't think, because there is large part of technology which is valid. Of course someone can lost his money. I can't really -- there's no litigation for that, to be honest.
But the part of this technology is genuine. It's there working. So I think that will prevail, actually. Thanks.
>> YURI GRIN: Three more question. Please go ahead.
>> I'll try to be as brief as possible. On the centralization issue. Don't forget Bitcoin, about 80% is controlled by seven mining pools which are all based in China. Don't forget that.
Second thing is don't forget that to make the bridge between what is real in the digital world and what is real in the real world, we need states. It's the only intermediary that can enforce anything. So if you have something written on the blockchain, I'm the owner of this house and the army comes into your house and kills you and buries you in the garden. But who cares. It's a blockchain, you're still dead.
Do you believe the majority of people will adopt a cryptocurrency which so disproportionately awards early adopters. Just because you join a year later, your purchasing power can be divided by 10, so even though you started on the same basis as your neighbor who has the same savings you have.
We need to really rethink completely monetary policy, the monetary system and Bitcoin to me, is just the best way for Nakamoto to make this known by harnessing human greed.
>> YURI GRIN: Thank you for your comments and questions. Would like to comment? Satish.
>> SATISH BABU: I sympathize with the sentiment behind the question. I would say that it's not fully correct. But the fact that two people starting out and someone who joins later, does not gain. If you look at Bitcoin, that's not the case. The Bitcoin is valuing so fast, that even if you're a late comer. Assuming this continues to be like this, people are not losing out. But the energy part that was mentioned earlier. If the Bitcoin price is going to go up, the actual problem is that there will be more investments in mining. There will be more consumption of electricity and so on. So that part, yes.
The final link between the real world and legal world. I think we will have smart contracts.
>> YURI GRIN: Thank you., Satish. 30 seconds, both of you.
>> Take my 30 seconds.
(Laughter)
Because he's so anxious.
>> YURI GRIN: OK. One minute.
>> I'd like to say there's really no right or wrong at this stage. This is called disruptive technology. So we need to understand that there are no angels or devils in the picture. All there is that some people came out with this new idea. It's humans at the very end who might use it for good or bad. You might say Bitcoin is good for some people in some ways and bad for some people in some ways.
If you say Bitcoin as a whole is bad, I would say --
>> YURI GRIN: It's fine. No discussions, please, gentlemen.
>> I have a legal and computer sidelines background. And I work on blockchain governance. It's a distributed global technology and we have to be aware of that. When we look at Internet, it's a global technology about information. Mainly.
When you look at blockchain, it's a global technology about transactions. When we try to regulate it, and we try to regulate it from a central point to central governance, it defeats the purpose of a (?) technology. When we try to regulate it on a national basis, it doesn't work. Because it's a global technology. So we have to adopt a different approach, an approach that is on one side, distributed. On the other side, it's global.
And not a national regulation. But national regulations, we can approach exchanges, we can approach ICOs that have a seat somewhere.
We can approach wallet services. But we can't approach the blockchain in a proper manner.
>> YURI GRIN: Thank you very much. Last comments, questions. Now you already spoke once. So if somebody's willing? Go ahead.
>> PARTICIPANT: Somebody spoke earlier about the amount of energy that Bitcoin was using. My name -- I come from Iceland. I work for the Human Rights Council. I was wondering what your opinion on the whole energy thing is, because -- well obviously, it's not going to double forever. At some point it's going to reach a sort of ceiling of sorts.
And I found it very interesting. Actually I was at a session yesterday about blockchain, and the main speaker said something along the line that Bitcoin was inherently unusable, because of the fact that it uses so much energy. But then again, so does Facebook, so does Google.
>> YURI GRIN: Thank you. Patric, would you like to -- China has -- according to gentleman, 70%. OK. So tell us. Microphone.
>> PATRIC DAI: So personally, I think the energy is not a problem at all. The readings like, we can always do -- we can change the consensus. When Bitcoin invented. He has no better ways to make it become a really decentralized network.
So he pick up the random connection to choose who have the right to release new money to issue, the new money and who have the right to book the ledger for the last ten minutes. Mining is the only way to maintain consensus. But there are many ways to do that. In quantum we are using proof of stake.
Even the mining program, it's a program, the energy is not the biggest problem. For example, a lot of company in the world, they use a lot of energy to mining the gold. What is the gold they use for? After they mine the gold, they put it into the central bank. The central bank put the gold under the ground again.
So they wasted two energy just to mine the gold out or put it under the ground. So that's what happen to the gold industry. It's super energy wasting. That's the truth.
>> YURI GRIN: We have last comments from remote participants.
>> I'm a political activist for 16 years and computer engineer since 1984. And a blockchain programmer since 2013. Program and activists are not speaking the same language. Bitcoin is a commodity, therefore there's no protection. People will lose money. People need to learn better blockchain hygiene. That's it.
And there is another continuation a bit. People will continue to imagine solutions regardless of what the law says. Regulators need to educate the general population on users instead of trying to curb what a technology will do.
>> YURI GRIN: Thank you very much. OK. We exhausted all our time. So we have Paolo to briefly present a report. Like our rapporteur.
>> PAOLO: Thank you. I'm try to make the wrap-up as brief as possible. Because there were so many different discussions and points of view.
If I end up reaching all of them, it might take more than two minutes.
>> YURI GRIN: Two and a half minutes.
(Laughter)
>> It beginning, he briefly introduced the topic and gave a brief history of blockchain and Bitcoin, how it has evolved over the years. He spoke of the benefits to governments in securing data through the blockchain and how it might be a tool for governments to secure data and disrupt technology against them.
And how there was a utopian planted by blockchain originally and how this might evolve in the future. He explain the difference between the blockchain and cryptocurrencies and there are alternatives to each model. Not just blockchain. Society has to measure the benefits and risks through proper governance.
Mr. Patric Dai, he explain how people are moving from real-world currency and physical currency to a digital finance and digital interactions.
He also spoke what blockchain is creating is not entirely new. It's not only innovation, but a new trend in society.
Now disruptive trend that just changes the way -- how people relate to each other in terms of value.
He spoke how you have to separate cryptocurrencies from platforms, because platforms are allowing for (?) transactions and (?) platforms.
>> YURI GRIN: You still have 30 seconds. Not more.
>> I have to run.
>> YURI GRIN: Your conclusion, please. I'm sorry.
>> It's really hard to wrap up everything.
(Laughter).
>> YURI GRIN: Let's not do it.
>> So many things. So many different subjects.
>> YURI GRIN: I understand. Thank you for your efforts.
>> I'm sorry.
>> YURI GRIN: Maybe you can put it later.
>> There will be a kind of report later. So you can contribute.
>> There will be a report on the website when we're finished the session.
>> YURI GRIN: So I fully understand Pablo. It's difficult to summarize. So he's doing a good job. But it summarize in a few words. I am also not going to do this. Because as said in the very beginning, you might need the whole type of IGF on this issue in order to discuss.
(Laughter)
So maybe next time there will be more session and more focus. But it was great to have all of you with your presentation. I think it was useful.
And I really appreciate questions. So before, I will close the session I'd like to ask our grand jury announce who deserve Bitcoins. And other coins.
>> Quantum coins.
(Laughter).
>> YURI GRIN: At least while we are thinking -- so I'd like to give the first one to this gentleman. So you please approach to us, and then one of the gentleman will give you later on. But two others, please. Lori.
>> NATHALIA SAUTCHUK PATRICIO: I think the governance.
>> YURI GRIN: It was my choice as well. Let's applause to our speaker.
(Applause)
And please approach to us and you will get from these three gentlemen. It's not my business. Thank you to everybody.
>> The session is adjourned
(Session adjourned at 4:30 p.m. CET)
The gender gap reflects the concentration of women at the bottom of the pyramid. And of course, they're going to be later to come online. Technology in and of itself, but also inequality, social and structural inequalities that exist in the economy and between men and women.