Andrew Keys

Blockchain Technology, Bitcoin, Ethereum, and the Explosive Growth of the Cryptocurrency Industry – a conversation on the market forces with Andrew Keys of Consensus Systems

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Andrew Keys of Ethereum focused Consensus Systems speaks with Demetri Kofinas about the latest developments in the Blockchain universe including Bitcoin Cash – where it’s been, what it looks like today, and how it has the potential to shape all of our futures

In this Market Forces segment of the Hidden Forces podcast, Demetri Kofinas speaks with one of the foremost authorities on blockchain technology and the Ethereum protocol, Andrew Keys. Andrew Keys heads Global Business Development for Consensus Systems, better known simply as ConsenSys. He drives strategic technological partnerships, business development, and communications for ConsenSys and co-founded the Enterprise Ethereum Alliance (EEA), an open-source cross-industry initiative focused on connecting Fortune 500 companies, academics, and technology vendors with Ethereum experts to produce industry-grade blockchain platforms.

In this hour-long conversation, Andrew Keys speaks with Demetri Kofinas about the latest in the blockchain universe. While most are undoubtedly glued to the bitcoin cash news that rocked the cryptocurrency industry yesterday (August 1) regarding Bitcoin’s first “hard-fork,” Andrew continues to focus on the bigger picture at hand. As fascinating as Bitcoin has been and continues to be, particularly as the technology flag-bearer for its novel blockchain technology, Andrew’s attention has been on what he believes is the true technological panacea for everything from payment processing, contract transfers, application creation – even the future of the internet as we know it. Hence, his role spear heading business development for Consensus Systems.

Building on the innovation, adoption, and possibilities of Bitcoin, Andrew has immersed himself over the last several years, diving head first into what many people are calling Bitcoin 2.0 – otherwise known as Ethereum. Andrew turned an opportune meeting with the founder of Consensus Systems and co-creator of Ethereum, Joseph Lubin, into a role that has quickly evolved into Andrew sitting center stage as one of the world’s go-to business ambassadors of blockchain technology and the highly advanced Ethereum protocol.  Andrew has been invited to all ends of the world to explain blockchain technology and Ethereum to industry titans in the worlds of finance and technology. Just this year alone, Andrew traveled to and spoke at the World Economic Forum in Davos, Switzerland and the Global Blockchain Financial Summit in Hangzhou, China, meeting with executives at JPMorgan Chase, Microsoft, and IBM as well as top government officials from around the world.

Today, he is here with us to discuss blockchain technology, Bitcoin, Ethereum, and the explosive growth of the cryptocurrency industry – where it’s been, what it looks like today – and how it has the potential to shape all of our futures. “This is ultimately about the move away from a centralized system for organizing society towards a decentralized one that is more appropriate for the technological present,” says Demetri Kofinas. Indeed, the question of centralization versus decentralization is central to the framework of blockchain technology. It also speaks to the challenges of scaling the network, which was the central concern of the bitcoin mining community that initiated the recent “hard-fork” in order to create bitcoin cash. For all of recorded history, human beings have achieved scale through a bureaucracy. Empires, nation states, corporations, etc., are all built upon layers of authority and thickets of bureaucracy. Blockchain manages to overcome this by shifting the burden of validation from the center to the periphery. In other words, no central authority is required in order to approve any transaction or mediate any dispute among users of the blockchain protocol. There is no need for third-party verification (TPV). This process is achieved through consensus. Instead of requiring the use of digital right’s management software in order to manage ownership rights over music, for example, users can rely on the Ethereum’s blockchain network. Rather than require a central clearing house or exchange to validate a debit or credit, you can use Bitcoin to transfer value directly from one party to another. Again, there is no need for third-party verification.

In order to understand why scale is one of the big challenges facing bitcoin, Ethereum, and other blockchain protocols you need to understand how transactions are approved and consensus is reached on the blockchain. The network protocol distributes the accounting to users on the network known as “miners.” The term “miner” can be misleading. The miners are simply individuals who are incentivized by the blockchain protocol to devote computer power towards “proof-of-work.” This “proof-of-work” is the means by which miners are able to validate transactions, requests, etc., across the network. Each block along the chain represents some amount of bitcoin, ether, or some other token. The cost of this consensus process is reflected in the physical work that must be conducted by the massive amounts of energy consumed. Members of the bitcoin community have tried to address this roadblock to scalability by means of a hard-fork. Andrew Keys is hopeful that Ethereum, which faces similar scaling issues, will manage to overcome them with upgrades. Specifically, there are three that Andrew Keys mentioned during the course of this conversation. The first is what is known as State Channels, which allow Ethereum’s users to open a transaction or agreement of some sort and record multiple transactions over time before closing it. This is the equivalent of keeping a tab open at a bar and only closing it after you have left for the evening. This reduces the burden of proof on the network tremendously if it is adopted at scale. The second upgrade that Andrew is counting on is what is known as PoS or Proof of Stake solution. It is what Vlad Zamfir calls “Casper.” Finally, Ethereum has been working for years now on a solution for sharding address space enabling only subsets of transaction validators to process subsets of transactions in each time frame. This solution may come in the form of “Quadratic sharding.”

Andrew and Demetri also discussed the issue of security, and how Ethereum enhances security for its users, and how the blockchain protocol has never been hacked in its entire history. It is important to remember that the hacks associated with bitcoin were all at some software layer above the basic protocol. Mt. Gox was an exchange and Decentralized Autonomous Organization (DOA) was an investor directed venture capital fund. Both were entrusted by users of Bitcoin or Ethereum to hold bitcoin or ether. Therefore, the bitcoin itself was not hacked. Neither was the ether. The hacking happened at some level of software above the blockchain protocol.

The conversation does not end with security. Demetri and Andrew discuss the role of Wall Street and the financial sector, and how Andrew believes the Ethereum protocol can and will continue to be used by third party developers, institutions, and Fortune 500 companies in the future. This includes Paypal and Google, who have formed a new digital wallets partnership that enables payments through the tap of a phone from PayPal accounts at thousands of new retail locations. It also includes companies like Toyota and Merck, who have joined the Enterprise Ethereum Alliance Group in order to help standardize this nascent industry and make it more compatible with large scale businesses like their own. They talk about smart contracts, and Andrew Keys explains to the audience exactly how these consensus-based contracts work. Demetri raises the concern that governments may begin to over regulate and even shut down some of these cryptocurrencies. He believes there is a risk that governments may even make it impossible for businesses to effectively build platforms on the underlying blockchain technology. Users of the currency may also be targeted. Andrew makes the point that many governments are actually experimenting with blockchain for their own purposes. The Dubai government, for example, has announced that it will be moving all its documents onto blockchain and go paperless by the year 2020. In a report entitled “The Future Is Here,” Singapore’s central bank announced its completion of the first phase of a project involving the development of a tokenized version of the Singapore dollar (SGD) on an Ethereum-based blockchain. As if this were not exciting enough, we also hear Demetri and Andrew discuss the viability of the InterPlanetary File System (IPFS). This, Andrew Keys believes, is a crucial part of what could become the future of the Internet. The industry is still in its nascent stage, and there remains a great deal of uncertainty in the space. That said, the opportunity is real.

If you have been looking for a great resource for explaining “what is Ethereum” or “what is blockchain,” then you have come to the right place. One of Andrew Keys’ main tasks as head of Global Business Development for Consensus Systems is to help educate potential users of this technology on how it all works. You won’t be disappointed.

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