For over a century, a resource of immense value dominated headlines, spawning a lengthy debate over global regulation. It altered foreign and domestic policy and served as the primary catalyst for economic expansion in dozens of countries, including one that remains the world’s foremost economic superpower in the United States. It ubiquitously revolutionized the transportation of goods and of people, and laid the foundation for the rise of a corporate oligopoly in international trade and business. Even in present day, oil remains an international talking point and a bedrock of many economies. The internet and the technological revolution over the last decade; however, have given rise to a new era. In the words of the UK mathematician, Clive Humby, “data is the new oil.”
Much like the thirst for its predecessor, the insatiable demand for data has begotten unforeseen challenges, chief among them concern over its protection, availability, and transportation. Blockchain, in its infancy, has the ability to potentially mitigate some of those difficulties and offer data something the oil industry lacked for decades: a viable and cost efficient transportation network, leveling the playing field for global competitors in the space. Bottos, a decentralized data sharing network protocol based on blockchain technology, is at the forefront of that movement. Technologies inspired by blockchain’s potential could ensure the future of data won’t parallel Rockefeller’s monopoly over the oil industry, or even the oligopoly that followed. What does that mean for tech giants: Facebook, Google, Netflix, Apple, Amazon, and others? It might mean a world where companies, such as the artificial intelligence based start-ups that Bottos targets, can compete with a growing access to data. Bloomberg Tax portfolio editor Todd Cheney had a chance to sit down with the CEO of Bottos, Xin Song, at the 2018 AI Congress conference in Las Vegas to discuss the possibilities.
Bloomberg Tax (Todd): Can you give a background of what Bottos does?
Bottos (Xin): What Bottos would hope to achieve is to use blockchain technology to create a platform for AI companies to grow, to get their resources more efficiently with low cost. So from product point of view first, we are a public blockchain. On top of the public blockchain we also offer four DApps (decentralized applications), one is the data marketplace, [the others are] model marketplace, data starter sharing, and computing power sharing. We think that AI has three main factors, computing power, algorithm, and data. In terms of a product battle, it’s a public blockchain plus four applications. Every single blockchain is decentralized so the ownership, identification, and trace-ability is very clear and transparent. All the data you can’t change.
Bloomberg Tax: Are any other companies using a similar strategy or is this somewhat new and innovative? Do you have any main competitors?
Bottos: We have competitors in certain aspects, but they are not doing the same thing. We’re trying to create a whole AI ecosystem. So for each of our four markets, what we are doing [is allowing] them to do other projects. For example, they can run in place. Other companies are centralized marketplaces like CrowdFlower and other decentralized marketplaces like Ocean Protocol are doing this just for data market place or [just for] computing power. Singularity. None of them are trying to combine everything together. That’s our key differentiation from other projects.
Bloomberg Tax: When you say public blockchain, you mean that basically anyone would have access?
Bottos: Yes. The public blockchain means that nobody has privilege, even the founding team. Once we release the public blockchain, we have the same rights as all of the users.
Bloomberg Tax: When I talk to people, there’s a consensus that the blockchain technology eliminates the need for, in some sense, cybersecurity because it’s very difficult to hack. Can you kind of explain why that is or do you believe there is a way to hack in and change a block?
Bottos: I think that question is very technical. From a technical point of view, everything can be hacked. So when people talk about blockchain cannot be hacked, technically speaking this sentence is wrong, but the cost to hack blockchain is very high. I’ll give you an example, blockchains aren’t like a centralized database. For a centralized database you store all the data in one database. Once you have the username and password, once you hacked one password, you can change everything. That’s very dangerous. In a decentralized database, for example, say there are 10 blocks, and for all 10 blocks you record the transaction data. If you want to hack this transaction and change the number 10 to a number 11, you would need to hack off all of those ten blocks. What if I already recall the transaction in 10,000 blocks? You need to hack 10,000 blocks to change this ten to an eleven. So the costs to hack are very high and that’s why people say that it is immutable, that blockchain cannot be hacked.
Bloomberg Tax: What is the game plan after you release the public blockchain?
Bottos: Well the public blockchain is the bottom layer, but we still have four markets to develop on top of it. The data market is the first one. The model market, data sharing, and computing power are also three service markets that need to be developed. In addition, we still have a lot of other things that are on this public blockchain we need to develop to make it more mature. In addition, we need to optimize the process to view an app that is based on Bottos.
To give you an example, say you want to calculate an equation: 10 x 10 = 100. That equation is easy for you, but if you have a calculator it is even easier. Without a calculator a public blockchain would need 10 papers to write down the equation to calculate this. So if you only have the public blockchain you need to write everything down on paper. So we need to build certain tools and the calculators to allow developers to implement their apps much easier based on Bottos.
Bloomberg Tax: What is the timeframe for this development? Is it a month or years? A decade? As far as the development of these four platforms on top of the base of the public blockchain?
Bottos: The current planned data is everything within one year, but the detailed roadmap we are still in discussion.
Bloomberg Tax: So not far away at all. What do you think is the most applicable industry for the technology?
Bottos: It depends on the industry. In the logistic industry the transactions are highly frequent. For those high frequency transactions obviously blockchain right now is still pretty limited in part of those sections. It’s better to find some industries with lower frequency transactions for the current stage of blockchain technology development. In the future, there are a couple of projects that they are doing some research and development trying to improve the transactions per second and the scalability of blockchain technologies. So we may see improvement in the long-term future of it, but it cannot be as efficient as the centralized database.
Bloomberg Tax: So my guess is that we are still a ways out from seeing this implemented in, let’s say, the financial industry, where you have higher frequency transactions.
Bottos: Yes, but right now there are some applications of the technology in financial services, especially in the payment portion of it. The low frequency payment is a very good scenario for current blockchain technologies.
Bloomberg Tax: Could it be used for apps such as Venmo, where you transfer currency to your friends? For example, what about the tracking of transactions for the entire app?
Bottos: Yes. I would say that is a very typical application scenario for blockchain. Those transactions in a blockchain, nobody would be able to change.
Bloomberg Tax: How far are we from seeing widespread adoption of blockchain technology, ubiquitous across the US and internationally to where we see it in everyday life?
Bottos: I would say it should be much shorter than people’s expectations. The current development stage of blockchain is just like the 90’s of the internet. Not many people in the 90’s expected that right now everyone would be using the internet. You didn’t need to understand what WWW meant, or what HTTP meant. You just use them every day. Blockchain is the same thing. You don’t have to know what blockchain does or is so it should be much shorter, especially with so much capital injection into the industry. The developers are working on improving the efficiency scalability. You will see more and more applications of blockchain into society and within five years you will see blockchain in your life every day.
Bloomberg Tax: In the long-run, do you see the technology as a compliment to certain functions within industry practice or do you see it as more of a supplement to entire industries? Could it possibly eliminate the need for financial institutions?
Bottos: It’s really, really hard to say. Technically, it is possible. You won’t need centralized organizations to give you certain credibility, transaction verification, or other banking services. In a perfect world of blockchain, you wouldn’t need even a government to issue certifications or lend credibility because blockchain would be clear and transparent. But, in reality people still need government. In reality the idea of not having a government isn’t possible. People still need banks to do certain verifications. Many of the functions can be replaced by blockchain, and it will reduce banks operating costs significantly, but I still believe there are functions that banks cannot replace with blockchain. I just can’t give you a list of them.
Continue the journey on leveraging a public blockchain to more cost efficiently share resources – including data – on the week of 06/04/18
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