Podcasts

Moving beyond the blockchain hype with MIT’s Dave Shrier

  • MIT's Shrier is the author of the new book, Trust::Data: A new framework for identity and data sharing
  • He presented his work at the 2016 Tradestreaming Money Conference.
close

Email a Friend

Moving beyond the blockchain hype with MIT’s Dave Shrier

Blockchain may be nearing the peak of its hype cycle but much of the hubbub is just that — top financial firms are still just testing distributed ledger technology, trying to figure it out and understand its potential. Few understand how the world is changing like David Shrier.

David is the managing director of MIT Connection Science and the author of a new book called Trust Data: A new framework for identity and data. You can get it at Amazon: a.co/7yBpXBj

David Shrier presented at the 2016 Tradestreaming Money Conference held in NYC last November. The audio you’re about to hear was part of his talk on moving beyond the blockchain hype.

Subscribe: iTunes I SoundCloud

Below are highlights, edited for clarity, from the episode.

Understanding blockchain and its potential

What is blockchain? Blockchain’s a ledger, a receipt. A lot of financial services firms are essentially record keepers. An order ticket is just the front end of a ledger process. Blockchain is interesting in that it can take a lot of costs out of the complex systems we have to govern today. But we’re interested in even bigger problems. One of them is the big data problem. Sensitive personal information is getting hacked frequently and the problem is only getting bigger.

On the other end of the spectrum, data is more valuable when it’s shared. Wouldn’t it be great if 30 of the largest trading partners could see their aggregate risk exposure to an individual security without revealing any individual position? But we’re not there yet. We’ve taken our old way of doing things in the analog world and made them digital — this is the analog-digital gap.

MIT's Dave Shrier presented at the 2016 Tradestreaming Money Conference
MIT’s Dave Shrier presented at the 2016 Tradestreaming Money Conference

Digital identity in an analog world

Our current expensive model of identity is still totally based on analog paradigms. Our parents attest to our birth and eventually you get a birth certificate that can be easily forged. We’ve had genetic testing for decades but we still rely on this analog attestation model.

Our existing models are centralized, easily forged, and costly to manage. The US Treasury would love to see more access to the unbanked and underbanked while banks complain that regulation is too expensive to service these people. The mobile phone and behavioral biometrics are really hard to duplicate. If you extract all a user’s patterns of behavior using a phone (like what angle they hold it at or who they call frequently), you could extract a digital fingerprint that could be thousands of times more secure than a password.

OPAL Enigma

The Trust Data system we’re proposing addresses the problem that we need better systems as we move from an analog world to a digital one. While we want to share more data, we need to tighten the privacy around it. MIT’s OPAL/Enigma is one of these systems.

OPAL stands for open algorithms and it’s a very powerful idea. With OPAL, you bring the code to the data rather than bringing the data to the code. Instead of centralizing data, this is more secure because you can leave the data where it’s stored and machine learning allows questions and answers to come in and out securely.

In terms of security, Enigma would need over 1000 private keys or passwords to be able to hack into it. Enigma’s data is distributed and encrypted but you can still make useful sense out of it while it’s encrypted.

 

0 comments on “Moving beyond the blockchain hype with MIT’s Dave Shrier”

Podcasts

‘It’s not just about a QuickBooks integration — you have to look at the business problem’: Codat’s Peter Lord

  • Codat zeroes in on small business financial data, which is a very different problem to solve than aggregating consumer data.
  • Peter Lord, CEO of Codat, joins us on the podcast to discuss the evolution of use cases for SMB financial data that he’s seen over the past 5 years of running Codat.
Zachary Miller | October 05, 2022
The Green Finance Podcast

The Green Finance Podcast Ep. 10: Tangible steps banks can take to help their customers lower their carbon footprint

  • The majority of people want to know more about the environmental impact of how they spend their money and want their banks to help them take action and reduce their environmental impact.
  • I'm talking about this today with my guest Emma Kisby, UK & Europe CEO of Cogo - a company that provides carbon footprint management products.
Iulia Ciutina | September 30, 2022
Where Credit's Due Podcast

Where Credit’s Due Ep. 10: Getting capital without dilution or debt through recurring revenue financing, with Pipe and Anthemis

  • Today we're talking about another way of accessing capital: recurring revenue financing. If there's cash flow coming in, this recurring revenue is made into a tradable asset that can be sold to investors.
  • It's a dilution-free and debt-free form of financing, which we explore in detail with Michal Cieplinski, Chief Business Officer at Pipe, and Farhan Lalji, Investor at Anthemis.
Iulia Ciutina | September 28, 2022
Podcasts

Behind Amex’s use of Kabbage as ‘the heartbeat’ of its strategy to help SMBs with cash flow

  • Two years after American Express bought small business lender Kabbage, the products are integrated and growing.
  • Tearsheet sat down with Kabbage's head of marketing to get insight on where the growth is coming from and where the company is headed.
Zachary Miller | September 27, 2022
Payments, Power of Payments Podcast

Power of Payments Ep. 14: JPMorgan vs Stripe and Block, CFPB is coming for BNPL, and is LTO a viable BNPL alternative?

  • This week, we talk about JPMorgan’s acquisition of payments firms Renovite, and the CFPB’s recent report on BNPL firms, which suggests that regulation is coming for the sector.
  • We also discuss why lease-to-own, which is another type of installment payment option, has been gaining popularity in recent months.
Ismail Umar | September 23, 2022
More Articles