Timothy Vasko

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Trust Economics: The evolution of Media, News and Blockchain

February 20, 2019 20:03

Trust Economics

In the age of Fake News, it seems potential biases of journalistic media have become common cause for concern. As a strategy of the Trump Administration, “Fake News” is an epithet employed to attempt disavow and discredit any reporting that does not suit the President’s agenda, or his selective memory. That said, it is nevertheless important to approach any media with some degree of scepticism. Any mainstream media is of course necessarily driven by an agenda– it’s called revenue. There is a lot of good reporting out there. But, misleading stories that leave out contextualizing details, and alternate perspectives, are far from scarce. 

Lately, the stories emerging from the financial sectors of the mainstream press, while not necessarily “Fake News” are most definitely “Incomplete News.” This is particularly the case when it comes to reporting on the shift from a traditional centralized economic model of establishment-based banking and financial markets, to decentralized digital platforms.   

Recently, both Bloomberg and Forbes have published stories singing songs of doom and gloom surrounding the ICO market. Pointing to the failed cryptocurrency offerings that have emerged over the past few years, they cite statistics sure to leave even the most enthusiastic crypto proponents with a sense of unease. For example, one article from Bloomberg states, “more than a thousand digital currencies have failed…” noting this has “[lost] investors billions…” While it is accurate has been much “lost” in the wild ride of recent digitally decentralized markets, much ground has been gained in re-creating a better economic model with blockchain. 

The evolution of these new “digital economic” markets in fact are directly tied to the lessons gleaned from the far more profound losses of the financial crisis of 2008. Indeed, that economic crisis belongs to a history of financial misconduct originating at least as far back as the fraudulent Wall Street practices that began, in recent history as early as the mid 1990s – certainly long before then as centralized authority over wealth has reigned.   

Let’s recall the climatic event on September 17th 2008, when Lehman Brothers failed, leaving “$691 billion in assets gone,” CNN. This event was the largest bankruptcy in history. Before that, former Wall Street darlings, Enron, WorldCom, and little known Finova Capital, in the early 2000s set record bankruptcies. Like the Guinness Book of World Records, public companies, once stars in their industries, have cost the global financial markets trillions when ‘found out’ in their practices of cooking book and speculating with shareholder dollars. To put the single failure of Lehman in perspective, the losses of this firm were greater than the entire market cap of the Cryptocurrency market at its peak. This includes Bit Coin and all the rest. 

  The failure of “audited” public companies gave rise to BitCoin - this new method of building digital trust economics, financial systems, predicated on the removal of centralized control in favour of a distributed immutable trusted ledger called “Blockchain”. Thus, it is paramount that before we are too quick to “buy” the story of failed Cryptocurrencies, we keep in mind that in just three days an estimated $2.5 Trillion in market value was lost in 2008. The total “conservative” estimate placed total costs at $12.8 Trillion in market value losses, during the recession that ensued according to the Daily Ticker .    

In 2017 approximately $6 billion was invested in ICOs, an attempt to remedy organized fraud and control that devastates retail investors in existing financial markets. That’s less than .005, or one half of one percent, of just the estimated losses in market value from the banking and Wall Street lead collapse in 2008. 

In my and many others’ opinion, $6 billion, is a very small price to pay to get the world to wake up to the benefits of Blockchain, the most significant outcome of Bitcoin. This is perhaps why famed VC Andreessen Horowitz just announced a $300millon dollar fund to invest in Crypto and Blockchain according to Wired. Clearly, professional investors see the writing on the wall clearly. They perhaps can foresee, and are willing to bet, that the ICO phase of Bitcoin’s evolution was a necessary first step. This while retail investors are “being warned” of the purported bust. 

Inventing the cure for the issues plaguing our markets from centralized authority cannot come cheap. Yet the benefit of a distributed, decentralized, Trust Economy is clear. And, the upside is yet untapped, with many other industries that hold a similar centralization profit model, manipulating margins for the sake of profit (e.g. health care, pharmaceuticals, food supply chain to name a few) are ripe for disruption with Blockchain too.   

So, before we “buy” the “Fake News” stories, or “Incomplete News” that is written to boost the favour of ad revenues to reporting entities, paid largely by the existing firms that stand to be most challenged Blockchain, let’s understand, more about why Bitcoin started, and subsequently, why Blockchain is taking off.   

Let’s consider some of the most notorious frauds in the history of Wall Street. Starting way back in 1929, the insider trading laws were established as Albert H. Wiggin Chairman of Chase Bank (J.P. Morgan Chase predecessor), short sold 40,000 shares of his own bank to amass a fortune (about $5.7 billion in today's dollars). Insider trading wasn't illegal back in 1929, and thus in 1934 the Wiggins Act was passed to place penalties on insider trading. "The 10 Biggest Wall Street Busts of All Time" by Sam Becker provides a great summary of some of the most infamous names that have run away with the cash.   

Unfortunately, the trends of violating position and trust when it comes to money, in banking, on Wall Street, and in health care, hasn't changed much in the last nine decades. These well-established, audited, public reporting, companies, affected many more peoples lively hood, savings, retirement accounts than 2000 times the current “risk capital" that has been put into the cryptocurrency markets. 

Indeed, "new markets", while risky and certainly not without their own problems, (for example, the credibility of the ICO players being questionable) have legitimate players, thinkers and technology development companies trying to do something market regulators of all forms have historically failed to do. This is, to remove the burden of ‘trust’ from the hands of people prone to fraud and greed and put it into a distributed ledger for transparency and decentralized control. This is the riveting change that Blockchain is poised to make in the re-formation of capital markets and the trust based economic ecosystem. And it is why many billions are forming around blockchain technology.   

We have trusted banks, accountants and the institutions structured to handle our finances, health care and insurance for over a century. And, frankly, it hasn’t gone great. We have trusted Wall Street and reporting formats. Unfortunately, some might say "finally", trust, today, is at an all-time low. When it comes to centralized power, and money, people have proven to be poor custodians of trust. With money comes power, and as 19th century British politician Lord Anton has famously been paraphrased, "absolute power corrupts absolutely.”   

With the latest market crash driven by the Wall Street investment and commercial bankers, we have seen the emergence of technological solutions such as Blockchain that coincidingly has been driven by the birth of BitCoin. With the computational power we have on the Cloud today, and the underlying technology of Blockchain, we have begun a path that allows for financial rewards that distribute power. No longer will one ledger rein absolute in some inaccessible, opaque centralized authority. Instead, trust rather is poised to be distributed, transparent, and diffuse through blockchain distributed ledger technology DLT. 

Once power, supported by some of the largest accounting and law firms in the world, who have turned a blind eye, firms that thrive under the protective veil of "client privileged" information, in the name of fee revenue (as the recent high-profile case in the USA with the President's personal attorney now under attack by the Justice Department demonstrates), is distributed into code, the playing field begins to level.

Investigative reporter from the United Kingdom, Richard Brooks, has recently released his exposé, "The Bean Counters: The Triumph of The Accountants And How They Broke Capitalism". Following this publication, you can expect to see similar revelations, as Blockchain reshapes the economics of entire industries. As ‘TrustEnomics’ (which is the working title of my upcoming book – you can ‘pre-register’ to follow the books evolution if you’re registered at https://blockcerts.io/), become more normalized, we will see increased transparency and immutability on the ledger.   

So, the next time you read about the "volatility" or "fraud" of BitCoin, as stated by the current J.P. Morgan Chase CEO, Jamie Diamond (recall ‘insider trading’ was defined by the first CEO of Chase), remember what BitCoin and Blockchain have been invented to accomplish. It will take some time, it will take some R&D - but you can bet that this wave of innovation in ‘Trustenomics’ is here to stay, and there will be a new format for business models and the financial models that underpin them.    

The upside far outweighs the historic downside of a system that no longer has a future with centralized power that consolidates and corrupts absolutely. This is the only way forward for an ever-expanding population that needs economics, business, jobs, financial investment, health care, global distribution, and regulations based on trust that we can well, trust.

Blockchain: Ideology vs. Reality

February 6, 2019 12:35

Blockchain: Ideology vs. Reality

It was 2014, 2 am in Silicon Valley. I watched from my open desk in the downstairs “pavilion” at Plugnplay as a pizza delivery guy ran up the stairs. More than a bit worn and hungry and pushing forward over a perplexing integration issue, I decided to follow the insatiable waft of Dominos pizza. As I hustled to grab a slice and see where the boxes landed, I heard what sounded like a wild riot at the top of the staircase.

“We’re going to bring down the banks!” “Bitcoin is all the currency we need.” It was a Mob scene! Not a scary one, unless a room full of a hundred computer geeks makes your heart skip a beat.

The Beginning of an Era

This was the beginning of blockchain. I abandoned the silence of my corner at the Plugnplay offices, where the likes of PayPal, Google, and other tech leaders started to enter the world of crypto mania. Not the mania of pump and dump ICO’s. This was long before that. It was the ideological mania of what these brilliant innovators already knew – the tech that was going to change the world had just arrived.

My Orwellian Experience

My first Orwellian experience in technology was not in 1984, rather in 1994, the year Netscape gave away the first browser. I was the founder of a large print graphics company, one of the largest in the western United States, and I had a clean graphics room financed by Kodak. I walked in one day, watching our graphics guy sitting behind a brand-new demo of the SGI machine. This was the first version graphics computer that ultimately made Pixar possible – the company that actually made Steve Jobs his first billion.

The Internet Emerges

I asked our team member, “what you up to?” He replied, “posting on the internet.” “Oh.  What’s the internet?” I asked. “It’s a computer network where you can post stuff, and have conversations, and work with other people,” he explained. “Work with who?” I thought. As if the 350 people we have around here aren’t enough? “Anyone” he replied.

“Why?” He’d just about had enough of me and what he clearly thought to be stupid questions. So, he shrugged and proceeded to take a graphics image of a print piece we were running for Samsonite. It showed up brilliantly on his screen, brilliant for 1994 screens that is.

He then went on to ask somebody a question about the graphic. To my amazement, an answer popped up! “Who’s that?” I said. “I dunno. I just wanted to know how to do something,” he said. I sat there for the next two hours, learning, talking, and finding out about this new thing called the Internet. In that moment, I knew the world had changed. I also knew that the multi-million-dollar building I was in, the Kodak clean room, the entire print graphics, and the mail industry were all over.

Blockchain Takes Form

When I went to describe this to my investors on Wall Street, I was thought to have lost my mind. Twenty years later, in 2014, I was met with the same issue. This time, I said to myself, I’m going to do this thing fully and no one is going to stop me. For me, it was never about BitCoin. It was always about this thing called “Blockchain.”

Just as newspapers folded or transformed into online media channels. Just as magazine ads fell and Google AdWords rose to the East Wall of search results, I knew that blockchain would do the same thing to every bank, contract, and transaction in the future.

Before Bezos put e-commerce into motion for books, and Google was still being called “BackScratch” back at Stanford, it was clear the world had changed. During those days we saw the ideology of “everything for free” and Google’s famous “Do No Evil” slogan. We also saw the fight for an unsustainable model on the Internet that culminated in the Dot.Com mania.

While the reality of the charge ahead formed the likes of Amazon, Apple, Google, Oracle, SAP, and Intel, it would give rise to new business models and ever more “crazy” ideas. Think SnapChat, Airbnb, and Uber, an era where messages disappear and people can actually travel without hotels and yellow taxis.

The Next ‘Internet’ Transformation

So, while the pundits continue to cry wolf on the fall of BitCoin, we’ll know better. Just how the “I told ya so” crowd of Dot.Com era fed off a frenzy of flowing cash, we too will monetize later on. And much like today’s biggest companies that continued to build, learn, deliver, and monetize throughout history, so too will the blockchain.

How am I so sure blockchain is the next “internet” transformation? Because while the ideologists scream “down with the banks” from the rooftops and the naysayers refer to the Tulip bubble (as coined by Jamie Dimon of JP Morgan), there is a more powerful force behind the scenes. It is the force of the quiet leaders making great strides behind the curtain. Here, we may find companies like HSBC and Standard Chartered Bank creating distributed ledgers to lead in the transformation.

In our BlockCerts Whitepaper back in 2017, I talked about how SWIFT, an organization that handles international banking transfers in the trillions, must change or die. Today, it has chosen the former and recently announced its move to the blockchain.

When it comes down to it, it’s never the hype that makes great strides in disruption or transformation.  It’s the hard work behind the scenes that emerges, once the hype has been bought and sold. This is the case for all of the ICO scams the SEC is now attacking.

Transcending Ideology

Reality is, you can be on the Amazon, Google, Facebook, and iTunes side of the equation with blockchain. By 2025 you could be saying, “I told you so” from the nest egg you’ve patiently acquired. Or, you could go outside and pick up your daily newspaper to catch up on world events (oh wait – those don’t exist anymore).

It won’t be what the geeks and ideologists started and imagined. It won’t be what the ICO’s pumped and dumped with 100-page whitepapers. It will be the new model of every transaction in the world, behind every contract and every agreement to protect integrity and drive trust and transparency. It will transform the law and banking and payments and accounting and real estate. It will even be the data that safely delivers autonomous cars from point A to point B.

That’s where blockchain is heading, behind every IoT device, AI for legal and medical platforms, and every global supply chain. It will have a business model. It will be distributed, and it will be both private and public. It will drive governments and laws. It will be, well, just like the Internet, only this time, a little bit better. It is evolution after all and I’m with Darwin on this one.

TimVasko.com, Founder BlockCerts.com

How We Win with Blockchain

January 16, 2019 12:50

How We Win with Blockchain

Thinking Two Steps Ahead

We have two “how we win” models at BlockCerts. For one, our technology is more sophisticated than eSignature services like DocuSign®, eFile services like Dropbox® and KYC vendors of our time. We are two steps ahead of them as well. Much like the way DocuSign® disrupted market share from FedEx® and the Post office or the way Dropbox® attacked the Manila folder, BlockCerts is here to disrupt the old way of doing things.

Making Crypto Even More Eye-Opening

We have a way better upside than speculation on a coin or figuring out which smart phone manufacturer will add the neatest new feature. It isn’t about a slick Madison Ave ad campaign to gain a little more market share, either. It’s bigger than that. Why? Because Crypto is eye-opening. It first became ‘cool’ when people began to see what Digital Currency can really do and how transformational the blockchain platform can be. Although, blockchain is (and was) a version 1, remaining geeky, hard to understand, and even harder to use.

The Next Big Disruption

We’ve put those drivers altogether and solved the problems along the way in order to deliver blockchain to the masses. BlockCerts is a live platform boasting real APPs and tools anyone can use in their daily work and business life. It makes business functions simpler, better, more secure and more cost-effective online.

Put it all together and you have the next big disruption. It’s what Microsoft did with email, Office and the Internet browser – making snail mail and fax machines, typewriters, and encyclopaedias ancient tools of the past. Because here at BlockCerts, it’s about next steps, and getting you and your business to that next level, faster.

What Are the Top 10 Benefits of the Blockchain Ledger?

October 15, 2018 14:16

Benefits of the Blockchain Ledger

Tim Vasko, Founder and CEO, BlockCerts

  1. Single source of truth: At any point in time, all parties will refer to the same data thanks to a single shared ledger.
  2. Early or preventative detection of human error: Since all parties need to give consensus, any human or application error will be caught early on in the chain.
  3. Security: Treachery by any of the parties will be immediately identified by comparing the ledger copies of the other parties.
  4. Disintermediation: Elimination of middlemen is one of the biggest benefits of the blockchain. It enables the contracting parties to reduce the overall cost and connect the payments and asset ownership/transfers directly between buyer and seller.
  5. Safety & transparency: The business and the customer (investor) can ensure that their agreements, assets and ownership are not compromised and are properly executed.
  6. Customer centric: Since blockchain provides the opportunity to connect the contract issuer directly with the customer; the issuer is able to provide a better customer experience.
  7. Regulatory compliance: Blockchain improves regulatory compliance through transparent audits.
  8. Legal transparency: Single source of truth ensures that all documents are authentic, with an 100% audit trail of all transaction steps.
  9. Automated execution: Terms are automatically monitored and adhered to by the smart contract, without need to monitor. Unless all parties mutually agree to modification, there will be no unilateral changes or actions that affect the agreed upon terms.
  10. Immediate payments: Payments are released on time, without banking hold-ups or intermediary issues.
  11. Cost savings: Significant cost savings offees, speed, and accuracy, data storage, and contract creation, third-party verifications – costs substantially reduced or eliminated.

Blockchain: Not When, but How

May 14, 2018 07:03

When it comes to the wide scale adoption Blockchain, it’s no longer a question of “if,” or even “when,” this will happen, it’s a matter of “how”.

How rapidly will the transformation occur? How will it impact me, my business, my life? How will it change current practices? How will I make use of Blockchain?

Eventually, everyone and everything will have to reckon with Blockchain. 
How can I be so sure?

It’s pretty simple. Zuckerberg testified to Congress about his company’s unethical use of users’ private data for political analysis. Equifax (which stores all of our sensitive financial information, whether we like it or not) let our information “slip” into the hands of hackers. Under Armour had a hack of health data accessed through their FitPro APP — 150 million users accounts were breached, although they managed to keep this pretty quiet. And let’s not forget about Target credit cards.

Tesla’s unfortunate event with self-driving cars crashing shows what hacking could do to innovations such as self-driving vehicles. While this wasn’t a hacking event, it certainly was demonstrative of what could happen to our highways and lives when data isn’t controlled or properly protected.

Events such as these, their frequency and impact, are what make me so certain about the future of Blockchain. Today, the data we share by necessity online, and through our technologies, is increasingly personal, sensitive, and thus, vulnerable. This applies to our personal lives and our work lives (which today are really one and the same as we work anytime, anywhere — navigating on our devices from APP to APP).

Blockchain was designed precisely to increase security and protection for all types of communications online — the first, model working “application” on blockchain was BitCoin. “Money talks” as the saying goes. BitCoin showed us we could create money, send money, trade money, without banks, or a central government. Once that was clear, and BitCoin started to gain traction, the behind-the-scenes technology behind it, Blockchain, that enabled the “cryptocurrency” started to be looked at by others as to how to protect sensitive data through every step of our lives and jorney’s online.

Blockchain provides transparency, and ensures authenticity. It can be used for storage. It can be used to tailor access and privacy, and so much more. There are billions being invested by some of the biggest names in business, technology, and governments world wide — exploring how to leverage this technology. Why ?

Perhaps what is most important thing about Blockchain is what it doesn’t do: centralize. Centralization, from government currency controls to storage of large swaths of personal data, is what makes our information, and people, so vulnerable online and off-line. Centralized power has proven to become mostly bureaucratic, monolithic, and at its worst corrupt. And this is precisely what Blockchain was designed to change, and why it’s being rapidly adopted in every industry, from banking to business, to privacy and insurance policies, to mobile devices and wearable technologies, healthcare to the food we eat. If you use technology, you will eventually use Blockchain. If you don’t think you use technology, you will — even if its a meal set on the table in front of you to source its origin through supply chain. Blockchain is a future that’s already begun.

The Internet changed the world in ways we could have never anticipated. In 1994, when Netscape offered the first free public browser, no matter how vast our imaginations were, we could have scarcely predicted the future dominance of mobile phones, apps, and social media. It is my conviction that Blockchain will have an equal, if not more profound, impact on our lives. I described the BlockCerts platform to my 85 year old Mom on mothers day. I know, great Son right (well she asked what I was working on :) Guess what — I told her how blockchain could safely stock her fridge right from Whole Foods through Amazon. Guess what, she got it ! She said, “its just like the Jetsons” !!

Today, with the history of the internet well entrenched, where toddlers to eight somethings can use tech, we can begin to anticipate how fundamental a shift Blockchain will be. The question is to figure out how to mobilize this shift for the good of the world, and the betterment of society. That starts with “distributed ledger networks”, and a host of other new jargon that surround the billions being spent on the millions of lines of blockchain programming code, that is making it happen.

This blog series will be focused on how Blockchain can positively impact not only our businesses and technology, but our lives and our responsibilities to one another. I imagine this series as a provocation for discussion. I want to hear back from you, the readers, so we can converse about how to use this technology for good. Blockchain presents an opportunity to shape our world, to build new communities, and to imagine new opportunities.

Please join me every Friday at 11am Pacific Time for my podcast, “Ask me Anything,” where I will present ideas and answer your questions about technology, Blockchain, and the internet.

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