Ripple Interviews Author Kevin Werbach
In a recent article on Ripple Insights, the team interviewed the Professor of Legal Studies and Business Ethics at the Wharton School of the University of Pennsylvania and author, Kevin Werbach, on his book, The Blockchain and the New Architecture of Trust.
Ripple would be featuring Werbach on its ‘Expert Views’ panel discussion as well. Moving on to the questions and answers, here’s the first pair:
“Team Ripple: Can you preview any key takeaways from your new book, The Blockchain and the New Architecture of Trust?
Werbach: Blockchain isn’t an alternative to trust; it’s a new form of trust that tries to remove dependence on specific entities. For cryptocurrencies and blockchain-based systems to reach their potential, they themselves must be trustworthy. And that means much more than the formal security of consensus on a distributed ledger. We need to examine more closely what kinds of problems blockchain can address, and the trust landscapes of those domains. And, counter-intuitively for some, law will largely be a force that helps the blockchain ecosystem. Law, regulation and governance are mechanisms of trust. We need to look at how they can be employed to promote trust in blockchain-based solutions, and how blockchain and legal trust interact.”
Moving on to the next question-answer pair:
“Team Ripple: Did you encounter use cases that are more ideal than others for digital assets blockchain technology?
Werbach: Certainly! I start one chapter of my book by talking about the Whoppercoin — an ICO that was essentially just a loyalty point system for Burger King customers in Russia. There was no reason whatsoever why a blockchain was needed. It was all probably a humorous marketing campaign, but the scary thing was that, during the boom last year, you really couldn’t tell. In general, you always need to ask, “Is this a real and substantial problem to be solved,” and “why won’t a traditional technology solve the problem just as well, if not better?” The best use cases are ones where either the cost of trust (typically in the form of layers or intermediaries) is a problem, or where there is a “trust gap” among coordinating entities. The first explains most cryptocurrency or digital asset uses, while the second represents the enterprise applications. Payments, where Ripple is active, have aspects of both.”
Another one was:
“Team Ripple: Where do you see the most traction in using digital assets and blockchain technology to solve real problems in business today?
Werbach: As I wrote on Medium over the summer, I see three largely separate uses emerging. The first is cryptocurrencies. There the low hanging fruit is clearly payments, where there are serious inefficiencies moving money between silos and jurisdiction, as well as financial inclusion opportunities where we’re starting to see adoption. Down the road, cryptocurrencies will be the foundation for decentralized applications. Those have tremendous potential, but aren’t yet ready for prime time. The second use is distributed ledgers for tracking assets, or what I call translucent collaboration. This is particularly important in financial services and in supply chain, where there are multi-trillion dollar problems because no on has a unified view across the entire system. Second-order features like provenance (such as Walmart’s system to track leafy greens for food safety and Eveledger’s work in the diamond industry) as well as trade finance, where massive capital could be unlocked, are quickly coming into play. And finally, there is regulated cryptoasset trading, through security token offering and crypto-derivatives. The prospect of a secure, programmable, native-digital token that represents assets or intangibles is a Wall Street dream, which that community is racing to turn into a reality.”