Blockchain will be part of our lives. Interview with Yorke Rhodes Head of Blockchain at Microsoft
Blockchain is either a word you have heard of, and ignored, because you are intimidated by technology and have no idea how it applies to your life OR it is something with which you are completely fascinated. Blockchain is actually related to the food you buy and eat, to the electricity that powers the device you are using to read this article, to the method of payment you will use to make purchases in the future, to investment options, and even to ways to confirm your identity and your degrees’ credentials. As you can see, there is nothing intimidating about blockchain and there is plenty of opportunities ahead. Aren’t you fascinated by this technology yet?
Yorke E. Rhodes III co-founded Blockchain Microsoft, and drives strategy across the company. He has worked in enterprises such as Microsoft & IBM and startups in wireless, mobile, digital marketing & e-commerce. At Goldman Sachs Investment Bank he built their first wireless internet ingress and advised bankers in wireless, telecom and media.
Kimberly Mantia, Impakter Editor-at-large, met privately with Rhodes during the 2018 Concordia Summit in New York during United Nations General Assembly.
Could blockchain have a positive impact on supply chains? Can you provide examples of how it could impact consumers’ life in the next couple of years?
YORKE RHODES: In the context of supply chains, blockchain could be used as a tool for consumers to determine whether the claims that a certain food is organic are true or not. There are statistics that tell you there is 30 % more organic food on stores’ shelves than has actually been produced. This means there is a fraud there.
Today, claims about food sources and its quality are very difficult to verify for consumers. For brands that want to provide verifiable records, using something like blockchain is an opportunity so that consumers will be able to directly look at the history and the source of their goods and track them all the way back to, for instance, a coffee farm in a remote region.
This is one area, I believe, we are going to see many applications that will have the qualities and the features enabled by blockchain, but consumers will not necessarily know that they are using it. It is an excellent opportunity, because consumers will not have to invest into something, but they will be getting a new set of features by using blockchain as a tool.
What about the application of blockchains in the context of the electric grid? The Australian Company Power Ledger shows how blockchain could have a positive impact. Do you think this model will spread more in the future?
YORKE RHODES: Specifically to electric grid there are actually two different ways that you could approach that: you can approach it from a retail perspective or you can approach it from a grid operations perspective.
I think it is in the nature of the energy market to become a decentralized production: things like solar are driving that and it is very aligned with the technology of blockchain which is by its nature decentralized as well. There are a lot of synergies in terms of what is happening in that particular industry and the use of blockchain technology and that will continue.
There will be other opportunities to use blockchain in this context, but this will depend on companies’ approach and their interest. In the energy space there are companies that are focused on the retail part of energy consumption, on monitoring and on payment. I don’t think blockchain will grow super-fast in those frameworks, because it is such a regulated market, but certainly from a grid perspective, it is ok.
Blockchain is necessary for cryptocurrencies. What are your thoughts about the fluctuation of Bitcoin and cryptocurrencies in general? Do you believe they are the future? When do you think they will be generally accepted?
YORKE RHODES: Cryptocurrencies are an extremely powerful invention but the concept of using cryptocurrencies like Bitcoin as a liquid payment vehicle is something that we have not seen happening yet. There is a reason for that: people are either holding on to it or using it for investment purposes. If we look at the volatility, it is just in the nature of something that is not that widely distributed in terms of volume and was also just brought the market. From a payment perspective, that is what creates a lot of issues.
From a technical perspective, there are technologies related to the core currencies like Bitcoin and Ethereum that are enabling more efficient payment vehicles including sidechains, channels, layer two, and lightning – for example – that will actually create the technical underpinning to make it possible.
Then, I think, the question will become: “What does payment mean?” “Is this a payment on the back-end of something?” “Is it a payment from a consumer for a purpose?”
I think the interesting potential impact is absolutely there because if you look at the percentage of millennials and other young people who invested in cryptocurrencies, it is actually a very high percentage of that population. For most of them, it could be the only type of investment that they’ve ever made. I spent a lot of time following trends and it is pretty easy to look at people in college and even younger as the trendsetters, whether it’s mobile phones or different types of social products throughout there. So certainly, that is a big tell about the future.
There has been a lot of debate between public blockchain, like Bitcoin and, Ethereum and private blockchain which is better or truly decentralized. What is Microsoft’s stance on this?
YORKE RHODES: Bitcoin and Ethereum are designed to work in a fully public environment where you don’t need to know the participants of the network and it runs like a public utility, which is actually a good thing. In most enterprise context – you can think back to the early days of the web – enterprises were very reticent to put their crown jewels, data, and services on a new technology until they were comfortable with that technology. Enterprises didn’t rush to this new thing called “the web” and “the browser” in 1995, just because it shifted to Windows 95 and it had a browser. Now they will not rush to put things on something that is unknown to them such as a public blockchain
The mission that we have regarding enterprises and blockchain is actually to get them comfortable with the technology so that they can then figure out how to use it for their purposes, their user cases, and their business. I think, we will see in the next couple of years hybrid environments incorporating both public and private blockchains into solutions.
If you look at the evolution of web, that’s exactly what happened, this is how enterprises actually adopt the technology. The only comment that I would make regarding this, is that the speed of innovation in this particular space is much more rapid than it was in the Internet revolution.
It is not going to take twenty years like the Internet, because we are now building on top of the foundation of knowledge of the power that the Internet gave corporations. If they can leverage public Internet technologies to advance their business, that is going to have a positive impact on their business. It is just a matter of how quickly they can understand this new technology so they could actually do the same thing – and this new technology is advancing much faster.
A couple of years ago, Microsoft partnered with ConsenSys and Blockstack Labs to create an identity system supported by blockchain. What was the outcome of that partnership? Do you see other ways blockchain can be used for social good purposes?
YORKE RHODES: Great question. It was actually early in my journey in Blockchain and I realized that there was an opportunity to apply blockchain technology – including the identity aspects of blockchain technology – in social good areas like: supply chains, undocumented workers, potentially trafficked people.
We started discussing in the community where there would be intersection points to that and what technologies would be useful. We actually did two things: first we created a technology foundation and an open source community focused on this type of identity product, it is called the Decentralized Identity Foundation, in which ConsenSys and Blockstack are boards and committees’ members as well. I think it now includes about fifty organizations working around that technology. There is also a great collaboration going on with W3C as well as ID2020 – this last one was focused on the humanitarian application of identity to solve the undocumented people’s problem in the world.
ID2020 which we were founding member as of January of this year – along with Accenture and the Rockefeller Foundation – is focused on taking this technology and actually putting it through user cases in the field so that we can actually start to realize how to apply it in the field and in the humanitarian sector. They just had their summit about a week ago and announced funding two different organizations, essentially giving them grants. Those organizations are going to run pilots in the field so that we can learn more about how that technology is evolving. Lastly, there is actually work going on inside Microsoft and our identity team, specifically focused on taking this type of identity and leveraging it in our technology stacks.
As we are talking about social blockchain and social good. How do you see blockchain being used in war zones like Syria or for emergency operations?
A place like Syria is not somewhere you can go now and apply the technology. If you had applied the technology, specifically this type of identity technology, and made it available to people in that community ten or fifteen years ago, individuals would have been able to own their identity and establish credentials associated with that identity, so that when they became displaced people and arrived on the shores of Greece, Italy or anywhere else, they could actually show up with an ability to retrieve credentials about their history.
It would have been an opportunity, instead of just putting people in a refugee camp, to actually have verifiable credentials that say for instance: “I was born in Syria” – not from somewhere else – “I have a PhD”, “I practice medicine in the hospital xyz”, and “I have completed these studies”. Instead of sitting in a camp, you could have had actually put qualified refugees to work in the host country right away because they had verifiable history about their life.
We think there is an opportunity for a systemic change regarding the issue of identity in the humanitarian space. I know that if we had done this better ten years ago, the outcome would have been very different. That is how I see it being applied, it is something that will have long term opportunities but it’s not going to happen overnight.
In a disaster scenario you could probably think of a lot of different options. I haven’t thought about disaster response necessarily as a user case for something like blockchain, but one area where we see benefits is in the context of UN agencies. When UN agencies assist in disaster situations they go into countries or regions and there are often coordination problems.
Agencies don’t communicate well and there is a lot of wasted time and resource just associated with coordination or lack of coordination in a scenario where you could have actually solved some of that before getting on the ground. It has a lot to do with some of the foundational elements like identity and being able to quickly identify who is an aid recipient on the ground, and making sure that the recipient is getting what is needed – not more or less than what the recipient needs.