Blockchain and the mathematical truth | Néstor Palao | TEDxMadrid

Decentralization of power, and the elimination of trust from the equation. A very attractive combination of factors for a millennial that does not believe in anything. Blockchain, the technology behind Bitcoin that makes its existence possible, also empowers a number of ideas for new business in all sectors.

Néstor Palao is a serial entrepreneur who began his journey around technology at only 14 years old. Two years later he founded his first start-up, Cardee, focused on creating a platform to make it easier for small businesses to build customer loyalty. At 17 he started Parkfy, being one of the pioneers in the collaborative economic revolution in Spain. Currently, he is in charge of business development for Stampery, a start-up based in the United States and Spain which aims to democratize the preventative defense of our creations and communications without depending on the trust of any centralized entity, bringing blockchain closer to anyone for the creation of immutable proofs of integrity and existence. Interested in the functioning of financial markets, art, and architecture, he seeks to understand the impact of digital products on citizens and how they relate to each other.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

Every 10 years, there is a revolution.

It seems contradictory
being able to predict

what the next radical
paradigm shift will be.

But during this latest era in technology

this revolution
has been proven to be true.

In the seventies,
computer circuits appeared,

which resulted in motherboards.

In the 80s, PCs, personal computers.

In the 90s, came the Internet.

In the 2000s, came social networks
as well as smartphones.

And this cyclic resource,
as we can see, repeats itself.

If my calculations are right,

looks it is time
for another great revolution.

Therefore, it is time
to ask ourselves the question:

What is the next major revolution?

The answer is: "blockchain."

Since the age of 14, I have undertaken
projects on the Internet,

using technology as a means
of expression and revolution.

For as long as I can remember, I've lived,
breathed, and loved technology.

I have seen the world change,

generations complain about the rate,

lack of values, and speed
with which the world grows.

I have seen the fall and destruction
of big corporations,

institutions, and the biggest skyscrapers.

Even everything we assumed
and took for granted.

I have seen it fall.

So, I want you to think and reconsider
that this start of the millennium

involves a real change
and a reality that's constantly evolving.

There comes a time
when we take for granted

that institutions are above us
and guarantee our rights,

but many times we see this is not true.

The topic I want to address
is related to this.

Blockchain.

It is a protocol
operating underneath Bitcoin,

the virtual currency all of you know.

But it has a major problem
known as double cost,

"double-spending."

Blockchain emerged
when it was created around 2006,

in response to this.

The issue is that something
that can be copied countless times,

as is the case of virtual currency,
is spent only once,

without there being any entity
or institution to control it.

Therefore, we ask ourselves:

Is it possible to eliminate institutions

that have created
so many reliability problems

and so much doubt in the past few years?

The answer is yes;
the answer is blockchain.

The reason lies in the way
the network is created.

Decentralization.

Blockchain is a global network,
formed by more than 80,000 computers,

growing at an incredible rate every day.

Computers of individuals
all around the world,

that in exchange for storing
a copy of the network,

receive a financial reward.

People in Japan, and in Spain,
anywhere in the world.

It works, and every 10 minutes
it saves a copy of the network.

Every 10 minutes,

giving it its name,

a new block is created, so to speak.

Hence the chain of blocks, "blockchain."

In those 10 minutes, every transaction
that is written in that block is stored,

calculating the balance

for every single person
inside the network.

It really works, let's say,
like a huge account book,

in which every single transaction
in the Bitcoin network is stored,

moving about 200 million USD every day.

This huge account book

paves the way for many
other pathways and innovations.

And it really makes us wonder
if our dependency

on big corporations and large institutions

is real and necessary.

We say that blockchain
works like the truth.

It is a huge database,
a large account book

in which anyone
anywhere around the world,

with Internet access only,
can write on it,

consulting it from any part of the world.

Everything written
within the blockchain is immutable,

it can never be deleted or edited.

How is this network immutable?
Or how can we ensure it is?

To date, no network had ever been created
with such a large number of members,

80,000 and growing, as I said.

If one member were destroyed,

tens of thousands of members
would continue to exist,

continuing to save the information,
therefore it is impossible to delete it.

At the same time, it paves the way for
the belief that immutable truth exists,

that it really is not necessary
to believe in institutions

for our daily processes
or to store our information.

Since we can replace [them]
and this decentralized network exists,

that allows us to replace
trust with mathematical truth.

At the same time,

in addition to opening up many avenues

in terms of thinking

if our procedures surrounding institutions
are the correct ones,

it paves the way and creates
a framework for many innovations

which are actually taking place
or being set into motion,

from the example we have here,
like certifying the industrial property

or intellectual property
of any type of creation.

Let's imagine a small-scale creator
who begins to produce music,

or a graphic designer,

he/she does not have the capacity
to go to a rights agency

or a notary to certify their work.

Blockchain solves this
at little to no cost,

proving that everything entered
cannot be deleted.

Once he/she proves and has precedent
over their work's existence,

their authorship cannot be questioned.

Another major problem
is money remittances.

For any immigrant in the room
to send money to their home country,

almost all the agencies
that serve as intermediaries

commit usury with the fees
they impose, which are close to 20%.

Bitcoin and blockchain can solve this

instantly and at no cost,
at marginal cost.

55% of the population
of sub-Saharan Africa

do not have ID documents,

which means they can't access
quality healthcare, their medical record,

or the education that they deserve.

Blockchain could solve this,

making their identity
available at all times

from anywhere in the world
without any documentation.

Searching for them within this network,
one would have their global identity.

Another very interesting
application of blockchain,

and this is an image
of a field in Honduras,

is the certification of ownership
and authorship of anything.

Earlier I raised the issue
of small-scale creators,

but also any type of contract,

or even, as in this case,
it is already being implemented,

in order to certify land ownership.

In places where governments

steal property of everything they can,

if they had a record of this
really happening and it is their property,

the problem would be solved
at marginal cost.

And another of the great solutions
that blockchain provides,

is the possibility
to keep track of everything.

From where the meat
in my hamburger comes from

to where the cotton
of my shirt comes from.

Which can involve
an application rather marginal

and not so necessary day-to-day.

But for the pharmaceutical industry,

it involves billion-dollar losses,
with counterfeit medicines,

a practice that is carried out every day,
rising to exorbitant figures every year.

Simply by having the source laboratory

introduce an identifier
for every package in blockchain,

and the doctor when giving it
to the patient verifying it is valid,

and the source laboratory entering it,

this problem could be solved.

One of the major applications

on which many banks
and entities are working,

is the creation of "smart contracts,"

which work like some conditional contracts

in which it is declared that if I do this,

by contract, this person will receive
this benefit or whatever is agreed upon.

They work like conditional contracts,
in which blockchain is an oracle.

We should think
of this network as an entity,

like when our ancestors discovered fire,

they didn't know it would mark
the end of an era and mean so much,

we are facing innovation
of great importance.

Many people at the academy compare it
as if a new Internet were emerging.

But applications are being found,

and innovations
are being developed around it

which can be very interesting
and solve many problems.

At the same time, it involves
the immutable and decentralized layer

the Internet has always dreamed of.

The Internet is a world full of barriers
in the background and very controlled.

Finding an application
and technological solution

that allows everything
to differ on the Internet

and that is really a channel
for knowledge and free expression

is the solution.

Therefore, let's eliminate trust
from the equation.

Thank you very much.

(Applause)