- Time and Date: 13:00-16:00, Monday, October 7, 2019 (Registration starts at 12:30)
- Venue: NIKKEI Hall (1-3-7, Otemachi, Chiyoda-ku, Tokyo)
- Host: Research Institute of Economy, Trade and Industry (RIETI)
The appearance of Libra, a cryptocurrency developed by Facebook, foreshadows many significant changes for society through the development and utilization of blockchain technologies going forward. Blockchain allows data to be safely and securely transferred by registering data in digital ledgers. Like conventional ledgers, the data is made permanent and immutable. While cryptocurrency receives the most coverage in media as a use of blockchain technology, there is a vast range of uses for the technology such as governing and managing various forms of business and transactions in areas ranging from healthcare to preference data analysis. It is believed to have the potential to have a greater impact on society than the internet did as an infrastructure in fostering and developing new industries. However, on the other hand, there are growing concerns about data hoarding by large global companies and possible disrupting effects on national monetary policies. In this symposium, we would like to discuss different ways blockchain technologies could be used to foster next-generation industries.
NAKAJIMA Atsushi (Chairman, RIETI)
Against the backdrop of the so-called "Fourth Industrial Revolution," we have seen progress in artificial intelligence (AI), big data utilization, and blockchain. Blockchain technologies that enable business-related data transactions are in the process of evolution as an infrastructure to foster new industries. They are applied and used not only in financial services such as virtual currencies, but in broader areas such as health data. There are concerns as well that global platforms could use blockchain technologies to hoard personal data or impede monetary policies of sovereign nations.
RIETI is a think tank for evidence-based policy recommendations based on theoretical and empirical research. Under this mission, we have conducted research on the potential for and challenges facing blockchain technologies and we have just published a book on our research outcomes titled, Next Blockchain. That is the reason for this symposium.
Today, Dr. YANO, the President of RIETI, who served as chair for our blockchain study group, will discuss the research findings. We also have the pleasure of listening to a lecture by Mr. VOGELSTELLER, who is a developer and thought leader in blockchain technology, followed by a panel discussion of leading experts. I hope you enjoy our discussion on blockchain. I am confident that we will be sharing with you the latest and most useful information on blockchain.
Special Remarks 1
HIRAI Takuya (Former Minister in charge of IT, Science and Technology Policy)
Good afternoon, ladies and gentlemen. I am the Former Minister in charge of information technology (IT), Science and Technology Policy of the Japanese government. It is truly wondrous to have this Next Blockchain symposium hosted by RIETI today. Thank you very much for inviting me to present this greeting.
At the time that I stepped down as the Minister in charge of IT, I made some remarks. I would like to reiterate some of those remarks. The title of Minister in charge of IT does not sufficiently address the needs of the future. Digitalization, will have to bring benefits to all of the citizens in Japan and the world. A holistic policy would is required and a minister would have to be appointed for that holistic IT policy.
I was first elected as a member of the Diet in 2001. In 2001, basic IT policy was adopted for the first time in the Japanese government. I have been involved in IT policy since that time. Six years ago, I and the other members of Diet, adopted a security policy for IT and we also we conducted public-private policy promotion under my leadership. The government submitted digitalization policy and succeeded in adopting the policy. There is in fact a lot of legislation being made, and yet Japan, for some reason, actually is somewhat lacking in promoting digitalization or IT compared to other advanced countries.
With this in mind, it is important to fully recognize that the efforts we made were too focused on simple digitalization. Using the terminology of digitalization alone is not enough, because digitalization and digital information are changing society. Analogue TV broadcasting was replaced by digital broadcasting and we simplistically believed that it was a part of digitalization, but that is not the case. You have to convert the fundamental business processes that lie in digitalization. Success in capturing this opportunity will largely dictate your success in digitalization in the future.
Today, RIETI is hosting the Blockchain Symposium. Facebook is developing Libra and they are adhering to financial inclusion as a concept. With that entry, I think that the overall picture in the world has now evolved to some degree. I hope that society will be able to embrace this and benefit from the digitalization of society. That is a requirement for digitalization. We have already adopted the cryptocurrency law and revised the Financial Instruments and Exchange Act. We have changed legislation on an as-needed basis. With these advances in particular and subsequent to the revision of the Financial Instruments and Exchange Act, security token offerings (STO) are going to become increasingly implemented.
From that point of view, I have a request and also some suggestions to the people who are influential in this area. I have prepared a new policy, as the Minister in charge of IT, Science and Technology Policy, which aims to create clusters to improve the start-up ecosystem. That is already being implemented and in fact, in spring, next year, we will conduct an open call for possible start-ups within the municipalities participating in this program. Start-ups are scattered across Japan as a whole, therefore we need clusters to improve their chances at success. STOs could be useful for start-ups, for example as seed money or venture capital to bridge funding gaps. I am confident that STOs could be very beneficial for start-ups. I am sure that the relevant parties will design and create the best systems possible for start-up ecosystem clusters, and I hope that STOs will be fully utilized to lay the foundations of success for such an initiative.
I know that society will evolve going forward, but Japan will see the situation where over 50% of its population will consist of people aged over 65 years old. It is an extreme example of an aging society. Therefore, there will be more problems that are unforeseeable, but we need to overcome such challenges to society by implementing very proactive policy. That is our mission. If we are successful, then other countries who are set to face similar challenges in the near future can benefit greatly from Japan's experience.
We are very delighted to have such a fantastic roster of speakers, from both inside and outside of Japan at this symposium. The reformation of Japan should not be conducted by Japanese people alone. I believe that we need to rely on researchers, experts, and all kinds of people around the world and their expertise, knowledge, wisdom, and to benefit from the outcomes of their research where possible. We need to forge stronger connections with people outside of Japan to help us in this regard. I hope that all of the stakeholders will be able to step forward and offer help in the form of their capabilities. We would like to create an environment for that to happen.
When I go back to Diet – I am serving as a member of the Liberal Democratic Party ruling party's IT Revolution Committee. At a press conference at 2:00 p.m., this afternoon, we will announce our decision to formulate a new committee. The committee will expand our focus beyond simple IT to include the promotion of total digitalization. Under the main body of the committee, there will be a sub-committee for fintech, shared economy, digital IDs, such as the "My Number" system used in Japan, and so forth. Like I mentioned in the last press conference, being the Minister in charge of IT, we need to fully prepare and try to make right decisions being members of the ruling party.
I think the timing of this symposium is perfect to take advantage of the current momentum. I am looking forward to the earliest possible public implementation of this technology. We at the Diet, are ready to help you to proceed with that. I sincerely hope that the symposium today is very fruitful. Thank you very much for your kind attention.
Special Remarks 2
NISHIYAMA Keita (Director-General, Commerce and Information Policy Bureau, METI / Consulting Fellow, RIETI)
Emerging technologies such as AI, quantum computing and blockchain are bringing about global and significant change to the society itself.
One example of such change, can be observed in the area of safety inspection. The typical method to secure the safety of a system in a conventional society, is a visual confirmation by a licensed engineer. However, with the development of new technology, the physical inspection by a licensed engineer can be substituted by collecting and examining real time data, and the safety of a system can be updated automatically without human intervention. Nearly every existing regulations can be transformed in this way, and we name a future that has realized this transformation as "Society 5.0."
There was similar discussion in the beginning of 20th century that technology will bring about significant changes to our society. At that time, automation was progressing rapidly with the wide spread of electricity. The discussion was focused on "whether all things can be calculated," spearheaded by Kurt GÖDEL's "Incompleteness Theorems" and Alan TURING's "Computability Theory." One of the biggest issue of the discussion was, the famous debate by Oskar LANGE and Friedrich HAYEK on whether the society becomes centralized or decentralized.
The same discussions are revived today due to new technologies such as AI and blochain, but with more reality. Based on these new technologies, we have to come up with a vision on how to design our next society.
I believe that this Symposium is as suitable as any, to have a global exchange of view on these issues. I hope this this symposium will serve as a trigger to foster the discussions that will follow.
Special Remarks 3
HIRANO (Pina) Yoichiro (Chairman, Blockchain Collaborative Consortium)
Clashes in Hong Kong, Brexit in the UK, and conflict between the U.S. and China all indicate that the framework of boundaries between nation-states is the root cause of many clashes in the world. With Bitcoin, the progenitor of blockchain, there is no concept of a nation-state. Around the world, anyone can connect and exchange value freely. Today's event is titled "Next Blockchain." Thinking about the next blockchain means not just thinking about the next technology nor industry, but also the next nation-state as well. We need to create new values beyond the boundaries of nation-states. This way, the true value of blockchain can be harnessed by society. Some people presume that blockchain is equal to cryptocurrency and maybe a lot of people misunderstand its complete value. In the middle of the 1990s when the first commercialized internet was launched, we all complained that it was too slow or not functional enough. Many people did not quite believe in the internet. Since then, the internet has evolved and actually became something that is indispensable and which has transformed business around the world in fundamental ways. In the same way, we should not judge blockchain based only on its current state. There are many new things to come, as was the case with the internet.
Keynote Speech 1
YANO Makoto (President and CRO, RIETI)
Digital Data: The third factor of production
Today, there is a lot of focus on digital data. In addition to labor and capital, many people think that digital data will become the third factor of production. Google, Amazon, Facebook, and other large companies have been quite successful. Why is it that those companies are so highly valued? I believe, and many would agree, that the value comes not just from their public products but from data. Data has become increasingly important and now has industrial value.
Blockchain technologies were originally developed to produce virtual currencies. However, one of the most important functions is, I believe, blockchain makes it possible to assign each piece of data to a unique owner. This opens up the possibility for data to be used efficiently and fairly.
Why is data ownership so important? It is because many "data titans" have been born, and many more are expected to be born. In other words, monopolization and abuse of data have started to occur. The Economist talks about taming these "data titans," and we need to think about this issue. Many Western newspapers, such as The Guardian, frequently have similar articles. Some people hope that blockchain is a way to tame these "data titans."
What is Blockchain?
Blockchain is a digital ledger that is immutable and tamper-resistant, meaning that data also can be immutable. This gives industrial value to data. Modern bank deposits are nothing more than digital data. They have value only because they are immutable and tamper-resistant. Banks manage their data (or deposits) centrally. However, that is very costly. A large amount of money is spent by banks to manage data on deposits. Blockchain technology can significantly reduce these management costs. This is because blockchain can decentralize the management to many independent people.
The ability to decentralize systems is where many people have high hopes for blockchain. According to the Science and Technology Basic Plan, integrating cyberspace and physical space will enable a comfortable, healthy, and high-quality life. It is clear from articles pertaining to "data titans" that not every company can be trusted to deliver this vision. Blockchain could provide a method of advancing this new world of Society 5.0 safely.
How can we achieve Society 5.0?
We need to link new technologies to people's daily lives. If that is done, blockchain will bring large value. However, technology alone cannot accomplish this. We need to have an ecosystem in which technology and social institutions are integrated with daily lives. To use data efficiently and fairly, safe data ownership methodologies, methods of transacting data, an appropriate institutional framework and people who understand the ecosystem are all necessary.
I hope that this symposium will enhance our understanding of the first step towards building such an ecosystem. Together with technical experts from outside Japan, we need to focus on new technologies and the industrialization of these new technologies, as well as the type of ecosystem that will be necessary to underpin the applications of these new technologies. We also have to look at the future of digital data with blockchain as a key technology. Today, I hope that we will be able to discuss the type of future we are going to usher in with these new technologies, including blockchain.
Keynote Speech 2
Fabian VOGELSTELLER (Founder and Chief Architect at LUKSO, Ethereum Developer and Author of ERC-20)
When we think about blockchain, everybody probably thinks about Bitcoin. Bitcoin started in 2009 and it allows global economies to transfer value without a middleman. This is something conventional banking infrastructure could not achieve. This is the first time that we have a global economy based on a common infrastructure. It also introduced the concept of decentralization, which allows for economic exchanges without the need of trust.
The Ethereum Blockchain
In 2015, this whole technology was in a way upgraded with the introduction of the Ethereum blockchain. This new blockchain not only allowed the exchange of value around a blockchain, but it allowed for the programming of smart contracts. These programs have the same properties as Bitcoin which means that whatever you install or interact with can be verified globally without a central authority.
One thing the Ethereum blockchain and smart contracts allow is something called composability. Composability means that anybody can build other systems on top of the main system and others can do the same on top of systems others built. In other words, it is an open economic infrastructure where everybody can build economic systems which can interact. That is one of the reasons for the explosion around tokens we have seen on Ethereum. In fact, roughly 86% of all blockchain development is either on Ethereum or Ethereum-related technologies. It is the de facto standard when it comes to programmable blockchains and it is the most active blockchain in the world right now.
An Internet of Blockchains
We would all like to have one single blockchain that everyone could use. With such a blockchain, we would be able to not only transfer value, but any kind of ownership like transfers of property etc. However, this is not likely anytime soon because blockchains do not have unlimited scalability. Therefore, I proposed the idea of an internet of blockchains. Instead of having one super blockchain, we have one common protocol. The closest thing to a common protocol that we have so far is the Ethereum Virtual Machine (EVM) and Ethereum Web Assembly (eWASM).
Most smart contracts today run in the Blockchains using the EVM but many are not on the Ethereum main network. The internet of blockchains, as I see it happening in the next few years, is an internet of blockchains running similar protocols, but with dedicated networks for dedicated communities or industries.
Currently, if we think about the enterprise world, most people think about private blockchains. However, with blockchain, you ideally want to have many different players. That is exactly where blockchain is the strongest. There are reasons to build private blockchains between different enterprises, but for the most part, blockchains are most successful as public blockchains. These are blockchains driven by the public and are publicly verifiable and therefore trustable. They allow anybody to join and build decentralized applications on top of this infrastructure.
We are currently seeing the development of new dedicated blockchains built for specific purposes or communities. These public blockchains are creating the next wave of big value concentration. Those are not platforms, but ecosystems. They are not isolated, as they can be connected either directly or through something called umbrella networks. This is an internet of blockchains.
The Benefits of an Internet of Blockchains
The reason we want to have separate networks is scalability and synergies. Blockchains have limits and in fact, the Ethereum blockchain is almost at 80%-90% of its capacity. We do need to spread over many more blockchains. A blockchain can benefit from communities and synergies which result in global standards that are agreed upon by all.
One thing that is very important to understand, is that every blockchain that runs in a public setting and has no single party to run it, requires a cryptocurrency. Without one, a network would stop functioning immediately because there would be no incentive for anyone to run and secure this blockchain system. The ecosystem's cryptocurrency not only captures the value and attracts participants to the blockchain, but it actually benefits everybody by creating security.
With a separate blockchain ecosystem, you can incentivize everyone to be a stakeholder along the growth path of the ecosystem. If you have a common infrastructure and you are able to distribute the shares of that network to everyone, then you can create growth and create strong traction. The characteristics of these blockchain ecosystems make them closer to the economy of a country than that of a company. We are now on the transition from platforms to (blockchain) ecosystems.
Keynote Speech 3
Steven PU (Founder & CEO, Taraxa.io)
Today, the number of connected devices is increasing and they are becoming more and more embedded in our daily lives and businesses. There are 2 main pain points which blockchain is particularly suited to addressing, one short term and one long term. The short term problem is that for business models to succeed, businesses need to be able to trust the data these connected devices are producing. Blockchains can help with this. The long term problem is that if we stick with today's centralized governance structures, we will run into problems with scalability and security as well. Blockchain's decentralized infrastructure is ideal in addressing this problem.
What can Blockchain do for IoT Devices?
Blockchain has the potential to give IoT devices unique identities and to allow IoT devices themselves to have the concept of asset ownership and be able to conduct transactions. This is a critical capability required for devices to be able to make economic decisions. This is necessary for autonomous device ecosystems to scale and become more secure. In the end, these properties will make devices independent and self-reliant.
Before going into the applications of blockchain technology, it is important to know that decentralized systems are not here to replace centralized systems. They are here to make centralized systems more efficient, honest, and secure.
Applications of Blockchain Technology
First, trusted devices enable fair business models. We are working with an arcade renting business in Japan. They had no way of knowing exactly how much money their machines were making. What we did was build a wireless module that plugs into the machines that reports how much each machine is earning and sends the data to a cloud. To make the data trustworthy, while the data is generated and uploaded to the cloud, the data is anchored onto a blockchain. It essentially puts a cryptographic signature on it. This process guarantees two things: that the data came from a specific machine and that the data was not tampered with. This establishes a basis of trust between the lessor and the lessee.
Second-open standards to encourage collaboration. As technology becomes more complex, so do projects which involve collaboration among many partners in various countries within global supply chains. How do you coordinate the flow of information? You could build a centralized enterprise resource planning (ERP) system and force everybody around the supply chain to get on your system, but today, there is a very good chance your suppliers do business with other companies in addition to you. It is inefficient for them to install and maintain many different systems for their different partners. Instead of a proprietary standard, you could develop an open standard. That way, everyone in the supply chain faces the same problems. Instead of having one very large and difficult problem, you turn it into many smaller and easier problems. Every entity can decide to develop their own data standards and anchor them onto the blockchain.
Third, decentralized permission and certifications enable data democratization. We are working with a large automotive original equipment manufacturer (OEM) on democratizing mobility data. We have lots of centralized data-driven business models that work well today, but at the same time we see a lot of regulatory pressure and negative public sentiment with data leaks and security breaches, so aggregation business models may not necessarily work well in the future. We need to think about how to make our business models more future-proof for the next generation.
Fourth, "coopertition" through open standards. This is a term I made which means collaboration between competitors. We are working with one of the largest parking lot operators in Japan and one of the things we have seen is that the parking lot management business is very fragmented. There are many players managing many kinds of parking lots. It is a two-sided market with a lack of synchronization. You could create a centralized platform where all the data is synchronized, but it would not work because this is a situation where a group of competitors refuse to collaborate.
What we could do instead is deploy parking sensors into the parking lots which can track which parking lot is occupied, for how long, and when. That data can then be anchored onto the blockchain. It is not a centralized platform so they can join or quit anytime they want. That way, even as competitors, they have a safe way to collaborate collectively, creating a much better experience for both the demand side and the supply side.
As we progress through new technologies and markets, we are continuously looking for archetypical business models where we can address problems with blockchain technology.
Panel Discussion: "IoT and Data Marketplace"
- KATO Sei (Group Manager, Advanced Electronics Development Dept. No. 1, Connected Advanced Development Div., Connected Company, TOYOTA Motor Corporation)
- KISHIMOTO Yoshio (Senior Director General, Organization for Small & Medium Enterprises and Regional Innovation, JAPAN)
- MATSUSHIMA Michiaki (Editor in Chief, WIRED JAPAN)
- William METCALFE (Co-founder, Curvegrid)
- Steven PU (Founder & CEO, Taraxa.io)
- Fabian VOGELSTELLER (Founder and Chief Architect at LUKSO, Ethereum Developer and Author of ERC 20)
- YANO Makoto (President and CRO, RIETI)
- Chris DAI (CEO, LONGHASH Japan & RECIKA)
The first question is how can we create a data market. The first issue that needs to be addressed in answering this question is of course data ownership. How do we set the ownership of data? The second problem is tokens. How much should we regulate them? The legal issues related to this topic are also complex and deal with information privacy and ownership, so an appropriate legislative framework needs to be developed, but this is still in the nascent stage. Therefore, we have to make sure that regulation will not delay the evolution of technology, and at the same time ensure security and a high level of trust.
The second series of questions relate to autonomous driving. Through autonomous driving or perhaps other services, cars will collect all kinds of data, more so than mobile phones. It will be a great contribution to society and there are so many possible applications for data produced by vehicles.
The third point is the question of how the protocol layer will be enriched in the next blockchain. Blockchain algorithms are essentially divided into 3 layers. The top layer governs the crypto assets, the second layer handles the applications that use these assets and the third layer, the protocol layer, is the platform.. Although the Ethereum blockchain is the most-used protocol in the world, we are in the transition stage where various protocol layers will improve themselves, using the experience gained with the Ethereum blockchain. We are still in the midst of development of the protocol layer. As it grows and develops, we need to ensure the security and safety of the protocol layers. All stakeholders in the blockchain space need to think about this area.
The fourth question today relates to the expectations for Japan. Among our population, how many people are versed in blockchain? The number of people who are interested in blockchain is actually very small. Despite that, we have quite a good number of engineers and the market is quite attractive. The whole world is looking for Japan to develop blockchain, so I hope we can have a fruitful discussion.
Introductions of Blockchain Interest
We have panelists with many different backgrounds. What brought you to be engaged in blockchain?
I was in the business of publishing books and came across the book, Blockchain Revolution.
Working for Toyota Motor Corporation, I try to learn about what other companies are doing. About two years ago, a German car company launched a specific service using blockchain technology, so I started to study blockchain.
I thought decentralized autonomous organization (DAO) was really fascinating and revolutionary, so I started a company to work in the industry.
I thought decentralization was a necessity for human civilization to move forward and blockchain technology was the only technology that could do that. That is what made me very excited about blockchain.
I have a software programming and design background and I came in touch with blockchain in 2013 when I heard a Canadian wanted to sell his house in Bitcoin. I thought it was interesting. A year later, I was fortunate enough to join the Ethereum Foundation.
I have a 19-year-old son who has been fascinated by a game called, League of Legends. I started to learn about the game so I could talk with him and found it quite exciting. The game uses virtual currency and the structure was very much similar to the structure of blockchain. I decided to write a book and thought I should look into decentralized systems.
MATSUSHIMA Michiaki (Editor in Chief, WIRED JAPAN)
I joined WIRED in June last year and I am the Editor in Chief. We have published four editions including "New Economy," "Digital Well-Being," and "Mirror World." There are three major platforms for communication covered in WIRED. The first is digital information and the internet, and the second covers human relationships which have recently largely been digitalized through social networking services (SNS), the third major platform is the "mirror world." Everything which has not been digitalized, will be digitalized, and the physical world itself will be replicated in this third platform. I believe this "mirror world" is strongly linked to blockchain. With virtual reality (VR), you can go into a different virtual world, but with augmented reality (AR), the virtual world and physical world overlap. This is the "mirror world." With this, you can overlay additional layers of information.
Architect Keisuke TOYODA talked about the notion of common ground. The idea relates to the progress in creating a digitalized world that is overlaid on top of the real one. The overlapping area in between the two worlds is the common ground that TOYODA talks about. He said the key or major challenge to build a third platform is to understand to what extent a common ground is possible. Tom Kawada, a key figure in the development of AR, talked about different stages of "mirror world" progress. Currently, in 2019, we have seen about 15% progress. With 50% progress, we will have smart appliances and IoT. When it reaches 100%, the whole city will have a "mirror world." For example, you will be able to bring Kiyomizu Temple into your own garden and enjoy the view, or you could watch a sports games in the middle of Shibuya Crossing. With this "mirror world" platform, civilization can be stored as a digital twin and can be utilized if, for example, climate change devastates the world. These are all still theoretical, but this is the vision that we have for the future.
At WIRED we say that technology precedes culture. We need to be able to think what ideologies and philosophies will apply to these technologies.
KATO Sei (Group Manager, Advanced Electronics Development Dept. No. 1, Connected Advanced Development Div., Connected Company, TOYOTA Motor Corporation)
We are currently in the middle of the Fourth Industrial Revolution. When you think about the global competitiveness, Japan needs a strategy to survive this Fourth Industrial Revolution.
There are three categories of emerging data-driven business. They are augmenting core products, data-driven solutions, and ecosystem orchestration. For these to work, a centralized system is required, but the recent trend is towards distributed models. In all areas, distributed models are being provided as a service by start-ups. In the automotive industry, there are some applications that could fully utilize blockchains. It is not completely blockchain-based, but the data market is evolving as we speak.
Supply chain and traceability are the possible areas where blockchain could be fully utilized. For example, with the automotive data market, a car company or individual might provide data and a buyer could negotiate the price for the data. Blockchain can serve as the foundation for this transaction and provide viability but it is not straightforward. Scalability needs to be ensured, but as of now, blockchain's scalability is somewhat limited. How well this type of business will grow is another question. We are not really seeing the development of such a market. We are just looking to the future and preparing for it.
One problem that we need to think about is data ownership. If we provide data to Google, Apple, Facebook, and Amazon (GAFA) and we provide data to an automotive company, who should own the data? The COASE theorem helps in considering this problem. It does not provide a solution to this problem, but it does tell us that the ownership has to be well-defined. Once the ownership is clearly established, a value transaction can occur at minimum.
As for the future of blockchain, a token-based economy is something that we expect to happen. In addition, data democratization and distributed data exchange will serve as the marketplace. Related to that, mobility-as-a-service (MaaS) and other technologies will be involved so that Society 5.0 can ultimately be realized.
From an economic and social perspective, do you see a need for decentralization in society?
Today, data is in the hands of large companies and people are concerned. For example, we had the Cambridge Analytica incident. To prevent things like this we need decentralized data.
What problems can blockchain technology solve?
Blockchain works well when you have multiple parties collaborating that do not necessarily trust each other. Right now, many companies cannot get loans or support because there is no trust. Blockchain has the potential to solve this.
Do you think the circumstances in Japan will help the development of blockchain there?
I think so. Japan's regulations are clearer than in other countries. Moreover, Japan looks at cryptocurrency more as an opportunity than a potential danger.
What do you think Japan will need to lead the world in blockchain?
Beyond simple financial regulation, Japan should position blockchain as part of its industrial policies so that people can experiment with these new technologies.
In what way should Japan work with other countries?
The upcoming World Expo 2025 could be an opportunity to connect different industries and to come up with a vision for the future. Since Japan does not have many "tech giants" in the IT industry, Japan has no option but to work with players outside Japan.
We would like to see faster response time to changes. It takes time to implement things in Japan. Speed is necessary in capturing new sources of value.
What is your view on Facebook's Libra?
I personally think that having global money as a token that is representative of actual assets held in a fund in the real world is a great idea because it would allow us to create a stable coin or digital cryptocurrency. It is somewhat decentralized, but the future potential of a programmable money that can also be swapped for other currencies basically makes money fluid which will be an incredible benefit.
I have some concerns because it seems that Libra is set to be simply a kind of banking on a private blockchain. I believe decentralization is going to be the key.
We have never had this type of asset before. I think this is a very interesting application where the asset is a reflection of a real-world asset and I think it has a lot of potential.
KANO Yuzo (Representative Director, Japan Blockchain Association)
Blockchain is characterized by several aspects such as immutability and Byzantine Fault Tolerance (BFT). In addition, there is no single point of failure. The internet allows for the instant access to and transfer of data, but that data can be copied or replicated and so using it involves risk . Blockchain is called the internet of value, and with blockchain, copying or replicating value is impossible, so value can be transferred safely and freely. Confidence in data also increases with blockchain. Since the safe transfer of value is available, it can be applied to stocks and securities. This means that all assets of value can be safely transferred using a blockchain and this is not limited to stocks or bonds.. In addition, the unit of transfer could as small as a single yen per data transaction, so micropayments become possible and feasible with blockchain. Furthermore, without central control, transactions involving both data and users gain a new value of trustworthiness. With blockchain, a world with safe, guaranteed transactions can be achieved. Therefore, blockchain is not just about money or cryptocurrency, but it is applicable to all kinds of data.
Recently, I think blockchain has earned a place in the minds and hearts of people. That is what it has accomplished. In Japan, we are in the first year of a new era, the Reiwa Era. Therefore, we would like to make great progress in research and development and create momentum for blockchain and blockchain-related technologies. Thank you very much for your kind attention and for joining this symposium.