XRPL Commons President David Bchiri: Education is a Prerequisite to Enterprise Blockchain Adoption
David Berlind, the host of the Blockchain Journal Podcast, interviews David Bchiri, President of XRPL Commons, an independent non-profit organization that helps to drive the success of the XRP ecosystem (XRP is the native protocol token of the Ripple distributed ledger). During the interview, conducted at the Consensus 2023 Conference in Austin, Bchiri explains that XRPL Commons is working towards the support and education of four organization types — "pillars" as he calls them — to drive interest and adoption; universities, large organizations, startups, and the community. In the blockchain industry, "community" is a standard one-word reference to the collection of individuals — developers, enthusiasts, adherents, retail investors, fans, etc — who, in aggregate typically represent a huge base of support for a given distributed ledger's ecosystem. XRPL Commons aims to be at the crossroads of these four pillars with dedicated educational programs for each.
As Berlind points out during the interview, blockchain as a technology faces various obstacles when it comes to adoption by enterprises and other large organizations (one of Bchiri's four organizational pillars). Among the challenges is a complete lack of familiarity with blockchain technology among business executives. Most of what those executives see are the unflattering cryptocurrency headlines in the mainstream media. Bchiri agreed, saying that the solution from the XRPL Commons' perspective is to invite those executives to XRPL Commons-organized briefings where they can learn about the true value of blockchain technology and how it can unlock new opportunities in their specific industries.
Bchiri echos some key blockchain messages having to do with the erosion of corporate trust and the role that decentralized public ledgers — systems and records with which malfeasant or incompetent organizational personnel cannot tamper — can play. Whereas centralized systems leave open the opportunity for manipulation of information by one or a handful of people who are in charge of them, Bchiri pointed out that blockchain creates complete auditability and permanence of data that cannot be changed and therefore offers enterprises an opportunity to restore the trust which has been eroding over time.
By David BerlindPublished:May 3, 2023
David Berlind: Today is April 27th, 2023. I'm David Berlind, the host of the Blockchain Journal Podcast. I'm coming to you from Austin, Texas, where right now the Consensus 2023 Conference is taking place. The whole city has been taken over by this conference, there's a convention center next door to where I am right now, lots of exhibitors, [and] lots of people who are interested in blockchain and cryptocurrency. But today, I'm standing with David Bchiri, David is the President of the XRPL Commons, which is an organization that's related to XRP and Ripple. So David, thank you very much for joining me on the show.
David Bchiri: Thank you for having me. Well, just to complete on what you just said, we're a completely independent non-profit organization, we're not tied to the XRP or Ripple.
Berlind: Okay, so you're not tied to them, but...
Bchiri: We're exactly in the same ecosystem. We're trying to get more adoption to the XRP ledger. We're working together as partners, but it was important to me to mention we were completely independent. And what we're doing is working on four pillars to get the XRP ledger to its next stage. The four pillars being: working with universities, working with large organizations and public institutions, working with startups, and working with the community itself. We're trying to be at the crossroad[s] of these four pillars, and we have dedicated programs for each of them.
Berlind: When you were on stage a little earlier speaking at the fireside chat with David Schwartz, who is the CTO of Ripple, he talked about those segments and he talked about corporations. Blockchain Journal is really about the enterprise and corporations and [the] adoption of blockchain in that category, and there is a lot of headwind, I would say, in the adoption of blockchain for enterprises. Many obstacles. One of those obstacles, because you were talking a little bit about education, is just the complete lack of familiarity about anything having to do with blockchain in the enterprise. You talk to a CIO, or IT director, or a CFO, because blockchain, of course, would concern the CFO as well, the only thing they know about blockchain is what they read in the headlines, and what's in the headlines these days is not very flattering. What has to be done to reverse that trend?
Bchiri: You're absolutely right, I think there's been so much noise in the space that the real message hasn't gone through. What we're doing is trying to raise awareness and bring education to top executives in large corporations so they can understand what kind of value blockchain can unlock for their specific industries. To do that, we invite them for what we call an executive briefing, where in less than two hours, we walk them through all the value that blockchain can unlock in their specific industry.
Let's take fashion, for instance. Right now, fashion is big on using Web3 for marketing and creating customer loyalty programs. But there's so much more that blockchain can do in supply chain factories, in secondhand markets, [and] in retail. But if you walk them through the whole value chain of their own industry, they understand, perfectly, what kind of value they can unlock with it. And so, the conversation becomes more, how can we do it? What kind of project do we have to launch to do it? Is there anyone else who's doing it in our industry? Because corporations are used to, go by, is there a leader in that space? Can we do the same? We don't want to be outpaced in terms of innovation.
Berlind: Nobody wants to be Ubered, or Amazoned, because that happened before, many existing executives watched that movie where some new technology, be it mobile cloud, whatever, surfaced, then some innovator came along, took advantage of that, and completely disrupted an entire industry. But when you're doing these two-hour briefings, which by the way, two hours doesn't seem like enough time to share everything that needs to be shared to convince an executive, one of the big questions that I get, as the editor-in-chief of Blockchain Journal is, "Well, why can't I just do this with a database? I'm already marketing. I've got a customer loyalty program. I'm engaging with my other stakeholders in the supply chain, and partners, already through systems that I've built. Why do I need blockchain for this?" How do you deal with that question?
Bchiri: We usually start with what I think is a fact now, we're entering the crisis of trust, so anything that's centralized, whether it's a database, it's a system, anything that centralized can be changed, if you know the one person who is in charge of that.
When you talk about supply chain, for instance, what blockchain does is it creates complete auditability and permanence of data. When you use the centralized blockchain, data can be changed, if you know that one person in the organization who is in charge of that. If you build your trust on the fact that you cannot change the data and it's auditable, then you are sure then five years from now, you won't be facing public media or a scandal about lying to your customers. And as a CEO of a company you don't want to lie to your customer, you want to be true to them. That's a way to prevent that kind of trust issues [from] happening in the future.
Berlind: Do organizations actually lie to their customers? Has that ever happened? And that's kind of a sarcastic question.
Bchiri: I would say sometimes they do it without even knowing they're doing it. Sometimes errors will happen and they're trying to hide it, if it's hideable. That's taking a leap of faith, using a blockchain or a decentralized ledger, it's taking a leap of faith that down the line you will be able to say that you did everything in good faith, in an open way.
Berlind: It was sort of a rhetorical question because if we look back through history, even if you just go to the website of the US Securities and Exchange Commission, you'll find press releases about all the companies they're fining for doing essentially malicious things, and they get fined for that. We know there's a history of big corporations that we placed our faith in, Wells Fargo, [and] Equifax, maybe not all of it was malicious, maybe it was just pure incompetence. But at the end of the day, I think you're right, that when one central party has control over the data, there's the opportunity for some form of abuse that eventually breaks the trust, and as you pointed out, gets that brand mentioned in the headlines, which is not necessarily in the interest of all the stakeholders in that brand, whether it's stockholders, employees, or customers.
Bchiri: Exactly. A board of executives knows that. They know that they don't have control over everything so if they can delegate to systems that will enforce trust, that will maintain trust. I think they take that as an upside for them.
Berlind: But there has to be a special group of stakeholders that get it, because some of the people I've spoken to say, "No, you can trust us. We're not going to change the data. It'll be auditable. We'll make it available to everybody. We're trustworthy." Which, of course, history proves that some percentage of us are not trustworthy, but doesn't it take the right stakeholder, you have to come across that right board member or chief executive officer who gets it and says, "You know what? We need to engender trust." And I just don't, in my experience, I don't think enough of those exist, do they?
Bchiri: They are open to the conversation, and we mainly talk to C-levels, because if I take the situation backwards, how we drive adoption and how we bring more developers to the community, it's by providing them opportunities to build. And developers don't wake up in the morning and say, "Oh, I'm going to build this or that." They are in an environment where they're waiting for orders or opportunities to build. So in a large organization, the projects come when they're green-lighted by the whole executive chain. If you start with the C-level, then it cascades down the organization, and blockchain is not something no one wants to hear about anymore. And then you get to the technical people who are already aware of what blockchain is, a lot of people in the IT organization are already educated about blockchain, or they know about blockchain more than what you would think, but they're waiting for the green light from the top executives to go on with their projects. If we want to reach the developers, if we want to bring more developers, we have to create opportunities for them, that starts with the C-level.
Berlind: How do you get them past the other problem, which is when you tell them, "Oh, this is a public chain. It's all public."? That freaks a lot of C-level people out.
Bchiri: You have to also explain the difference between being public and having all your data available to everyone. Blockchain can be public, but the data can be anonymized, it can be encrypted. You decide, basically, the data you want to expose. But the fact that the data is here, and maybe a third part can be the auditor, doesn't have to be everyone who's able to audit it. It means you put it in place, a chain of trust that the great audience can trust will be revealed later on. But that's mainly about putting in place this chain of trust.
Berlind: You mentioned NFTs earlier, and that seems to be where a lot of enterprises are sort of dipping their toe in the blockchain water, and there's a recipe for doing that. There's some other use cases, of course, the recipes are more complicated and there aren't many recipes out there, but you see a lot of brands, Starbucks, L'Oreal — many brands that are doing NFTs as a form of customer engagement. Do you recommend that as that first, here's a good way to pry it out and not get too deep into something, and then maybe once you've tried it out and you got a good taste of how it works, move on to something a little more complicated?
Bchiri: NFTs for marketing and customer loyalty is a great way to create instant value. It's a short-term program or a short-term project internally. There are a bunch of providers, [and] suppliers who are able to help you with that. It's not too complicated, you don't have to rethink the whole infrastructure. It's just an add-on to what you're already doing as a brand. It's a great way to start.
But I think the value of NFTs lies in [the] management of intellectual property. How do you manage your brand? How do you manage patents, for instance? On the XRP ledger, there's a platform named XRP Stamp that allows you to notarize any document using the blockchain. Being able to provide clarity about who's in ownership of a document, who was the first person to come up with an ID, patents are very localized. If you own a brand, you have to own the brand in all the countries where the brand operates. If you go through a blockchain solution, maybe that's another way to make it more efficient, cross border, without having to engage with so many third parties.
Berlind: On NFTs, or on any technology, a lot of time with enterprises, they're all coming from Web 2.0, and especially when you have B2C companies, they're dealing with customers, you see a huge amount of hesitance to try to go all the way to Web 3.0 because to onboard their customers to something that's fully Web 3.0, the wallets and all that, that just seems like too much friction for an enterprise to go all the way from Web 2 to Web 3. Do you help them out in that middle area? Some people call it Web 2.5, where it's kind of like a Web 2.0 front end on top of something where blockchain's underneath?
Bchiri: I would say we're agnostic. We will take any institution or corporation that wants to work with us, and if they're already open to working with NFTs, we'll help them find the right people in our ecosystem to work with them. But you mentioned some companies are reluctant to tackle the innovation part because that's a lot of investment for them, or that's a big leap of faith they have to take, and there might be a backlash. They don't know how their audience will react, [or] how their customers will react. If you launch a project, then none of your customers have a wallet, then you have to convince all your customers to adopt it first. I don't think that's the job of the brands to do that.
What I think is attractive to these brands, the ones that are on 2.5 let's say, is that they're in direct contact with their customers. With a decentralized approach to marketing, you don't have a third party who owns your customer database or your audience. When you open a Facebook page as a brand, you still have to pay Facebook for putting out your advertisement and keeping your reach high. When you have an audience that relies on decentralized infrastructure, then you can be in touch with them directly. That's very appealing to brands, and they understand that very well. They see that at — sort of a new media — where they own the media, or they provide the media, and their audience comes to them directly.
Berlind: Okay. Well, David Bchiri, President of the XRPL Commons, thank you very much for joining us on the Blockchain Journal Podcast.
Bchiri: Thank you for having me. Appreciate it.