Nihat Arkan: Sure. Since the year 2000 despite the fact that my background is more on international finance, I dealt with the content, data related to the product. Nowadays, everybody knows that the world is driven by the data and that is what I deal with. But more on the consumer product side in the last 20 years. And the last two years after studying the so-called Blockchain phenomenon in Oxford during a little certification program, my interest shifted to Blockchain. I then got interested in combining the content management, data management, and the Blockchain.
So, I left my company in Leeds, UK and returned to Germany to establish a company dealing with content and Blockchain. That is what I have been doing almost close to two years now and we are serving to retail industry. But at the same time, we are dealing with the art industry, high end spirits, jewelry and many other industries. Providing them trusted content which is managed on the Blockchain.
Nihat Arkan: This is a perfect definition, Peter, because when I look at today’s world, how do people look at Blockchain? Everybody of course mixes it with cryptocurrencies like Bitcoin, and that is where it became very popular. Everyone now thinks Blockchain is a technology related to Bitcoin, but in reality, it existed even before Bitcoin. So, what we do and what the cryptocurrency is trying to do are two different stories, comparing to Blockchain and cryptocurrencies. And I have nothing to do with the crypto side.
Nihat Arkan: If you look at the Blockchain, please think of how in the past we had our own in-house data storage places. Over the time we started thinking that in house is too much of an effort and sometimes it does not serve the purpose because of the latency and all that, if you’re dealing at the global level. Then we started dealing with multiple data centers that are linked to each other. But that evolved, and then we moved into the cloud services.
So, the Blockchains came into the world to fill that gap, which is to provide 100% security. Even today, when you hear every single day that world’s largest entities from British Airways to Visa. They lose their content to hackers only because they keep the data in either the cloud or in data centers. But Blockchain will really provide the security. Whereas 99% of the time – there is always a chance – but 99% of the time the data that is important for the trade, for the individuals, even for governments and other entities, is secure. You use blocks that really make the whole data much more secure and much more reliable.
Nihat Arkan: Exactly, Peter. That is a perfect point. I do not know. Maybe I will give you one example. For instance, when you buy a very nice a bracelet for your wife. If you get that bracelet and put it in a safe and put that in another safe, and another safe and another safe. So, like you take 1,000 safes to protect your bracelet that you purchased for your wife.
If I am a burglar, a really bad meaning person, if I have a one hole in the first one second, third… As long as all the pearls of the bracelet are in the same place, eventually I will get to it. But if you take that pearl, give one to me, one to your dad, one to your mom, one to your girlfriend… In order for me to get all that bracelet, I have to go to all those houses and, at the same time, try to get as many as I can. It is not possible, and that is what the Blockchain provides. Distributing the information and different nudges and then all the nudges really having a certain protocol in each other, to communicate.
So even if I try to get the first pearl in the first block, everybody else will know that something is going wrong. And then prevent the data or the pearls to be distributed. That is the security and value that the Blockchain brings today to the normal businesses.
Nihat Arkan: It is a real concern. I think that is something that the new generation of Blockchain companies need to deal with. And it comes from the fact that in the Bitcoin, Peter, many of the blocks in order to get a Bitcoin, production needs to solve a problem. Meaning it is like the system comes up with a problem and the blocks need to solve it. Whoever solves it first creates that block to become part of the whole ecosystem. Problem solving requires a lot of effort and that effort consumes a lot of energy. And that is where this whole computation work and extra energy is required.
For instance, for our company, we are using a hyper ledger fabric, which is a private Blockchain and completely statement based. There is a statistical record of that like what we use for Bitcoin to create a block versus what we need for hyper ledger to create a block. It is almost one 20th to 25th of the energy needed. And the reason being is the problem solving versus the statement solving, the structure of the blocks. But that is one thing and in fact, even the Blockchain, there is a sincere effort. They are moving into a more energy consumption that is a structure. Moving into, for instance, colder countries like the Nordic countries, moving into the farms that you do not really need it too much air conditioning and so on.
There are a lot of things being done, but it is a real concern and the Blockchain community is very much aware of it. It is an absolute movement too, going into either renewable energy, cycle winds and so, rather than using electricity, or coal, or the fossil oil. There is a lot of movement trying to fix that problem.
Nihat Arkan: I wouldn’t say that it’s been to severe, but for sure it had some impact. What we sell in Yaliyomo is a Blockchain based solution that involves proving the authenticity of a product, like a Rolex watch, or Louis Vuitton bag, or to show the ownership. And then track the ownership of any given high value asset.
In such cases, in order to acquire such solution in the company, multiple departments are involved. Not just like the brands or marketing or the let us say technology or law department. Pretty much all the departments are involved because it is quite critical for the well-being of the brand. The more departments you have in decision involvement processes, the more difficulty you will have to bring them together during the covid. Because obviously they are not physically together and that takes time. In the past, for gaining a customer, it usually took 1-3 months. Now that is extended to 3-6 months, and obviously that impacts the revenue and as well as the bottom line.
So overall, it slowed down the adoption. But I am hopeful because we’re coming to a point that we realize that we may not be in the offices anytime soon. So, we need to make decisions for the well-being of the companies and therefore it is getting faster, but still it slowed down the adoption.
Nihat Arkan: Absolutely right. And in fact, when I look at it, even today, all the jobs opening and as well as even let us say going back to normal. Almost nine out of ten companies put in their recruitment processes – and you know this better than any of us, Peter – that remote working is allowed. That is now really known or accepted as a value add to any employee’s life, being able to work from home. And I think thanks to the corona pandemic that we all realize that that is possible.
Although in the past, even during my CEO time with various companies, there was always a statistical report that people who work from home, their output, their contribution to the company is no different, and in some cases better, than working in the office. But we never took that at face value. Even me myself as the CEO of global entities, never took that at face value. That yes, I would get efficiency from somebody who is staying at home. But the pandemic has proven to us that that is a fact. Therefore, more and more people are expecting to stay at home, and that becomes certainly differentiator in everything we offer.
Nihat Arkan: Not really. I mean it is usually adoption of any technology, Peter. You know this as well as I do, there is always a technology enthusiast which adopts the business or the technologies first. Then come the followers, and usually doubters come last. And in most cases, even if you know a technology without knowing how it applies to your business, you never add that to your profile.
But in Davos, the World Economic Forum in 2020, more than a year ago, everybody ranked Blockchain as one of the top technologies that will really and truly, and I believe in that, will change the way that we look at the technology. And how we interact within the companies, government, citizen relationship, even within the B-2-B side and for sure B-2-C side. Therefore I am not surprised. But it is coming. I really feel that while Blockchain is not mainstream yet, it maybe a year or two away, but I would say that in five years Blockchain will become part of our life. That 99% of time we don’t even know that we’re using that platform as the exchange of data.
Nihat Arkan: Just one thing, industry wise. Blockchain, unlike Bitcoin, is here to impact all the industries. Whereas Bitcoin is really going to be important for the finance industry and how we really look at value, exchange, or how we value certain things. But if I take the Blockchain out of the finance and Bitcoin of course out of the equation. Any industry that we can think of, for instance internet security, supply chain management, insurance, even the individual protection and then individual data, and sharing of data. The security of any type of data and protection of that data.
All the NGOs and how they deal with their constituencies. And then I look at the government and the government relationship with their citizens, and then comes to like any type of like the health-related services either in the private or the public sector. Energy consumption and energy management even as much as music, how we deal with the music, like the IPO of the music and licensing issues, and then comes to any type of real estate. In summary, almost all the industries eventually will have an impact on the Blockchain usage in a better way.
And to answer your question, Peter, that people who work in any of these industries, my recommendation would be to not be afraid of looking into the technology like Blockchain. Please look at Blockchain as more how you take, keep, and manage the data related to your business and then by doing that, what values do you bring to your constituency? Either to your suppliers, or to your consumers. And then look at that way. Therefore, my feeling is that it will be applying to any executive who is looking to take their business to the next level, absolutely needs to understand and start reviewing the Blockchain.
Nihat Arkan: Exactly. Exactly. Because it is inevitable. For instance, when the fax machine first came into our world, everybody just talks about who has the second to who was the first to take the first fax machine and Blockchain is not like that. I mean, we already passed that point but nevertheless, the people who really adopt the Blockchain in their industry and make it as a value add to their constituency are going to win.
Nihat Arkan: Perfect question. I definitely agree that the accelerated knowledge of the Blockchain would help. And today, prior to our call, Peter, I looked at the top 20 universities in the U.S., and at the global level, Cambridge and Oxford included. Almost all of them have online certification programs to understand the Blockchain. Some of them even offer the Blockchain strategies. And that I am just one that is a good example of it.
As soon as I studied that in Oxford, I immediately realized that there is a lot to do with Blockchain, even the industries that I thought we were the largest and biggest. And immediately, I quit my job and came and established a startup. And therefore, like you are right, there are lots of certification programs between 3-4 months. They provide a depth of understanding of not the technology but how you take the technology and apply it to your own business.
Nihat Arkan: In general, I think and then I look at a lot of executives that I had a pleasure of working with or helping. To give you an example, my previous CEO role. I had six direct reports. Four of them are CEOs today, and I am very proud of them and all of them are in the U.S. And when I looked at there are three things that come to mind if you really want to go through these executive ladders and to become maybe at this or come to c-level.
Number one is culture, which is any businesses that we are in. The culture of respecting the global different views is becoming a fact of life. And when I look at all of them, myself included, being more flexible towards the cultures and trying to adopt their expectations and create a management style that accommodates all in the environment is the key.
The third thing I would say is that we need to understand today that the technology is a real driver of many efficiencies that we deal with. We are talking about the Blockchain. I see Blockchain as a really a differentiator and bringing additional value efficiencies to our day-to-day business. Whereas we can take that time and adopt to do something better. So, culture, being flexible with the change and definitely adoption of technology will really help. This is how I see myself advance in my life and it comes to the career.
Nihat Arkan: What I have seen is that nobody should fear from the change. For instance, I moved in my career from Turkey to the U.S. to Japan, then Switzerland, then Germany, then the U. K. It is like we are living in a global village. People should not be worried about what will happen to my kids, my family, this and that. As long as the job excites you, I assure all of them, that things will work out well even with your family. The world is not that big and as you think that it is very big, it’s not. The culture, the working environment and the responsibilities. As long as you have your family together, things will work out well.
Peter Irish: That’s a wonderful closing comment. Thank you so much, Nihat, and wonderful success with Yaliyomo, and I look forward to our next chat.
Nihat Arkan: All the best, Peter. Thank you.
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