Thursday, Sep 29, 2022 • 21min
6. How To Navigate Blockchain, With Professor Francesco Grossetti
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Francesco Grossetti is a Professor of Blockchain and Big Data for Business Decisions at Bocconi University.
Today we're focusing on blockchain by talking with an expert who understands how complicated yet fascinating fields such as DeFi, data management systems, and cryptography can intersect.
This is for any listener who would like to pursue a career in the budding world of crypto, has a passion for learning about new technologies, or who simply doesn't want to get scammed.
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Talking about
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(4)
Francesco Grossetti
Virginia Stagni
Alicia
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Transcript
Verified
Francesco Grossetti
00:00
I would say that to succeed in this space you really need to be exposed to different subjects and to different topics.
Share
Virginia Stagni
00:14
This is The Talent Show, a new podcast series from
FT
Talent, a hub of innovation from the Financial Times
hosted by under thirties for the under-thirties around the world. This first series is in partnership with Bocconi University
, a leading higher education institution of business and managerial advancements. I'm Virginia Stagni and this is the guide you need to drive innovation and change.Share
00:43
Today we're focusing on
blockchain
by talking with an expert who understands how complicated yet fascinating fields such as DeFi, data management systems, and cryptography can intersect. This is for any listener who would like to pursue a career in the budding world of crypto, has a passion for learning about new technologies, or who simply doesn't want to get scammed.Share
01:04
Here is our conversation with Francesco Grossetti, professor of
blockchain
and Big Data for Business Decisions at Bocconi University,
Share
01:16
Ciao Francesco. How are you today?
Share
Francesco Grossetti
01:17
I'm very great. I'm doing just fine. Thanks for having me.
Share
Virginia Stagni
01:20
It's our pleasure and we cannot wait to hear from you about your area of expertise, your tips for early career professionals, students that might be interested in your field.
Share
01:31
So Francesco, the first question is about the definition, what does it mean. the
blockchain
technology? We know that normally it's connected with the cryptocurrencies, but also unfortunately with the black side of it, that is scams.Share
01:45
I would like you to walk us through the
blockchain
technology. What does it mean? What it is all about.Share
01:51
Over to you Francesco.
Share
Francesco Grossetti
01:53
Well, first of all, that's a very fair question, but it's also very complicated one.
Share
01:58
I would say that to the very core
blockchain
technology is basically a system of interconnected computers, I would say, which stores different data, which we call transactions.Share
02:12
And the specialty of these types of systems is that each and every computer is not only interconnected, but each and every computer can actually verify that all the information that we put on the system that we call
"blockchain"
is indeed correct.Share
02:28
And there are no sort of logical errors within the information that we put in the system.
Share
02:34
So overall, it's almost like having different ledgers that record each and every transaction all linked together via a public network like the internet for example.
Share
Virginia Stagni
02:45
Thank you so much Francesco for this. Why you entered in this space? What makes you excited about the
blockchain
technology? Why you are researching this field and why you build your expertise all around it?Share
Francesco Grossetti
02:58
Right, so I started working on
blockchain
technology around five years ago when I was a postdoc. One of the things that really makes this technology stand out compared to others is that there's huge potential and what we can do, not just in terms of business applications, but really anything that there is related to our common society.Share
03:20
Now we can spend time thinking about what kind of applications we can envision or we can visualise for our future. Clearly one of the main application that we can think about these days is just trading of assets. So you can think about sending money to, you know, from a buyer or seller to you on these types of systems.
Share
03:39
And let me say that, just because you mentioned that before, yes, there is
cryptocurrency
involved in these systems and what's really important to understand is that blockchain
is the technology that enables cryptocurrencies but cryptocurrencies is just one of the possible outcomes and potential usage of this technology.Share
04:00
I can refer to things like provenance of, I don't know, of goods for example or tracking of medical records being shared, not just across a country but also across different countries, so being able to access patients record very easily and very securely in just in almost real time.
Share
04:21
Those are the things that we should be probably talking about more with respect to standard trading in
cryptocurrencies
.Share
Virginia Stagni
04:27
Of course, and I think it's really interesting what you're mentioning about data and how we intertwined it is with the world of data management, data privacy and so on. We've seen the development of also this field from a career perspective.
Share
04:40
I would be interested on this part for our our audience that is mainly younger career professionals around the world that might be interested in the
blockchain
technology might have experienced, it might have tested it and I want to build a career around it, what is your suggestion?Share
04:54
But I think that's one first point, I'd love to have your view and then secondly, is it really needed to have a technological background? What's your view on that?
Share
Francesco Grossetti
05:04
So again, this is another tough question but very interesting because I get to answer to this type of question basically to all my students that take my course.
Share
05:13
The answer is not super easy, but I would say that yes, there are definitely lots of, you know, possibilities for young people to be onboard future careers with this technology.
Share
05:27
I actually have students that switched path along the way after taking the course and interacted with some of the people that are actually working on these, in this space and they opted in to go, you know, full time, you know,
blockchain
experts / developers / entrepreneurs.Share
05:47
As for your second question about skills, the skill set that, you know, would be ideal to have in order to start a career in this space. It's a big questionmark.
Share
05:57
I have students that have different backgrounds coming from computer science, but I also have students coming from management for example, so they know very little about how to run codes or develop codes and stuff.
Share
06:09
I would say that to succeed in these space, you really need to be exposed to different subjects and two different topics related to both the development of, let's say more geeky things like codes and
smart contracts
, but also you have to clearly understand how the business works and the reason why I'm saying this is because this basically leads to your initial question about or comment about scams.Share
06:38
There is a lot of issues and concerns about what people actually do within the systems and so being able to have enough knowledge about what you're gonna do next in this type of systems is really, really important,
Share
Virginia Stagni
06:52
Francesco, this point is really interesting, but I would still like to ask you: the people that you've seen maybe from a finance and management background that came into your course and then now I think quite recently are looking at a career growth in the
blockchain
space. Do you have any example that you can share with us of career paths that you found interesting and intriguing from your alumni network?Share
Francesco Grossetti
07:16
Well, so I have a couple of examples. One is not from the alumni network, so I have a friend of mine who is acting as a guest speaker in one of my lectures and he's actually a developer. He's Head of Engineering at one of these
blockchain
based companies.Share
07:31
It's a hedge fund company and he is a drop out of computer science, so one messages and I don't want to sound too bad about this, but really I have and I'm working with people that are actually dropouts out of college and they were able to succeed pretty dramatically in this space.
Share
07:50
On the other side, I do have a couple of alumni who were hired just recently by one of these startups based in
Switzerland
. They are now working full time as either hedge fund managers or blockchain
developers in Switzerland
.Share
08:06
So I would say, you know, you have lots of different cases.
Share
Virginia Stagni
08:11
You just mentioned
Switzerland
and I cannot avoid thinking about finance and the banking system from a traditional standpoint. And of course if I connected with blockchain
, I think most of our listeners are definitely gonna realise it's connected with the concept of decentralised the finance.Share
08:29
With this internalisation, decentralised finance offers basically financial instruments without relying on the traditional business. This can be banks, workers, etcetera. It's something that, you know, we talk about quite a lot here at the
FT
.Share
08:43
From your perspective, what are the opportunities in this space and also what we should be careful about when we are entering in this? Of course, you know, I believe full of opportunities when it comes to investments, but also full of scams. What is your view on that and let's walk step by step into this very complicated world?
Share
Francesco Grossetti
09:07
Right! This is really, really, really hard. I'll try to be as coincides as possible. So let's try to start very quickly about spending two cents on what is DeFi or decentralised finance.
Share
09:21
So you can think about DeFi as, you know, financial operations, but instead of taking place in standard systems that we all know because we've probably been using those systems in the past, they only took place and they're are only eligible when they take place in decentralised systems.
Share
09:41
Of course, a
decentralised system
is the blockchain
, clearly, and so you can only sort of work on, DeFi and interact with these types of things once you are fully on board a blockchain
system.Share
09:53
Now, what you can do, you know, with these protocols: well there are several things that you can do. I would say the easiest thing that you can think about doing would be just borrowing money, borrowing / lending money to, I don't know, another individual for example or two a firm potentially.
Share
10:10
There are other things that you cannot do within the context of standard financial systems which are called flash loans for example. The flash loan is an example of something that is really, really complicated to understand and grasp, but it's basically the ability of asking money, meaning borrowing money, doing something with that money you just borrowed and then repay the debt in just one single transaction occurring on the
blockchain
.Share
10:37
So of course I'm referring to the concept of
smart contracts
which really plays a major role in today's distributed system. So again, it is not just about cryptocurrency
, it is about something that's way wider than just exchanging tokens. So I would say that this is just to give you a scratch to the surface of what you can do.Share
10:59
On the other side, as we all mentioned before, you have to be really smart to be on board of the systems and you have to really know what you want to do and what the potentials of the technology and the procedures you're using are and what are the rules of the game basically.
Share
11:19
So again, there are people that are investing in making a lot of money. There are many more people that are trying to invest pretending to make more money, they're not and they're actually incurring huge losses.
Share
Virginia Stagni
11:31
Do you need to have a techy background to better understand how
blockchain
works or is just a tool, is just a different platform where you can enable some of the bit more traditional financial mechanisms that you see in Wall Street
?Share
Francesco Grossetti
11:45
Well, I will answer with a very simple statement. Knowledge makes you rich, you can find rich whichever way you want but I truly believe and stand behind the statement, so the more knowledge you have the better.
Share
11:58
So if the question is, you know, would you need some kind of technical background to better grasp how this technology works? My answer is yes, of course. Do you need to be a computer scientist to understand or I don't know like a cryptographer to understand how the whole system works. Of course not.
Share
12:15
Would it be better to have some kind of understanding along these lines? I would say most definitely, yes, and the reason being that it is true, as you were saying before, there is a huge barrier at the entry point when you want to deal and interact with these types of systems and so knowing how they work and how they function and what the rules are, which can be very different and very unexpected compares into traditional systems, I think that really pays off.
Share
12:42
At least this is what I see also with my students, they really want to understand and know what's behind buzzwords, like
smart contracts
and just to be clear, smart contracts
is not smart at all, they're just automated by computers.Share
Virginia Stagni
12:58
In one sentence, any other advice you would really care to share with younger people thinking about a career involving
blockchain
?Share
Francesco Grossetti
13:07
I would say the following. If you wake up in the morning and one of the first things that you can think about is, let me just say
blockchain
in general or I don't know, be an entrepreneur in the context of blockchain
.Share
13:23
And then this sort of thought keeps you, you know, poking throughout the day and throughout the days and throughout the weeks and then you're attending courses, for example, here at
Bocconi
, which you know, talk about completely different things and you're still thinking about, you know, that kind of initial thought, that is a good trigger, that something is really, you know, is really in you. And so that would be the initial step for you to take action and do something about it.Share
13:60
Otherwise the thought would just, you know, linger there over and over again and then it will bother you and I don't like to be bothered by my own thoughts, I usually, you know, listen to them and I usually try to support my thoughts and by providing answers and in my case the way I do this is to you know write papers, scientific papers. In the case of a young, 20 years, you know, years old student that is willing to be in this world as an entrepreneur means to go in the field and start something for real.
Share
Virginia Stagni
14:40
A very pragmatic and proactive approach. Study, read but at the same time take actions and if you have a lingering thought about a specific piece of technology or something that you think you can innovate, improve or I think there is definitely space in the
blockchain
technology for innovations, maybe that's a good step and a good journey to start off your entrepreneurial career, so thank you so much for this.Share
15:06
What makes this show a bit different is that you have challengers questions, so younger students, early career professionals coming to the show to ask to our experts, their own questions. So for you, Francesco, we have two challengers Alicia and Jerzy that do have these questions for you. Alicia, go ahead.
Share
Alicia
15:29
Hello, my name is Alicia. I was a participant of the Financial Time Challenge in 2022 I'm more than happy to explore
blockchain
technologies with Professor Francesco Grossetti in this amazing podcast. I am Punjabi and as I was born in Italy but currently living in South Korea, I consider myself as a citizen of the world I'm currently in my last year of university and then conducting research for my thesis in Seoul.Share
15:54
And so my question to Professor Francesco Grossetti is: how will the rise and increasing market share of
blockchain
technology affect social media platforms business models as decentralisation in data ownership will take over centralised systems? How can the right to be forgotten be enforced within such a digital market based on immutability and interoperability? Thank you so much for sharing, looking forward to hear from you.Share
Francesco Grossetti
16:20
Thanks Alicia, these are very interesting questions and I think these are very central questions when we talk about new technologies, particularly
blockchain
.Share
16:29
So I want to mention something that is again, another trending word on Google, which is
Web3
. Web3
ideally should be a way for us to basically possess our own data that are spreading all across the internet again. And this is something that is slightly different with respect to the standard web that we have today.Share
16:52
And so to answer your question about, you know, how
blockchain
technology will affect social media platforms: I think that they will have to be really, really on board if something that like Web3
will actually kick in and will be something for real, you know, would be something that we can interact with on a daily basis.Share
17:14
As far as I am concerned these days there's no such thing, so when you interact with social media you are basically pledging to them and say okay, I trust you as an entity and I, whatever I do on your platform at the end of the day will be stored in your own servers and there's nothing I can do about it.
Share
17:34
Do I like this? No, I don't like it and I would really like to have a way to regulate and interact with, you know, everything I do on the web including data that is basically given to these platforms, which basically leads the second part of your question which is related to the right to be forgotten.
Share
17:56
So I'm not sure I can provide a full answer to that because if we talk about distributed systems in the form of
blockchain
, it is true that they are immutable. So once you add any bit of information to them you can't just really get rid of it.Share
18:12
I mean you can get rid of it, but if you scroll down the history of all the transactions you will see the initial bit of information being there. So I think we'll have, it's a technological problem, it's a technological challenge which we need to overcome and I think that if we all work in such a way to have shared systems which are regulated all across the board then we will be able to have again, things like the right to be forgotten in such a way that it really works and it does not stay in the hands of big players that are on the web.
Share
Virginia Stagni
18:49
Thank you so much Francesco. The second question is from Jerzy.
Share
Jerzy
18:53
Hello, my name is Jerzy. I participated in the 2021 edition of the
Financial Times
Talent Challenge. I'm from Warsaw but currently living and studying in Milan. I spent the past two years pursuing my bachelor's degree at Bocconi University
.Share
19:07
My question to Professor Francesco Grossetti is the following: given its potential for superior security, what are the possible future implementations of
blockchain
that will disrupt our everyday life? Thanks and looking forward to hearing from you soon.Share
Francesco Grossetti
19:20
Thanks Jerzy for the question. There are different routes that you can go when you think about future implementations of
blockchain
. For sure, there are two things that pop in my head.Share
19:32
One is superior security as you mentioned. Yes, it is true that the
blockchain
systems are secure and so ideally if you enforce their usage, sort of common practices, then you can really think about having very secure systems that are basically unbridgeable or it would take like an infinite amount of time to bridge them, so you wouldn't do that.Share
19:54
And the second thing is very linked to the first one. Once you have very secure systems, you can think about entrusting them if you want with very sensitive data. So I mentioned in the conversation before the patient records, so everything that is related to health record of your own being, your family and friends and so on.
Share
20:13
You can think about having systems that provide full coverage of all your medical history, all across the board and cross country also with, you know, with the ability of being within a very secure system.
Share
Virginia Stagni
20:27
Francesco Grossetti, thank you very much for being with us. We can't wait actually to hear all the feedback that our listeners are going to give about this very intriguing episode about
blockchain
technology.Share
20:40
I hope you learned as much as I did. Thanks to Francesco's expertise and insight. Tune into the next episodes coming out in a few days. Thank you again, Francesco for being with us and thank you to
Bocconi University
.Share
Francesco Grossetti
21:21
This was amazing. Thank you all.
Share
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Francesco Grossetti
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