2 - Nedzo Fetahovic: If it’s not on chain, I don’t trust it - Blockchain, Cybersecurity, AI, NFTs & Crypto

In this episode, we sit down with Nedzo a senior cybersecurity consultant with more than six years of experience in the financial sector. Nedzo shares his journey into blockchain technology, starting with his initial exposure to Satoshi Nakamoto's foundational papers. We discuss the potential of blockchain as the 'new internet,' its key features like decentralization and tamper-proof databases and its synergy with AI. Nedzo explains the misconceptions about blockchain, highlights its cybersecurity benefits and envisions its future impact on the financial sector, AI and the broader tech landscape. He also touches on the nature of NFTs and their potential beyond gaming. Concluding with practical advice for those interested in blockchain, Nedzo emphasizes on the importance of keeping an open mind and the convergence of emerging technologies.

Our Guest:

Linkedin:  https://www.linkedin.com/in/nedzo-f-77800a218/

Nedzos Book on Crypto: https://www.amazon.com/Das-Krypto-Manifesto-differenzielles-Wissen/dp/B0C87KK9HX?asin=B0C9SBMDRR&revisionId=&format=4&depth=1

https://www.kryptokrates.com/author/nedzo/

25 Minutes Podcast

Hostey by: Eliel Mulumba

Audio editing & mastering: Michael Lauderez

Join conversation on LinkedIn: www.linkedin.com/in/eliel-mulumba-133919147

Chapters

• 0:00 Nedzo intro and background
• 1:58 Discovering Blockchain
• 2:22 Blockchain's impact and milestones
• 4:16 Explaining Blockchain basics
• 5:15 Blockchain use cases in financial services
• 8:06 Misconceptions about Blockchain
• 11:58 Cybersecurity and Blockchain
• 19:38 Future of Blockchain and NFTs
• 21:34 Conclusion and final thoughts

Transcript

 Welcome to 25 minutes and thank you so much for finding time. You're a cybersecurity consultant, senior consultant working in the industry for more than six years, focusing mainly on financial institutions. We know each other for a very, very, very long time. And I know that you're someone who's really focusing on blockchain and how actually the value chain for financial institution can be secured.

In a more innovative and modern world. And I'm very happy to have you today as a guest on our show and to discuss about your career journey. Let's discuss about blockchain. When was the first time that you heard about this and what was the impact of blockchain for your professional journey?

I highly appreciate it for the intro, Eliel. So it's also an honor for me to appear on your podcast. back to your question, Eliel when I got in touch in, so with blockchain difficult to say, I, as I am auto didact I never had a clear roadmap. I just had. One vision. So I want to work on systems that are tamper proof and also work in a decentralized fashion.

Also that scale. today I see also blockchain as a means to an end to provide the necessary solutions that the financial. Industry today needs. And the first moment when I realized the potential about years ago when I read the first papers from Satoshi Nakamoto, what he envisioned. since then, it has grasp grasped me and the potential of the blockchain, I would say is huge.

So I think it could be a like a new internet.

Definitely. I mean, I mean, you were just saying that when you went through this report and through this documentation with regards to blockchain, this has really catch your attention. And I would like to understand what has happened in the meantime. So if you're looking a bit back, have there been specific milestones that you went through in those seven years that have the.

Also of course, broaden your knowledge and experience within the blockchain.

So I would say the milestones since then achieved is. That's the realization when I work on applications that I have to consider the fast development in the tech industry. I mean, was launched 3 years ago and it feels like 10 years. So I would say. The 365 days are the new 10 days. So the perception of time horizons is way different since AI launched.

And this also applies to blockchain as I see. some synergy with AI. And I plan systems carefully, they also have to be agile. So for upcoming changes.

And I mean, when we are talking about blockchain nowadays which is coming more and more popular. We often hear something about certain key features around decentralization, around trust and security. But if you would explain to someone who's pretty new to that area, what blockchain is actually about.

How would you describe it?

So for somebody who really got to touch with blockchain, easiest way to describe it, it is a database. So it's a warm database. It's right. Once read many, and you also have With HTTP, crud. So it's create, read, update, and delete. And with blockchain, it's only create and read. And that's the first thing. And the second thing is that it's also programmable. So based on certain conditions. a certain action can happen within the database and it works in a trustless fashion.

And I mean, when it comes to certain industries, you are, for example, working in the financial services industries, have a lot of experience, work with insurance companies, with banks. What are the typical use cases that you have seen working very well when it comes to blockchain?

So far, I have not seen much blockchain use cases that have been implemented. I would say we are still kind of in a proof of concept phase. But what I have seen are the opportunities if blockchain applied. So what value can can be added. So let's say when it comes to auditability. Let's assume so today a very simple example, you have a bottle of water aliel I have the cash. let's say I am thirsty. I want to buy the bottle of water from you. what happens in an enterprise setup? So I deduct the money from my balance sheet and give it to you and add the bottle of water to my inventory. So I get an

Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm

on your side, the opposite thing happens. your cash goes up and your inventory goes down. So, and now the question is. My SAP entry and your SAP entry is not necessarily correlated. So they can have a very different ID. And here comes the so here's the opportunity for blockchain. It connects those two entries. It makes sure this way that we have auditability and tamper proof transactions. And so saying that I would say in future when doing audits, many things can be automated, especially in the financial industry. If you have systems that are interconnected and where transactions are also mapped to each other automatically. So this way, then these big audits can be mostly automated.

hmm. Mm hmm. And I mean, you were just also explaining the difference from traditional databases and centralized systems that we might know from the SS. When it comes to blockchain, at least what I'm hearing a lot about is in the area of cryptocurrency, of course. Sometimes it has also a bit of a negative reputation due to some currencies where people are actually buying stuff that they shouldn't buy on certain black markets.

And what do you think from your perspective as someone who is quite close to that technology, who has accompanied the journey of this technology in the last seven years? What are the biggest? Misconceptions that people still do have when it comes to blockchain. Mm-hmm

the thing is, let me go back to the basics. So I also gained this insight from the early writings from Satoshi Komoto, the founder of Bitcoin.

Mm-hmm

way to put it simply down is you have two syllables, bit and coin, and the coin aspect

Mm-hmm.

What most people speak about, it's an hedge against inflation. It's something to increase your portfolio. So all this financial stuff. that

Mm-hmm.

speak about, there is also, I would say it's the. It's the hidden secrets in the blockchain. It's the bit aspect, a bit syllable. So the coin aspect, as most people know, it's like a revolution for the financial industry, but the bit aspect is a revolution in the tech industry. So as you, as you know, we have a huge centralization of data. So let's say for social media, And many big companies, so some companies also abuse their position. with Bitcoin, if properly applied, you can also

Mm-hmm.

those big companies. So, and if you combine the bit and the coin aspect, then you get a huge machine that can also be used as a back end of your business in order to scale. most people, so still today have not so quite realized that. And what happens then if people Do not properly apply in technology, then goes back to to some primitive features. And let's say, then you say, um, Bitcoin is just a stupid tool to send payments from A to B, nothing else. And if you,

That's what I hear.

if, if that's your assumption, then you, you would also vote for ETFs for. strategic reserves. So it's like applying tires to a horse. It's like backward innovation and So ETFs are not necessarily needed. And if people follow this assumption, then it will also lead to some extremes like pump and dump schemes and also people scheming each other. So it's basically a player versus player game in order to yeah, dump, dump one's coins to somebody else. And that's

Mm-hmm.

logical conclusion. If somebody thinks that Bitcoin is just here as a digital gold nothing else. So people realize that Bitcoin can be used as the backend of your business for tamper proof data. Then people will go away from the, from the pump and dump schemes and also from the archaic financial models and realize what Bitcoin can actually do in and also be the icebreaker for the next step of innovation.

Okay.

one thing that I would like to focus a bit more on is, or are the cyber security aspects around.

Bitcoin. So I understand also from our conversations that we had that we should be much more open to new technologies. I think we're trying to educate also the society with regards to generative AI around that aspect to try and play. And I understand also from what you have been explaining that Bitcoin could actually help to improve cyber security aspects, which are around confidentiality.

Integrity and availability of systems, especially with regards to transparency and traceability. So if you would like to elaborate a bit on the cyber security features that could actually bring added value, not only to people, but also to businesses with, with blockchain. Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm hmm.

Mm

So Bitcoin has the highest availability so far when it comes to information security systems as the miners are incentivized to keep mining. So that's also the reason why we have coins because miners are have incentive to mine because they get the reward if they do a proper job. So that ensures availability. then we come to the integrity. So blockchain basically is a system protected by hashes. So file types are hashed and they can not be changed. So for our 99. 99 percent secure, and that's due to the nature of the hashes, how the blockchain is designed. And then we have also the confidentiality. So this can be ensured if you have an identity system. So basically a wallet that is assigned to you and we know, okay, Elial is behind this wallet. And if I save this file to the blockchain, that only wallet with Elial behind can access. the blockchain and nobody else. So it's secured through cryptography. So, and then we also have those two other features you mentioned auditability. So basically you have the entire financial trace or not the financial one. It's a Actually the UTXO, those are the the paper notes in quotes, the paper notes of Bitcoin that you can trace from beginning to the end, and it can't be changed at all.

So once for the, so once it is on the blockchain, you can't change it. And then also audit ability. So we have a smart contract, so they are neither smart nor kind of contracts. They're just conditions. So you can say let's say if they comes, then the, all of it should be triggered. So for financial companies and they can also then prepare accordingly and the oldest can be mostly automated. So that's for the. one second. So that's for the basic paradigm. So we know today. And one thing I would like to mention is that some more things that blockchain can tackle, which today's technologies cannot. So that could be, for example denial of service attacks. So we have cloud flare. So they provide also solutions in order to protect your infrastructure order.

So they divert traffic to them. But imagine you have financial aspect in the internet. So every time you access a resource, you pay a fraction

hmm.

cent. then this means that. of service attacks are way costlier than before, and that's also contributes to the availability aspect. So that's

Definitely.

one thing. And the other thing regarding integrity is that in the age of AI. So let's make a very primitive example. I ask chat GPT, what is two plus two? if chat GPT tells me five. Then I would say how do you calculate five? Can you tell me? And then it says, yeah, due to corporate policies, I cannot disclose the solution to you. And how would you collaborate on a global level? with AIs, if you cannot trust the data source. So with blockchain, what you can also introduce is verifiability. So let's say.

Mhm.

comes to five and then you can check which model it has used. So, it's mathematically proven. if it has

Mhm.

or upgraded the model also on which data set it has been trained on. So you can verify that. it introduces this, this trust, trustless components. So let's say today's internet is used by Chinese, by Russian, by American, and they all supposedly hate each other, but they use the same thing. 

Mhm.

today, or in the blockchain, if you have also a data source that cannot be corrupted and can be verified by everybody, then also all the people globally will also accept this data source, even though they are in quotes, hate each other.

Yeah. And I mean, what I hear, Nigel, from all what you're saying is that you have incredible knowledge when it comes to blockchain, about the fundamental building blocks, about the concept, about the use cases, and I would just like to understand what are the key learnings that you would share with someone who's interested In upscaling and the area of of blockchain, what would be your recommendations that he or her should follow?

I would say just to keep an open mind, because let's go back 50 years ago. So if we look at the watch machine, it just washed. If we look at the TV, it was just showing shows. If you

Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm

and. We see a kind of convergence. So I, I would not be surprised if I can watch YouTube on my washing machine, So there is a convergence and if you look at blockchain, that that should, so there should be also some convergence with other technologies such as ai and also to find those interfaces, how the, those technologies inter overlap or overlap. And I would say that's the. that's the best advice I can give.

So when somebody wants to, um, improve his knowledge in this area, and also this leads to another thing. So let's say 20, 000 years ago. So we had, social rule. If it's not on the rock, so then I do not accept it. And also if it's not on the clay, so that's about 4, years ago in Mesopotamia, then I do not accept it. And then history moved on and then we had the on wax on parchment on paper. So on paper was 100 years ago and on means meant 100 years ago, such as If it's not on the paper and not signed by an authority, I do not trust it. So, and I would go so far. Also the former CTO of Coinbase, Palaji has been saying, saying that, that if it's not on chain, will not support it. So basically on chain is the new on paper.

hmm. I mean, that's a very powerful statement. On chain is the, it's the new on paper, which shows also the level of trust and confidence people are putting into that technology. And. I remember, especially during the last two years, a lot of discussions around NFTs. And I was wondering what your take is on that.

So, NFTs have been booming. I saw prices going into thousand and $10,000 for NFTs, and it was really crazy. And my question is, when we are looking about certain cryptocurrencies, but also at the blockchain technology, do you think that NFTs are here to stay or is it just a trend? Mm-hmm

I would say they are kind of here to stay, but I also expect to see a revamp of the whole industry. So as a theory, they will stay, but in practice, I'm expecting or in practice, I'm expecting a major shift. So. say in, I think this summer GTA six should be launching they announced that people will also be able to launch their own businesses in this game and also trade with each other. I could also imagine for the gaming industry. So let's say you have a special car with some special design that you can also sell to other people and it's cryptographically secured. So also in the metaverse, let's say if you

Mm-hmm

an avatar you're not sure if this, so is this a bot or not? so that you can also assign an identity to it. And also you have an identity cryptographically secured through the blockchain, then you can also assign the NFTs. I will say those are tradable object. Yes. I mean, for now I see the use case for for the gaming. industry. And for the

Mm-hmm

industries, I would say I'm still waiting for them. still leaning towards that, yeah, so far it has been speculation, but it's only the precursor to mature So let's say in the speculation, we get the infrastructure, we get the wallets, we get the platforms to speculate. then when the regulations come, Things get more serious and then I'm expecting. The proper use cases for NFTs and all kinds of videos on the blockchain.

And, and where do you see the blockchain technology in the next five to 10 years?

The next five to 10 years, I would, I, I'm more optimistic, so I could be wrong, but let me, let me guess. I would say

Mm-hmm

central bank, digital currency, currencies, the blockchain will be the global underlying network empowering them. And also same thing for the metaverse, people are kind of distrustful when it comes to metaverse because they do not know if are manipulating them. So in order, in order to introduce distrust, blockchain is needed. And then also for AI. So when I go back to my example with two plus two, blockchain is also needed. So also recently JGPT has also introduced the Chachapiti operator. So it's basically your your tool to browse the web. So you do not even have to move the mouse or change your keyboard. also I see blockchain as a tool where AI can also work on. So let's say if I Ask Jet GPT, tell me the best performing stock 10 days ago. let's say it says Nvidia. And if I say to Jet GPT, okay, please buy me 10 stocks, it'll say, oh, sorry, I have no interface. um, imagine that we also have block. So all this data, one big central database on the blockchain and the, those applications are just interface. But this database, so then you can also in future, let's say, browse through your favorite interface, let's say like, uh, Amazon and order on eBay. So those are just different interfaces, but huge interoperability. And also imagine future. So where I also see blockchain, it stores data. And it's also, it's also showing which content is unique or not. So if you have copies or not, And this leads to people or it leads to some urgency that people have to think in a more creative way. So it's like a sparing partner saying, it's not so creative.

Please be more creative. It's already on the blockchain. So, and also as the costs of executing with AI robotics go to zero, the only thing that can differentiate people from each other is the creativity, what kind of idea they have. think about this. Blockchain the medium to broadcast your idea and AI is the tool for execution. So let's say 100 years ago, execution was expensive, but idea was cheap. And now it's the opposite. The idea is expensive and execution is cheap.

Wow. Thank you very much, Nigel, for the talk, it was really amazing talking to you and learning from your experience when it comes to blockchain, metaverse, NFTs, but also AI. I don't think that this will have been the last time we're coming together. Really looking forward for the next time talking to you, Nigel.

Thank you. Goodbye.

Bye bye. 

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