A Guy Walks Into a Bar

What you need to know about zero-knowledge proof – plus everyday practical applications of Blockchain technology

Ric Edelman: It's Monday, August 28th. Have you ever heard of zero-knowledge proof? This is something that's pretty important, you're going to be hearing a lot more about it. So, I want to give you a heads up. Zero-knowledge proof is a cryptographic protocol. It lets you prove to someone that a particular statement is true without you having to reveal any specific information about the statement other than the fact that it's true. Does that sound a little confusing? Let me explain to you what I mean. You walk into a bar. No, this is not a joke. You walk into a bar, you walk up to the bartender, you order a drink. The bartender wants to know that you're over 21. You've got to be over 21 in order to legally order a drink. Right? So, you've got to prove to the bartender you're of legal drinking age. What do you do? You give the bartender your driver's license. Think about that. That driver's license has massive amounts of information on it. It's got your full legal name, your address, your date of birth, your driver's license number. It's even got your height, weight and eye color. You're giving a huge amount of info to that out-of-work actor. Sorry, bartender. And all they want to know is whether you're over 21. So why not just give them something that answers the question? Are you over 21, yes or no? That is zero-knowledge proof. You get proof, but you get zero knowledge beyond that.

When you pay for a meal in a restaurant with your credit card, you give your card to the waiter who usually wanders off to the back to process the payment. The waiter has your card, your full name, the full card number, the security code of the card. This is why restaurants are the biggest source of credit card fraud in the industry. Why does the waiter need to have all that information? All they need to know is that your payment is complete. The waiter needs “ZKP” Zero-Knowledge Proof. ZKP, zero-knowledge proof, was introduced back in the 80s. It's now a major tool provided by blockchain technology. With zero-knowledge proof, we can demonstrate that a crypto transaction is valid without revealing any information about the sender or the receiver or the amount of the transaction. Z-cash and Monero are two digital coins that are using this tech. Zero-knowledge proof is a powerful crypto tool and it can be used as a big deal for providing privacy and security in our new digital age. You're going to see it available for you before you know it.

Hey, on a related note, I want to talk a little bit more about blockchain technology. I talk about it a lot here on the show and for good reason. It's one of the most transformative technologies of the 21st century. It's revolutionizing commerce on a global scale, and it's growing at breakneck speed. The global market for blockchain is already 10 billion. It's projected to grow 10X, all the way to 1.4 trillion by the end of the decade.

Here are just a few examples of blockchain technology already in use. Farcaster. That's a decentralized social network, kind of like Facebook, except all your data is stored on the Ethereum blockchain, not some corporate database. That means your social media account is your property. You own it, you control it, and that means you get the profits, not Facebook. Or try this one. You know, you can order groceries online, you get delivery in hours, you can stream movies to your phone instantly. But if you want to send money from your bank account to another person's bank account, or if you want to pay a bill via ACH or if you want to pay employees, all that takes days, even longer. If you got a weekend or a holiday involved, all this is solved by Stablecoins. One Stablecoin equals $1, and they reside on a blockchain. And that means your money moves at the speed of the internet 24/7, 365. You don't need a bank account. You avoid all the bank fees. And if you live in a country with a bad economy or a corrupt government or where you live too far from a bank, Stablecoins give you access to the financial world without any bank or government involved. There's already $100 billion in Stablecoins. One of the most popular is the USD coin, 1.6 million users worldwide. They've done $2 trillion in transactions so far this year, twice as much as PayPal. And by the way, PayPal just launched its own stablecoin.

Here's another example of how useful blockchain is. We all depend on Google Maps and Waze, but those maps don't get updated all that often. And you're the user of those apps, not the owner. And that means the profits go to Google, not you. So check out Hive Mapper. You plug a dash cam into your car. That's it. The camera takes photos, sends them to hive mapper. Your photos get added to the database in real time. You earn money by participating in all this. And it's all running on the Solana blockchain. In just three months, Hive Mapper mapped a million miles. It's mapping the world five times faster than Google did, and it's just getting started. Okay. Is that too new for you? All right. Try this. Starbucks, their loyalty rewards program has 29 million members, 10% of all US adults. Boy, that's a lot of coffee drinkers. That program to operate costs Starbucks a lot of money. And so, Starbucks is lowering its expenses by launching NFTs, non-fungible tokens, using the Polygon blockchain. These NFTs are rewards for the rewards program members. You get things like exclusive coffee tastings. But here's the thing, because they're NFTs that Starbucks is giving you, you own them. If you don't want that reward that Starbucks has sent you, you can sell it. Some of them are selling for $500. These NFTs cost Starbucks almost nothing to produce and distribute their digital collectibles. You benefit as well.

There are tens of thousands of ways that companies are starting to use blockchain technology to improve their businesses, to introduce new services, reduce costs, save time, give better service. 45% of business organizations worldwide are using blockchain technology. They're focusing on secure information exchange. So, what is all this? A blockchain is simply a database, and we use databases all the time. Your checkbook is a database. It stores all your bank deposits and withdrawals. Blockchains are simply new, better databases. They supply a single source of truth because they're permanent. They're an immutable, permanent record of data with 24/7, 365 access. Thanks to blockchain tech, we can do crowdfunding. We can transfer money internationally. We can make it cheaper for banks to operate. J.P. Morgan says banks are going to save $120 billion a year by using this technology. It's going to reduce insurance fraud, which costs $40 billion a year. It's going to cut electricity bills. It'll detect fake medicines. It'll handle the recording of deeds and titles. It'll guarantee honest electronic voting systems. That'll be a big deal in future elections. It'll manage patient data. It'll increase the sales of hotel rooms where you own the room night instead of the hotel. You can sell your room night instead of canceling it. Blockchain can help sell advertising space. It can verify know your customer rules. It's also a great document storage system that means it's perfect for providing digital identity ID cards and numbers and documents. It protects against forgeries and counterfeits. You know that the product you're buying is the real deal.

And finally, blockchain will be used for asset management. There are so many practical applications of blockchain, not just about buying Bitcoin. In fact, you can get engaged in all this tech without ever buying Bitcoin or any other digital asset. It's called the “picks and shovels” approach. That name comes from Levi Strauss. Levi Strauss went to the San Francisco during the California Gold rush, but he never mined for gold. Instead, he sold blue jeans to the gold miners, and he got rich, richer than any of them. Without ever investing in gold. You can do the same thing. The “picks and shovels” approach to blockchain. Instead of buying Bitcoin, you buy the stocks of companies that are building blockchains or companies that are using blockchains to make their businesses better. One great way you can do this is the Global X Blockchain ETF, the symbol is BKCH. It tracks the selective blockchain index. It invests in companies like Bitcoin miners, crypto exchanges and banks, companies building blockchain applications, hardware and integration providers. This is how you can get engaged in this raging new technology, the Global X Blockchain ETF, symbol BKCH. You can learn more about it at GlobalXETFs.com or talk to your financial advisor about it.

Before we end today, I would like to take a moment and note the passing of my good friend, John Begeny. John was producer at WETA, the PBS television station in Washington, D.C., where I produced all of my specials for public television over the past 20 years. It was John who spearheaded my doing this, and he was the producer for all my specials, and we grew to become very good friends and we are very sad by John's passing.

He was diagnosed in June with pancreatic cancer and passed very quickly, and very shockingly. And it's hard to put into words how much that Jean and I miss John, and his very close friends and colleagues at WETA, where John was just a beacon of light. He was one of those very special people who, upon meeting him in the first few seconds, he instantly becomes your best friend. The word gregarious is inaccurate. Incorrect. The life of the party is not the right way to describe John. But both of those do give you a basic sense of the personality, the dynamic, the human connection. I mean, just in a casual conversation, him talking about this fabulous bread that he came upon and, oh, you've really got to try it. And then next thing I know, a few days later, there's a delivery to our doorstep from this company that makes this bread. It was just John being John. So personable, so human, so focused on you as an individual, always with a smile, always excited to talk with you and to see you and to be with you. And all at the same time, one of the most talented producers I have ever had the pleasure of working with in television. And I'm just so grateful for the privilege of having known John for all these years, and we already sorely miss him. John Begeny. Rest in peace.

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