Is the Supply Chain Ready for Real-World Asset Tokenization?

Hello, everyone. Happy Thursday, and welcome to another episode of Experts Talk, MarketScales premiere debate and discussion roundtable where we sit down with the top voices in your industry to talk shop on big trends, technologies, timely news, the market movers that are shaping your industry. Again, hearing from the voices that lead in your industry to get actionable on these topics and break it all down and walk away, hopefully feeling a little smarter and a little more capable of maneuvering these major trends. I'm your host, Daniel Litwin, the voice of b two b. It's good to be back in the hot seat here for another powerful discussion with some great experts in MarketScales Experts community. Before we jump in to the discussion today, I wanna make sure that everyone is, fully caught up with our Experts Talk ecosystem and know where to find previous episodes of the show. So, make sure that you're heading to market scale dot com to find previous episodes of Experts Talk. You'll find not only short clips from the show, but also full episodes, and you can also find upcoming episodes of the show listed out there. We have several episodes coming up next week and coming up in June as well. If you wanna get involved, you know how to reach me. Ping me on LinkedIn. Shoot me an email. And I'm looking forward to seeing all of you joining us live for more Experts Talk episodes. Alright. Let's jump into the episode today. We've got a bit of an exciting conversation here that's intersecting two big buckets of conversation in the business news world. Obviously, cryptocurrencies, blockchain, the impact of real world asset tokenization is always the rage and it's always in the headlines. On the other side of things, so is supply chain. As we see major breakdowns in, for example, the Baltimore bridge collapse, the, impacts of the COVID pandemic still shaping the logistics industry. We have two buckets here that are starting to coincide. And with our conversation today, we're hoping to shed some light on those trends. So in this evolving digital landscape, the mass investment in real world asset tokenization, or RWA as we might, colloquially say it here in the conversation, real world asset tokenization is leading as one of the most exciting and world shaking movements in tech. It's opening up endless possibilities for leveraging blockchain networks to represent firm ownership rights of physical assets as on chain tokens. Right? This advent of on chain asset ownership is already proving highly valuable for the financial industry, which is where we're gonna be drawing a lot of our learning lessons today in the conversation. But what about for the logistics and the supply chain management ecosystem? Right? Especially as our global production, of and our flow of goods is already responding to major pressures around things like visibility, efficiency, trust, sustainability, reliability, geostrategic diversity. Right? The supply chain is, being shaped by a lot of forces. So what are the logistics industry's most, pressing needs today? Right? And in the face of things like geopolitical stressors, inflation, coordination challenges, new tech, where does real world asset tokenization, which is promising things like enhanced visibility, efficiency, and investment fluidity. Where does this intersect with these trends? How is it gonna benefit the supply chain? Where is RWA tokenization as a tech ecosystem in and of itself? How mature is it? How ready is it to enter the logistics industry? We're gonna break all of that down here today with our panelists. So let's go ahead and let the experts talk here on Experts Talk. I'm pleased to welcome our three panelists for the discussion today. Welcome to the three of you. It's gonna be an exciting one. Hello. I'm, really looking forward to this one. We've got some blockchain pros here. We've got some supply chain pros here, and we're gonna be, bringing those worlds together. So let's go down the list. First up, we're joined by mister Lee Bratcher, president of the Texas Blockchain Council. Lee, welcome. How are you? I'm doing well, Daniel. Thanks for having me on the show. Absolutely, man. Thank you for joining us. We're also joined today by mister Adam Bloomberg. He's cofounder of Interaxis. Adam, welcome. How are you? I'm great. Good to see you today. Absolutely. Welcome. Thank you for joining us. Last but not least, one of our frequent contributors, doctor Craig Austin. He's an associate teaching professor at Florida International University. Craig, always a pleasure to chat. How are you doing today? Oh, I'm doing well. It's my pleasure to be here. Absolutely. Thank you again for joining us. So we've got, two blockchain pros, and we've got a supply chain pro. That sounds like the, start of a joke. Right? Two blockchain pros and a supply chain pro walk into a bar. What we're gonna do is try to paint the stage of both of these ecosystems, and then with our conversation, start to find areas where, we can merge the conversation a little bit more. And get a pulse check on, again, how ready the logistics industry is to take on real world asset tokenization and how ready real world asset tokenization is as a tech ecosystem to benefit the logistics industry and our larger supply chains. So let's jump in by talking about, real world asset tokenization tech. Most of the value of and the general market education around tokenization is coming out of the financial industry. We're all rather familiar with this. Right? So I'm wondering, Lee and Adam and Craig, if you have any perspectives on this, obviously, please feel free to jump in. But could y'all start off by giving us a pulse check on on the blockchain ecosystem today? Right? How far along has it come in even the last few years? How mature is the technology around tokenizing real world assets? Educate our audience here with this pulse check. Sure. I'll jump in. So, actually, we had some breaking news from last night. Congress the the house passed the fit twenty one act, which provides greater regulatory clarity for the digital asset ecosystem in the US around securities law, And and most real world asset tokenization, most of those assets are gonna be securities, but not all. I mean, it it just certainly depends. You know, tokenized real estate certainly is security. And so you you sort of have to navigate the the, securities law depending on what industry vertical you're talking about. That bill, passed the house. We'll see if it passes the senate. We no one really expects it to pass the senate. Although it did garner seventy one, democratic votes, which actually means perhaps there is a chance that it could get through the democratic controlled senate. So remains to be seen. I'd say we're still early on on real world asset tokenization. The main barrier in my view is, a national securities exchange. You know, we have alternative trading systems, ATSs, that are are acting as exchanges and are regulated by the SEC, specifically related to real estate and and other security tokens. They're a little bit too siloed in my mind, but I'll pass it over to Adam. I'm sure he's got more, insights on this insights on this. No. You're thanks, Lee. So you're right in that, yes, it's it's been geared so far more towards the financial world. Right? The the tokenization of funds or the tokenization of other assets like real estate, which I think we're slowly getting ready for. Part of the issue is is going to be how adopted is this gonna be, how many people understand how to use blockchain technology, how comfortable are we with the tokenization, how comfortable are we with with the risks that come along with, putting assets or putting dollars or or putting money into, some of these, some of this technology? That that also, doesn't necessarily mean on the supply chain side that we're not ready for it. What it means is there have to I I think there has to be different, different types of technology built for different purposes. And on the supply chain supply chain side, it has to be more geared towards what they need. And, you know, our our other guests can help us more with that, but geared towards more of what they need, which might be, we we need faster transactions. We need cheaper transactions. We need, you know, we we need faster transactions. We need cheaper transactions. We need, you know, easier ability. We we can do all that. The technology is there to do it. I think what we're lacking right now from the, technology side on you know, in terms of tracking supply chain assets is, I think we're lacking some of the investment into into the technology, into the building of the tech and the adoption of the tech such that companies will actually use it. I, I also might add that, supply chains need, blockchain. We're no longer in a just in time world, at least I don't think we are. And so most of the attention, most of the effort within supply chains is on managing and predicting supply chain risk. And we're in a environment where, supply chains have many, many, stakeholders across carriers, reporters, upstream, downstream. And so trust is a hard, concept for them to embrace. But blockchain blockchain, definitely, I'm not saying it's a panacea, but it definitely, is attractive. It's just a matter of buying in. And there are different supply chains who are actually have already embraced, Blockchain. And so they're already doing this. Miss Bishi, the Japanese conglomerate, they're already doing it because they make polymers, which are used in heart transplants and so forth. And so, the quality has to be very high for them to to use their products to manufacture them. So they have to see upstream. They have to be able to have trust that, that the quality is very high and that they can track, authenticate, where something that's coming from, in order to use it. And so, Blockchain, really is a, an answer for them. Lee and Adam, y'all were saying, earlier that, you know, it is pretty true that most knowledge around the blockchain, around real world asset tokenization is still around the financial industry. You know, maybe we can expand that out to, real estate as well. But would y'all say that really the knowledge around tokenization and blockchains as a technology, the siloed on the financial side of those operations? And if so, kinda what what educational arms does the industry have right now to expand that out? Oh, looks like hold on. We may have While we work on that, Adam, let's let's jump over to you here first for a second while we get Lee's audio back. Sure. So the the question, if I'm remembering it, was, are we are we ready? Yeah. Basically, just the the really, the the question being more of where is, how how educated is the larger business decision maker ecosystem on blockchain technology, on real world asset tokenization, right, around sort of just making decisions on this tech? Yeah. They're they're really not very educated at all. Yeah. It's mainly those of us that have been in the space, those of us that are really following it that that understand it. And, you know, keep in mind something like supply chain. We we mentioned earlier Maersk, and what they tried to do using blockchain for supply chains. I think most people are are not most companies are not yet ready. Look. I would love to help educate them. I would love to help help them understand things like wallets and transparency and decentralized ledgers and why they'd wanna use this. But re remember, much of the, of the supply chain, much of the logistics, all of that is like, their adoption of the Internet for so long was I'll email you a PDF of the invoice. Right? So it's gonna take, I think, a little while. Even though those of us that are in in this little room right here see the value in using blockchain technology, the value in using a transparent instant settlement ledger like we have with with blockchain, it it makes so much sense. But you're talking about millions and millions of people worldwide that are gonna have to learn how to use it. And until the user experience, until the user interface is such where you don't realize you're interacting with something on chain, I don't think we're we're going to get there. Again, we are, the the blockchain technology in terms of adoption, in terms of user experience is kinda still in the early, like, dial up Internet days. So as I said earlier, supply chain logistics companies didn't get get very much farther than I'll email you a PDF of the invoice, which is not really adopting Internet technology, which could have made everything, you know, you know, so much more, efficient ways away in terms of the user experience and the user interface to that point where we're utilizing it, and we don't think about it being blockchain. Yeah. I'll I'll echo that. I think my audio is back, Daniel. Yeah. It is. So when we see when we think about, tokenization and we think about supply chain, there are, some challenges with, sort of getting the stakeholders on board. Part of my, PhD research when I was an academic before founding the Texas Blockchain Council was around the tokenization of real estate and specifically land administration, blockchain for land administration. And, the the thesis there was it's not a technical obstacle. There there's the technology is there. It's a stakeholder management. It's a political obstacle. It's a veto player obstacle, if you will. There the same thing holds true for supply chain from what I've seen. I've I've, actually consulted a little bit on a few supply chain, for startups that are working to implement this. And the biggest challenge that they have found is getting all of the stakeholders on board. And that echoes Adam's comments around education. For blockchain to work in supply chain, you really have to have, a variety of stakeholders on board. I would say nearly all, if not all stakeholders on board, especially the major stakeholders. You have to have some buy in from folks who, maybe their incentives are to not have this process be more efficient. Maybe, you know, that that's gonna require, some some pushback perhaps from executive ranks, from the bottom line perspective. But the mid level management, may feel like this is a risk. May it's a risk to adopt blockchain and supply chain because it could be, could create loss of jobs for, certain folks that perform validation functions or or, audit functions. Well, I might add to that. A lot of these companies have these legacy systems, But the beauty of blockchain is that you can simply add those. You can build on them. You can scale them. So all the pieces are there. There are a number of different supply chains like De Beers, the South African diamond merchants. They track their diamonds from when they're carved out of, or chipped out of the mines all the way to the polishing to the point where you're taking your third wife, to look for a diamond. They are, they track every part of the process because they have to, the value is just too high. So there were a variety of these supply chains. Think of lithium batteries. They are probably the most counterfeited item on the planet. And so you have to know where, these batteries are coming from, be able to authenticate, who is producing them and be able to track it through the the supply chain. And that's what blockchain does. It strengthens the supply chains and more importantly gives you confidence, that what you're doing and if you're employing these smart contracts, these pieces of code stored on a blockchain, to ensure that you're getting what you're paying for. So there's a lot of different parts of the supply chain industry across supply chains where they're embracing it, they're practicing it, FedEx is using it. But I agree there has to be some of salesmanship on it, getting, CEOs to see it. And for many years, the supply chain guys were the guys in the warehouse. They weren't in the, they weren't in the the top floors of a corporation. And these were the guys who had the warehouse shirts. So we've really changed in terms of how we view supply chains and their importance, to the well-being of a company. And what Blockchain does is it allows you to see things ahead of time when there's a disruption. And we're in a disruption world, but it allows you to see these things and make changes. And so, we talked about the Baltimore report. A lot of the, the governor of Maryland and a lot of others thought, it would really impact supply chains, be devastating. But they responded very quickly. And so, the Norfolk port in New York, New Jersey picked up the flow. And so now the Dolly vessel, the Maersk vessel, we're talking about Maersk again, the Dolly vessel has been towed. And so the port should be open by the end of the month. If that's not evidence of a, nimble supply chains at work, this idea that they've become accustomed to disruption supplant, supplanting China. The the world of supply chain is changing by the day, by the moment. Yeah. And, I mean, both of these are very dynamic ecosystems. Right? And, we see changes in what is considered the norm as we see new policies. We see new partnerships, both on the blockchain and the supply chain side. So to take it back over to this, blockchain ecosystem, this, you know, tech ecosystem of real world asset tokenization, What would y'all say that the blockchain ecosystem has learned? Maybe policy wise, adoption curve wise, tech capabilities wise, I mean, however you wanna hone in. What has the blockchain ecosystem learned from tokenizing financial assets en masse over the last several years and working with decision makers in that world as cryptocurrencies get mainstreamified? Right? Maybe let's hone in on the policy side of that. Obviously, that's a a big lift. And when we're talking supply chain too, there's naturally gonna be some policy movement here that's gonna need to be aligned. So what are some of the learning lessons that the blockchain industry has made on that side of things that might apply as we start to look to, logistics adoptions of of blockchains. Well, I you know, we certainly I don't I don't think real quick. One, like, I don't think there's been that many tokenized real world assets other than we we've tokenized, you know, a few real estate projects that honestly haven't done that well. There have been a few funds now that have been tokenized. There have been attempts and experimentation. The most successful tokenization of real world assets thus far has been stable coins where we take a dollar and we turn it into a tokenized version of a dollar. So that's that's kind of where we are in the financial side. There hasn't been that much tokenization. So what they've learned is most investors, there there's this dichotomy. And and, again, this is just on the financial side. Investors who want to invest in something that's blockchain related don't want the don't want the returns that real estate gives. You. Real estate might give you twelve percent returns. People that are investing in something blockchain related want a hundred x returns or, you know, a hundred percent returns or something. That's what they're thinking. It's it's a whole different animal. So talking about tokenization, I I think if there's anything to learn here, it's don't don't talk too much about the tokenization. Talk about the efficiencies you're gonna get. And and going back a little bit, I apologize lately. I'll give you a moment to respond to this, but I wanted to go back because something that that was said earlier made me think about this. The tokenization we're seeing, the tokenization that we're talking about in supply chain is basically taking an asset, tokenizing it so that you can track it through the process. You talk about De Beers doing that. They're partially doing it so that you can guarantee or or or assure yourself you're not getting a blood diamond. Right? You're not getting a bad diamond. We there's a company actually in Houston that you probably know is called Topple that has been instrumental in kind of tokenizing, organic ingredients such that a a company can claim that that they are, delivering an organic product. That is very different from the financial aspect. So a lot of the education has to be utilizing blockchain technology for something that is completely not financial. This is not speculative. I'm not speculating on cocoa prices because I'm putting cocoa beans on chain. I'm doing it so I can watch them through the process instantly in a decentralized ledger such that everyone has access to the same database. That's why I'm doing it. Eventually, I think we will see more, adoption of decentralized finance of stable coins, and everything to go along with the supply chain to say, when when these cocoa beans reach my so that I can process them, then you will immediately get your money via smart contract and will pay be paid to you within a second. That's going to be very different. But I think a lot of the education that that we talked about, and I apologize I didn't get to this, is helping the those supply chain logistics company understand that when you're talking about the blockchain, you're not talking about necessarily a financial asset right now. You're not talking about volatility and something that is going to be highly regulated or something. You're just talking about using a database that everyone has access to. So sorry. Lee, go ahead. Oh, I I concur with everything you said, Adam. I we are still very early on the tokenization of even financial assets. Incredibly early. Less than one percent of all real estate assets, all money market funds, dollars. I think Adam is correct in that we are furthest along in the tokenization of dollars through stablecoins. But even that, it has a long ways to go. And it remains to be seen if a private issuance of a stablecoin will be the dominant force here or if it's gonna be a state issued stablecoin, such as a central bank digital currency. Of course, we would advocate for private issuance and not to have the state that intimately involved in, central bank digital currency. That's more of the Chinese model or, you you know, totalitarian model in which, there is no longer any privacy of financial financial transactions. So we would certainly advocate for the the private issuance where, an entity tokenizes dollars, holds those dollars, in a bank, and most of the time in treasuries, actually, which is really good for the US because then that's a forced buyer of US treasuries. So we're very early. I think one of the things that we've learned as an industry is, you certainly can't promise to be a panacea. Doctor Austin used that word panacea earlier. I think it was well placed. We can't promise to solve everything. Of course, the the Gartner hype cycle shows that as an industry, we are well past the trough of disillusionment. Right? You have the hype at the very top, and then you drop down to the, trough of disillusionment, and then you have the plane of productivity as Gartner puts it. We're in the plane of productivity, certainly on the supply chain side because, the hype is over. People think, blockchain wouldn't work for supply chain, and now there's actually people building supply chain, implementations with blockchain. The the expectations have to be set properly, that this is not going to to save you eighty percent of your supply chain costs. It's gonna save you inefficiency. It's gonna save you in brand you know, your brand integrity. So it will there will be some dollar, amounts to be saved, but it has to be realistic. Right? And I think one of the biggest things I'd love to get doctor Austin's view on this and and Adam's as well. On the supply chain side, what I see was a struggle a year ago when I was doing some some consulting. And it may no longer be a struggle, but it certainly was then, is how do you mark the physical asset such that, you know, the the hash, of course, and and the the blockchain instance, as that moves along is, immutable and unalterable. But the physical, item, you know, we were looking at, you know, chemical markers, RFID tags. You know, RFID tags can be a little expensive. But, you know, I think especially on something that's like a diamond, you couldn't put an RFID tag on there. And if you had a box of of diamonds and, of course, diamonds within the box could be, changed out. So, the chemical marking angle was pretty, I guess, innovative and and forward thinking, about a year ago, but maybe doctor Austin has the latest on on how we actually are marking physical items to prove their provenance. Well, I might add, that a lot of this, tracking and tracing, is key. Being able to see how visible is your product, whatever your product may be, whether it be a vaccine or it be a DeBeer diamond or whatever. And so there a lot of these Internet, of things, the IoT devices allow you to track and trace. And I haven't gotten into the details of, like, the diamonds, but being able to source and be able to track their origin in terms of whether they're a conflict diamond or not, because conflict diamond is more than just a term and expression. It represents where people are being enslaved and being abused in order to pull diamonds to fund civil wars and whatnot. So, I liked the point earlier where you were talking about it's more than just tracking the, having the information, having the financials even, of paying for it, and being able to track it. But all the pieces, whether you're using RFID or whatever, are critical. You have to have visibility, and there's one thing, like at sea, even today, like the ocean bill of lading it's the same ingredients, that are, the same information that's on an ocean bill of lading today hasn't changed since Columbus came to the new world. And so there's a lot of this that, needs updating, upgrading. It clearly is salesmanship, but also Blockchain allows, it solves a lot of problem, but a key part of it is knowing where your product is, whether it be a vaccine or whatever, you have to know. And so there are all these devices that allow you to do it. And, like FedEx uses blockchain because they transport everything, whether it be a kidney or it be a high value item. You have to know where the product is exactly. And so with Ocean Cargo, even now they have these, players who can put a little device on a container so that you can finally see it at sea, which you can't currently, without one of these companies. So there are a lot of things that are happening, in terms of track and trace that make it possible even in a box. I know you can do a a tracing thing as thin as a piece of paper. They do it in retail on a sweater that, in a on a rack. They they can do this with the diamonds as well. Let's jump over to again, if we think about the learning lessons from the larger blockchain ecosystem that we can apply to the hopeful future of adopting real world asset tokenization in logistics. I mean, before I even say that, you know, I I think, Adam, you brought up a point here, right, which is that real world asset tokenization as an extension of the blockchain ecosystem, which in some ways is still rather nascent, is itself very nascent. Right? And so there's still a lot of learning lessons around, you know, everything from policy to maturing the technology, to educating decision makers on adopting and investing in the right tech, then managing and operating the technology. If you had to pull from some learning lessons around the financial ecosystem and around operationally. Right? Once you're working with decision makers to onboard blockchain technology, to execute on that technology, and to use it to actually, improve their operations and turn that into ROI, What learning lessons have we gotten out of the financial side of this that we can start to kinda resynthesize into strategies for real world asset tokenization when working with logistics decision makers? I think a little bit of of it is, you know, what I said a little while ago is is understanding that tokenizing something does not not make it a volatile crypto asset. Right. That is a hard concept to get across, and we've seen it happen. Like, we've we've seen it happen with the likes of BlackRock. They are, you know, tokenizing funds. They tokenized the money market fund, which has been wildly successful, and all it's doing is literally holding US treasuries. But they tokenized it, and they they invested in a company called Securitize. It's going to tokenize other financial assets. And what Larry Fink has said over and over again is we're doing this because of the efficiency it gives us. We're not doing this to turn our funds into volatile crypto assets. So that is, I think, part of the learning lesson is the financial sector gets it because they're incented to get it. Right? They they have the incentive to put these assets on chain because when you're BlackRock and you're managing, whatever, eight trillion dollars or something, if you can save ten percent via some sort of more efficient technology, that's a huge, huge number. And so I think, again, getting across, which we've learned already a little bit in the financial world is we're using the technology as a database to bore to more efficiently track things. We're not using it to turn every cocoa bean and diamond and well, diamond's a bad example. Every cocoa bean into a financial asset. Yeah. I would I would add to that and say that, there is going to be a point at which we have to have a national securities exchange for tokenization of things beyond dollars and money market funds and things that, are very clearly securities. There's just too much too many silos, not enough eyeballs to really fulfill the promise promise of, increased liquidity, you know, price discovery. If all of these assets are in different places, there's not enough eyeballs, there's not enough liquidity, then they're really in the same quagmire that they are today, which is, the reason why well, one of the reasons why you'd wanna tokenize an asset is for, as Adam said, increased efficiency, perhaps some price appreciation, only relative though to the number of potential buyers. Right? It doesn't have anything to do with the asset itself. The asset itself is still producing, has the same amount of value. But if you can put more eyeballs on it, it's almost a tool to increase the number of of bids. And that, all other things being equal can increase the price, the value of the asset. But, you know, we haven't seen that, yet. And, again, I think the reason for that is because of the fact that there are several different ATSs listing these assets, and there's just not enough assets listed. Part of that is economies of scale. You really don't see, a lot of value tokenizing a small, asset because of the legal costs. They could run up to ten percent of the cost of the asset just to do a, a a reg d filing or or whatever securities, filing you're going to do. So, you have to have scale, and you have to do this at a rate that is going to pencil out for the, the issuer to, make a profit at the end of the day. And I just don't think that we are to that point yet. I think we will be in the coming years, but it's gonna take time. And and, you know, the other thing that that's taking time and and, what Lee alluded to is the cost involved. Right? The cost to try to find blockchain developers that can write smart contracts, and then you have to get them audited. Because if you're gonna put your at your your supply chain assets onto this decentralized ledger, you better make sure the technology is tracking it correctly. We've had decades of work with with the databases we currently use. We know they're relatively safe. And more importantly, I think for from the perspective and and and, you know, you all can give me other perspective, but from the perspective of those logistics companies, supply chain companies, the companies that are doing the producing and and moving their assets is there's a throat to choke somewhere in there. Right? With if if you move everything especially onto a public blockchain and there's a a problem with the the smart contract, is that there's a problem somewhere in there, whose throat do you choke? Who do you go sue? We're a very litigious society here in the US, and you wanna have someone to blame at some point if something goes wrong. And I don't think we have that level of comfort yet, and there's the expense of it. You have to find the people that can write the code. You have to find the people that can audit the code before you can start tokenizing anything on your chain. Now I'm curious too. You know, we mentioned this a little bit earlier, but the supply chain may find some benefit from blockchain technologies, from real world asset tokenization even before, you know, we start talking about tokenizing, you know, every asset in a warehouse to give it visibility. There may be some intersection around the financial side of the supply chain and bringing the benefits, and the learning lessons that the blockchain ecosystem has already made in that sector and sort of bringing those to the supply chain ecosystem. I'd love to hear from y'all on that. Right? Where everyone thinks there could be some alignment there now to start to build some of those networks of even just collaboration, between these two ecosystems as we prepare for more real world asset tokenization maturity. Yeah. I'll I'll jump in. I think, you know, the the smart contract piece is gonna be the most important, layer that is transferred over from the traditional financial services space and the DeFi space. Oracle's, you know, providing data, around things that are undeniably true related to insurance, and supply chain. Of course, insurance is a big deal when we're talking about, shipping goods. And so, you know, having sort of supply smart contracts, built on the insurance side, you know, increases the efficiency of, certainly those those products being able to be brought to market. And, you know, I think there are, huge risks associated with doing some of this stuff because the insurers are unfamiliar with it. Right? And they're very familiar with the traditional way of doing things, and it could actually, in the short term, increase the underwriting costs even though the insurance risk might be lower. Right? So, I'll take an example from the real estate space, but apply it to, you know, shipping. For example, you know, there the actual premium risk of ensuring title, transfer is quite low. The risk premium, you know, is for a quarter million dollar house or half million dollar house is in the hundreds of dollars, or less. You know, some in some states, it's even much less. But the title insurance cost, to the to the seller or to the buyer is much higher. Sometimes, you know, Texas, we have regulated title insurance, and so there's a formula set. So you're actually spending thousands of dollars on title insurance when the actual risk premium to the underwriter, you know, is is much, you know, maybe a tenth of that. So in if you transfer that over to the supply chain, you may have a short term increase in, underwriting costs for this new, you know, smart contract model for insurance for new shipping because it requires a little bit of, in house learning, perhaps, educating, bringing on a new staffer that Adam alluded to. There's just a a dearth of talent, and and a lot of the talent is being sucked up by the the financial services, products. So when you're moving over to supply chain, you're competing for that same talent. And and so in the near term, you might actually see, premiums increase even though, logically, that doesn't make sense. And it's it's kind of a a first mover cost. You know, there are first mover advantages, but, that's one first mover cost that you might need to consider. I I might also add that, for a lot of, members of a supply chain, they typically store data in silos. It's not shared. And the more involved the supply chain is, the less the less accurate the data is that you're seeing. The beauty of a blockchain, one of the benefits is that it addresses these issues by creating a trusted shared and decentralized ledger that eliminates silos. And so that's good for everyone, because it's tamper proof. And so you're able to all the members of the, blockchain, can see what's going on. It's immutable. And so they really need this level of visibility. They need to know, they need day data being, shared. And it it has to be current. It has to be, time definite. And so, block and also as long as you're putting blockchain with a AI and sharing it across, cell networks, you're able to better monitor and expedite, the identification, meaning bottlenecks that occur in supply chain. So I agree with, some of the comments where that, it's all about making supply chains more efficient, more predictable, and this is not a world of predictability. Disruption is the, is the flavor of the day. And so it's being able to foresee these things. And if you're sharing data, then you can foresee and then respond. So something real quick, Doctor. Austin, something you brought up is is those of us again on this in in this panel understand that this is a, you know, as we say, the single source of truth. This is a ledger we can all trust. But I think the problem is most companies don't. They don't understand that they can trust it. They don't understand that that having code actually store and progress the chain actually makes it safer. And and the, issue the token mechanisms and the validation mechanisms actually makes it safer and more secure. In their minds, it's you're putting my data out there on this public ledger. I don't fully trust blockchain because x, you know, senator or congressperson said I shouldn't trust it, and therefore, I don't necessarily trust I I don't trust that more than I trust my, PDF and my Excel spreadsheets. So I think that's going all the way back to our talk of education. That's what we have to get to is the idea that this is a trustworthy system, and it's not necessarily based on trusting other people. That's the whole point. Right. Right. I I so agree. And and you bring up an interesting point there, on the topic of public chains and private chains. Right? We in the digital assets and financial services world, the public blockchains have one app. Right? They're, the main value, the public chain like Bitcoin, Ethereum, Solana, etcetera, is pretty evident. But in a supply chain world, it remains to be seen. There are projects and pilots that use private permission blockchains similar to IBM's Hyperledger. And there are projects that are navigating closer to the public blockchain side that, you know, public being accessible by anyone, without, you know, the the rules of the road are are prewritten and decentralized, whereas a private blockchain is permissioned and has, kind of an operating agreement, if you will. And most people refer to that as distributed ledger technology rather than an actual blockchain. But, I I tend to think that public chains are more useful for real world asset tokenization, certainly on the finished services side, even on the supply chain side as well. But I think there's still a lot of people in the industry that are looking to private blockchains because they aren't really willing to let to to the the trust issues are still there as Adam was alluding to. So they aren't going to re really, realize the benefits, the technology by staying in the private blockchain world because, that is incremental. It's very incremental benefits. When you it's really not until you move into the public blockchain world, the permissionless blockchain world, if you will, that you're actually seeing transformational, gains and efficiency. And that that is a little bit of a leap of faith, and it's an easier sell to the c suite to say, hey. Let's try this. It's gonna be permissioned. It's gonna be private. We're gonna set the rules of the the operating agreement of the blockchain, if you will, alongside our other stakeholders and partners in this consortium or in the supply chain. But in reality, I think that is a mistake, and that's, perhaps where Maersk may have may have got off on the wrong foot. I think the other piece that that is really challenging is just getting stake stakeholder buy in, from everybody. But it it did strike me that we hadn't really touched on the, permissionless versus permission blockchain side. Be curious to to know what the other panelists think about that. Yeah. I I mean, look. I'm a big fan of the permissionless, blockchain side, but I totally understand that certain industries might wanna build kind of their own permission. I know Lee you know, I'm I'm from Texas. Lee and I known each other a while when you were first starting the council. Some of those companies in Texas that have start started, like, oil and gas specific blockchain related companies specifically for kinda supply chain issues. And it's put some of those companies, I think, more at ease with the fact that this is not, you know, this is not a bunch of, you know, ETH validators wherever they might be in the world looking at my transactions. This is still, relatively private. So I understand in the supply chain world where it might be advantageous to have kind of an industry permissioned chain, kind of like what Maersk was trying to do. But now that we have more adoption, now that we have better technology, maybe we get there. My frustration with that is how is it going to interact with the decentralized finance ecosystem, is really when you can see some efficiencies. It's really where you you can see some people leverage, what what is built being built overall with global permission permissionless blockchains. But I can see where, again, the dipping the toe in might have to be permission chains like we've already seen in Texas with in the oil and gas industry, like Topol is doing with some organic food producers, to to make it to where, okay, we're gonna show you the technology, but in a way where not everybody gets to look at it because that's worrisome. We're only gonna let you and your suppliers and a few others look at this. You know, but the interesting point is these private, permissioned, supply chains, they have fewer nodes, you know, fewer players. And so they're a lot more, vulnerable to fraud entering, their their their oil stream, than these, public ones, even if they're not permissioned, because you need to have a variety, lot of players in order to ensure the blockchain. Or do you think I'm wrong? No. I I think you're exactly right. But, again, that goes to the education and the understanding that you have more you know, the more validators you have and the more dispersed and and the more decentralized the validators are, of course, we know that makes it safer. I think for a lot of people that, again, are holding on to emailing PDFs, that doesn't seem safer. It seems less safe. They want a database. They, you know, they they virtually want a server sitting in their office or something. They're not they're even and you probably know this. They're afraid of the cloud. So Right. How are you gonna get them to understand that that you understand that that the technology is safer and more secure and more efficient when you have actually more validators rather than fewer. We know that, but there are examples, again, that we can talk about in in Texas that are looking at oil and gas. There are exit there have been examples in the financial world. You know, Figur tried this with their provenance chain, and I think they've they've tried to make it more public and more validator nodes now and and because it wasn't working as a private chain. It was a bunch of banks validating it, which honestly, it doesn't change anything. The whole financial system is a bunch of banks validating transactions. So how was that gonna change? It was just making it more expensive. So, again, we know that. It's part of the education process to make sure other people know that. And, again, once we have the user interface and experience and someone builds and and and and all those things, and we don't have the ability for them to totally work with that in a seamless way. I mean, you know very well, You're you're very likely if a company has a a crypto digital asset wallet right now, most of these companies, you're likely to walk in and on on the, you know, assistant's desk, on their on her, computer, there's probably gonna be a sticky note with the c phrase. Alright? It's it's likely to be there because there's sticky notes with passwords on there, and the password is still password. So Mhmm. Like, we we we gotta have the user interface, and and they have to understand that more nodes equals safer, but that's a hard concept to get across as well. And I do think there will be some bridging opportunities from the permission chains. It does take a fair amount of development work, but, you know, to be able to use some of the decentralization and immutability and integrity of a public chain. There there are, projects that are working on bridging that gap, from the permission side to public chains. And I think, you know, there there's hybrid models even like Hedera. I would put in the camp of a hybrid model where it's it's a public chain, but it has known and private validators. You know, I think there's gonna be some some opportunities for, like, the topple folks, the people building the, supply chain for oil and gas. I know there's a there's an association called the Blockchain Energy Association down in Houston that has really worked a lot on that and done great work. I think, you know, at some point in the future, they're going to reach out and touch public blockchains, but it could be in a in a very, you know, limited way. It could be for just certain portions or parts of the the process where they they want that. They wanna give up a little bit of control for more security, more decentralization, more accuracy and immutability. And then there's there's possibly other parts of the process where they wanna pull that control back. That remains to be seen how that all integrates, but I I'd be surprised if there's not, you know, some people working on bridging. Of course, there's people bridging between public chains. Right? That's a a huge industry on on the DeFi side. And, you know, there are there are hacks and there are vulnerabilities when you're bridging. And and so, you know, that's part of the process. It's part of the learning process. There could be, some some data breaches and some bleed over. Of course, it wouldn't be a necessarily a hack of a digital asset if you're if you're bridging to a private chain, but there could be some some data breaches and some bleed, as as people experiment with that a bit. Team, I think on that note, we'll go ahead and wrap up the conversation. I think in a lot of ways, this was a primer of a conversation. There's still so much proliferation that needs to happen around real world asset tokenization at large, even beyond the supply chain. Right? Seeing some validated use cases of this ecosystem, implemented for more than just, the financial sector. But I think this is an important conversation, and if anything, we're laying some lily pads here for us to have some follow ups. Because if anything, the logistics and supply chain industry is probably one of the most right to take on real world asset tokenization and make best use of blockchain technologies. So now it's gonna be about evangelizing, educating, and getting actionable about where to launch some of that technology and for which use cases specifically. So, again, thank you to the three of you. This has been a great conversation. We're definitely gonna have you all back for more on this topic. Again, folks, we've been hearing from Lee Bratcher, president of the Texas Blockchain Council. Thank you again, Lee, for joining us. And, thank you again to Adam Bloomberg, cofounder of InterAccess. Adam, thank you for your time as well. We We were also joined by doctor Craig Austin, associate teaching professor at Florida International University. Craig, Adam, and Lee, it was a pleasure, and I'm looking forward to the next one. Thanks again for your time and for your insights. Thank you. Thank you. And thank you everyone for tuning in to today's episode of Experts Talk. If you like what you heard and saw today and you wanna tap into previous episodes or you wanna make sure you don't miss out on future round tables here with experts in your industry, make sure that you're heading to market scale dot com. Again, market scale dot com to find all previous episodes as well as our full listing of upcoming live shows. And if you yourself wanna get involved in the Market Scale Experts community or on an episode of Experts Talk, maybe you've got something actionable that your industry has to hear. Well, guess what? Maybe you can get on the show as well. Shoot me a ping, over LinkedIn. My inboxes are open. You can also shoot me an email, daniel dot litwin at market scale dot com, and I'm looking forward to putting you in the hot seat. Alright. Thanks again, everyone, signing off for the week. We'll be back next week with some more episodes. But for now, I'm Daniel Litwin, the voice of b two b signing off on this episode of Experts Talk. Have a great Memorial Day weekend, and we'll see y'all next week.