The World Economic Forum, which is often referred to as WEF, is a Swiss-based international organization focused on engaging leaders in finance and government, among other areas, on tough issues to shape policy and improve the state of the world.
The 2023 annual meeting of the WEF in Davos, Switzerland, was last week and the focus was on post-COVID-19 pandemic fragmentation and multipolarity.
In attendance were the likes of actor, producer, director and musician Idris Elba, European Commission President Ursula von der Leyen and First Lady of Ukraine Olena Zelenska, among many others.
Benzinga attended this year’s annual meeting to interview leaders in business and government. The following discussion was with Brett McDowell, chairman at Hedera (CRYPTO: HBAR).
Please note that the below text was lightly edited for clarity and concision.
BZ: Care to start the introduction with a discussion about your background?
McDowell: I began my career as the director of information and media technology at the Massachusetts Museum of Contemporary Art (MASS MoCA). This is one of the biggest institutions dedicated to the convergence of media technology and contemporary art.
At MASS MoCA, I participated in some consortia. We were in rural America and sought to build a high-tech industrial park and attract companies to host in our facility. I helped represent our interests in the collaborations that ensued.
This was my first foray into industry consortia where the members were voting on outcomes to improve the overall local market.
Then, in 2002, I joined IEEE. There, I was in charge of a number of industry consortia projects and building standards. Over the next 20 years, I helped big tech companies build coopetition organizations.
What was it like trying to have these competitors work with each other?
It was a lot of negotiations and consensus-building. We sought to help these organizations have enlightened self-interest, and give away some of their IP, potentially, to the community at large.
You spent some time working around digital identities, as well?
That was a theme starting with federated identity and, eventually, biometrics and cryptographic identity systems. Liberty Alliance created SAML 2.0. The Kantara Initiative created the Identity Assurance Framework. FIDO Alliance created what’s now known as Passkeys. And, there was another one called DMARC, a cybersecurity standard aimed at stopping email-based phishing attacks while I was at PayPal for a while.
What was your role at PayPal?
I was at PayPal to help work with the community and collaborate and influence public policy. It was my first time working in public policy.
Eventually, however, I had invested enough years into biometric and cryptographic identification standards. I was ready to take on a new challenge such as IoT (Internet of Things) because the devices were getting hacked all the time. There were big problems that needed solving.
Anyways, I was thinking about blockchains and mentioned it to a person who was working at Hedera at the time. They thought I would be a good fit.
I have now been at Hedera since 2019 and focus on the coalition of organizations that make up the Hedera Global Governing Council.
You are participating in the World Economic Forum as a speaker?
I'm on a panel for digital identification. The World Economic Forum is launching a digital identity initiative housed within CISA, the Crypto Impact Sustainability Accelerator. We will discuss that on the panel, what we are trying to do, why we're trying to do it and what we hope to get from it.
Care to talk about your roadmap? Are you pleased with where you sit on that roadmap?
Our focus is on bringing added functionality to features that were in a beta or even an alpha stage, as well as making it really easy for developers struggling with integration to have less dependency. So, we’re making it easier to move your application from Ethereum (CRYPTO: ETH) to Hedera, and not lose access to some of the market integration that Ethereum has.
Adding, staking was a big feature we shipped last year. There is a lot of functionality we would like to add to our staking capability. That’s a part of the roadmap, including some things around decentralization and network maturity features.
A big focus, also, is community nodes. Important for the industry is to have permissioned node operators who are operating the infrastructure. This is predicated on trust.
How do you trust if you don’t know who you’re trusting?
When we emerged on the scene, we positioned Hedera as a trust layer for the Internet. What we've decided to do is have the node operators be very transparent, as well as affiliated with trusted brands.
The companies we work with have far more to lose than they have to gain by colluding with one another to corrupt consensus on the network. We have locked that into our one-to-one mapping of every node operator being a Hedera Governing Council Member.
Now, because we are on the long tail path of decentralization – though we still want it known that the Hedera Governing Council makes some decisions – it's our strategy that anyone should be able to run a node down the road.
We will get there by introducing community node operators, a new thing that we're going to have known — think of them as certified — node operators coming into the network that is not the same thing as a council member.
That's a way to get more of our stakeholders, community participants or application developers into the node operation and governance role.
Can you tell me about concerns or challenges that are present, as well as how Hedera comes into the picture to help solve those things?
Well, an obvious concern is the way governments reacted to the volatility we saw in 2022. Are they going to overreact? Are they going to misdiagnose the root cause of that volatility and provide a remedy that is a cure that's worse than the disease?
Unlike other initiatives, we built a stakeholder group of global Fortune 500 companies, including regulated banks. We believe our voice will be heard differently, and we seek to be a participant and help make sure that any reaction is fit to purpose, well-informed, and on target.
Can you discuss use cases that validate a lot of the things we’re talking about, today?
Avery Dennison Corp (NYSE:AVY) wanted to do something to help the world address climate change at scale. They created a startup of their own called atma.io, which has now been built on and is operating on the Hedera network.
That’s just the tip of the iceberg, however. It could lead to object identifiers for everything that's manufactured because they're already putting the labels on all those garments, shoes, as well as airplane parts.
We've got two other use cases involving tokenization, something that everyone who talks to us is interested in. So, it's the tokenization of carbon credits and offsets, as well as renewable energy credits. It’s also the tokenization of real-world assets like real estate.
What’s the benefit of tokenizing real-world assets?
By tokenizing real-world assets, we can democratize participation in the financial system. We’re taking an out-of-reach asset, and putting it in the investors' reach by turning it into much smaller, lower-value components that you can buy and trade.
The tokenization of real-world assets is another great project that Toko by DLA Piper is leading. They are powered by Hedera, and there is a synergy between the law firm and the tokenization technology. They're demonstrating that with their clients in the markets that they're in worldwide.
What is Hedera’s biggest differentiator?
It’s the way we're governed. We're also very collaborative with the competitive networks in that context around standards and policy. I seek to help this whole industry adopt the best practices by learning from the things that we're doing right.
Looking out into the future, where do you see Hedera fitting in and solving issues?
When a disruptive technology like Web3 comes along, and brings entirely new efficiencies by bringing a lot of that economic activity to a smarter infrastructure, that’s where we fit in.
Additionally, when it comes to the World Economic Forum, we’re helping address big challenges including the East-West division and reshoring, ESG and digital identities, for example.
There are nearly a billion people in the world who do not have a provable identity. That is where economic opportunity starts. Authentication and identity are critical for us to start pulling people out of poverty and improving the efficiency of the global economy.
Photo: Courtesy Davos