A Conversation with Joel Telpner about Central Bank Digital Currencies (CBDC), Blockchain, Career Advice and More!
(Listed below is an edited transcript of Joel Telpner's conversation with Dan Carmody)
Dan Carmody: Hi. Welcome to another episode of FinTech Intellects in-depth interviews. My name is Dan Carmody and I'm the Executive Director of TreaSolution and I'm really pleased to be joined today with Joel Telpner, who is a senior partner with Sullivan & Worcester, which is a law firm based out of Boston. But I believe Joel works out of New York. So welcome, Joel. Thanks for joining me today.
Joel Teplner: Thank you. But I thought you were supposed to be talking to fintech intellects. So, I'm not sure I should be actually participating in this, but I'll do my best.
Dan Carmody: Well, I would beg to differ. You are in charge of the fintech and blockchain practice at the firm… so you qualify. So thrilled to have you on the line today and to talk with you. Joel, tell me a little bit about Sullivan & Worcester and specifically what you do for the fintech and blockchain practice.
Joel Teplner: We are a global law firm, a mid-sized law firm that started in Boston. We have offices besides Boston, New York, Washington, London and Tel Aviv. I run the FinTech and practice group for the firm and it is a corporate practice where the focus of the clients that we work with are primarily folks that are doing things in the fintech space. A lot of what I do involves a lot of startups or early stage companies that are looking at blockchain technologies and looking at how they can reinvent or change the world or do things differently using blockchain.
A lot of the activity or focus on blockchain happens to involve financial services and there's a strong correlation between financial technology or fintech and blockchain. The common denominator is looking at new technologies and how we can disrupt the way people do business right now using blockchain and related types of technologies.
Dan Carmody: That's great. Would you say that your clients are primarily financial institutions, startup services, a combination of all of the above?
Joel Teplner: Some of the clients are just early stage companies that are trying to come up with new technology products were blockchain may be playing some type of role. Some of the clients are private equity or venture capital firms that are looking at investing in the space or are looking at using what are called "Digitized Tokens" to actually go out into the market with their own fund interest, but in a new form. Some of the clients are what I would call intermediary service providers.
People are trying to create things like trading platforms or exchanges for the blockchain space. And then we have some government clients. So, it's really diverse because you've got a lot of different players looking at how they can use blockchain for all kinds of different reasons. So that makes it both fun and challenging because every day tends to be different from every other day.
Dan Carmody: You and I started talking a few months back. You submitted a presentation to be a speaker at the upcoming U.S. FinTech Symposium. For everyone that's new to FinTech Intellects, TreaSolution produces the U.S. FinTech Symposium. I'll put a link down below in the description for people who are interested in viewing that website. You and I started talking about speaking at the event and you were going to talk about Central Bank Digital Currencies (CBDC) which is a really hot topic. Can you tell us a little bit more about what they are, what are their use cases and things along those lines?
Data is critical to finance.
Many people are familiar with the concept of encryption. The basic idea is that before data is sent over the internet, it is scrambled. The receiving party can un-scamble the data using an encryption key. The vast majority of time this systems works well because the encryption key is a very large semi-prime number (two prime numbers multiplied together.) Click here to read more about encryption.
One of the weak-points of traditional encryption is the semi-prime number key. If an organization intercepted the scrambled data and had a super-computer handy, they could try to determine the encryption key by multiply random semi-prime numbers together until they found the key. Even then... this would take a long time.
Quantum computing changes this entire situation. Quantum computing uses physics to create computers that are exponentially more powerful than today's traditional supercomputers. According to industry experts, quantum computers can break traditional encryption instantly.
How? Quantum computers are unique... they operate at close to absolute zero, they use Qubits and they have multiple computing states. Were traditional computers utilize only two states (one and zero) to conduct calculations, quantum computer use qubits which leverage quantum superposition. This means that two or more qubits can work together and have multiple computing states such as 00, 01, 10, 11... The best part is that qubit can be one, many or all of these states at the same time. This is the break through.
Furthermore, each additional qubit doubles the quantum computer's computing capacity... 2^2 = 4 states, three qubits is 2^3 = 8 states, four qubits is 2^4 = 16 states, and on and on.... (click her to read more) As of January 25th, 2019, the most powerful quantum computer has 79 qubits... 2^79 = 604,462,909,807,314,587,353,088.
In order to protect against semi-prime key encryption hacking, Jeremy Kahn of Bloomberg reports that several financial services firms are test a new form of encryption called quantum key distribution. This type of encryption does not rely on semi-prime number keys and it can detect if someone is attempting to intercept the transmitted data. It's worth your time to read Jeremy's article titled, "The Super-Secure Quantum Cable in the Holland Tunnel." It's a very interesting read.
It's clear that quantum computers are a threat to traditional encryption methods and can also provide a potential solution with quantum key distribution. So, can quantum physics make finance more or less secure? Perhaps the answer is, not unlike qubits, both simultaneously.
What are your thoughts? Please comment below. Thanks.
About the Author
Daniel J. Carmody, CTP is the Executive Director of TreaSolution and a faculty member at Northwestern University.
TreaSolution is a corporate finance consulting and training company headquartered in Chicago, Illinois. In addition to providing strategic finance consulting services, TreaSolution regularly hosts professional education training events such as the Treasury Boot Camp and the U.S. Fintech Symposium. At Northwestern University, Dan teaches a high-rated Certified Treasury Professional course.
Dan Carmody, Executive Director of TreaSolution, provides a one-minute update pertaining to the new developments observed at the AFP 2018 conference. Dan discusses the importance of new fintech technologies that are affecting the enterprise finance industry. Some of the main fintech technologies on display and discussed in sessions were robotic process automation, APIs, real-time payments, real-time reporting, machine learning, AI and more.
What enterprise fintech technologies are you most interested in? Are you aware of any new technologies / companies that are providing unique enterprise fintech solutions?
There's a lot of hype in the fintech industry....
It tough to hear the fintech signal from the noise. The Fintech Intellect aims to elevate our collective fintech conversation by publishing informative blog posts, linking to interesting articles, listing thought provoking videos, providing information about fintech events and more!
Fintech is a general term. So, what topics will the Fintech Intellect focus on? Topics that are practical (no hype) and have (will have) a material affect on the finance industry. Blockchain? Yes. Automation? Yes. Machine Learning and AI? Yes. APIs and Open Banking? Yes. The Fintech Intellect is open to discussing a wide-range of fintech topics as long as they are fact-based and provide practical, meaningful information.
Let's elevate the fintech conversation together. We are currently seeking fintech thought-leader as guest bloggers. If you have an innovative fintech idea, video, research paper or case-studies, please Submit an Idea so we can schedule a time to talk.
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No hype... just intelligent conversations about financial technology.