Sajida Zouarhi: "By giving power back to the citizen, blockchain constitutes a common good"

Since there is nonsense about blockchain subjects such as Gravelotte, Corentin Luce spoke with Sajida Zouarhi, an engineer who is one of the 40 most influential women in France in 2019 according to Forbes.

An exclusive interview with Sajida Zouarhi, directed by Corentin Luce.

Sajida Zouarhi began her career as a research engineer at Orange Labs and at the Grenoble Informatics Laboratory. She co-founded several projects and platforms in the field of blockchain, and worked at Consensys, one of the leading companies in the field. She also became a technological strategy advisor at Nomadic Labs, a Tezos protocol R&D center. Currently she is developing her educational platform for the general public: Blockchain Mentor . 

What is blockchain and how does it constitute a major technological breakthrough?

The blockchain makes it possible to create a collective, transparent and incorruptible source of truth. It can be seen as a distributed transaction ledger that is collectively maintained by a community of actors, without the need for the intervention or authorization of any central authority.

Blockchain is a design philosophy. The term “technology” is too restrictive because we also observe with the blockchain a change of economic and social paradigm . We must understand these three dimensions to properly understand the innovative nature of the blockchain.

How can blockchain reinvent relationships of trust?

Blockchain allows people to cooperate without prior trust. If they are happy with the service, users can choose to trust the company or the team developing an app. Today the system works backwards, when you want to use a service, you have to trust by default and accept all the conditions. The user has no choice.

Blockchain is a way of designing both computer and human systems that make decentralized governance possible. This helps to create more transparent and efficient cooperation, sharing and value transfer frameworks.

Is relying on a third party when concluding a transaction necessarily negative? Doesn't blockchain risk fostering widespread mistrust?

Mistrust is already there, with regard to certain institutions and intermediaries. More and more, citizens are dissatisfied with central authorities that have become too powerful or too greedy. In this sense, the blockchain does not lead to more mistrust, on the contrary: it allows actors who do not trust each other to work together.

If we take the example of the banks in which we invest our money: we are totally excluded financially from this market. But we know that money does not sleep, the banks make it work. Where is the result of this work to which we have contributed by immobilizing our capital?

The meager value our savings generate is only reflected in ridiculous rates that do not even offset inflation. So we are told that the bank secures our money, it's true, at least when everything is going well.

In an economic crisis, the banks will protect each other and, if necessary, turn against us. Today our savings beyond a certain threshold (100,000 euros) can be tapped to save the banking system which is based on a pyramidal dynamic, very fragile in the event of a systemic failure. The savings of the people are the safety net of the banks. Uni-directional solidarity.

Take the example of the 2008 crisis, citizens were denied the right to withdraw their savings from their bank. This means that unless we have cash under our mattress or cryptocurrencies, we do not own our money.

However, blockchain does not mean the death of intermediaries, but the signal that they must take a more moderate place in the value chain. A place that really corresponds to the services they provide.

Are you not worried that blockchain implementations like bitcoin will be monopolized by large groups already well established like Tesla or Facebook, especially since the number of bitcoin is limited?

This is indeed the greatest challenge facing us today. The blockchain like crypto-currencies are only tools and have no intention. It is up to the group that uses them to attribute an impact to them, positive or negative.

If crypto-currencies are monopolized by large companies, we will move away from the promise of individual emancipation. If this were to happen, the war of sovereignties between states and private corporations, already underway, could be taken to the next level.

In recent months, the biggest movements in the bitcoin market have come from private corporations like Tesla or Micro Strategy. And again, this is only the tip of the iceberg! The risk is that in reaction to the increase in the price of bitcoin, small owners sell their precious bitcoins to big companies for profit, which is obviously understandable but, in the long term, not very strategic.

The real danger is not realizing this risk and missing out on this opportunity for financial freedom that Bitcoin offers us. Like the inmate locked up for so long that when the door is opened, he refuses to take the exit.

How does France welcome blockchain and bitcoin?

There are forces pushing in the opposite direction. In France, we hear a lot of people like Bruno Le Maire who make links between crypto-currencies and terrorism, trafficking and money laundering… This is the meaning of an order passed on the sly to regulate crypto-currencies under the pretext of terrorism.

First, this link is misleading when we know that a tiny part of the crypto is used for illicit purposes - less than 1% according to Reuters .

In addition, the blockchain is a formidable tool to fight against criminals as recently proved by the ChainAnalysis report on which the FBI relied as part of its investigation into the Capitol Assault of January 6, 2021. A French had made a transfer in bitcoins worth $ 500,000 to members of the American ultra-right which made it possible to trace all the individuals involved.

This is all the power of the blockchain and, in this specific case, of the Bitcoin protocol. It is a surefire way to track money transactions and no one can corrupt the ledger.

So there is massive disinformation to convince people that holding bitcoin is holding criminals' currency. These discourses slow down and discourage awareness around bitcoin in France and other blockchain implementations.

ADAN and other players in the ecosystem are working so that France does not miss the boat of crypto-assets as it had already missed that of the Internet with the Minitel. This is the spirit behind the hashtag # 3615Crypto that spread on Twitter following Bruno Le Maire's comments.

How do you avoid disinformation around such complex subjects?

There are several biases but the main one remains education. When according to the government 85% of the French have no financial education, there is something to be afraid of! Before talking about bitcoin, we must therefore review many things, such as the three main functions of money: a unit of account, an intermediary of exchanges, a store of value.

It is said that the value of bitcoin is based on nothing, but what is the dollar based on today since the gold standard and then convertibility have been abandoned?

I remind you that almost 20% of all US dollars ever issued were created last year. This is proof that the system is in freewheeling mode and relies only on the perceived power of States.

These same states which, to everyone's surprise, have been hit hard by the health crisis and are not, obviously, untouchable. Money has always been a social illusion. Whether it's dollars, euros, or bitcoins ... it's the people who place money on value.

In this sense, virtual currencies are just one more change in the form of money. The real revolution is that we can create a currency without a central bank or state and thus restore power to citizens.

Disinformation is now orchestrated, or at least encouraged by actors who have an interest in ensuring that public crypto-currencies do not develop and that digital currencies issued and therefore controlled by central banks become the standard.

What about the ecological impact of bitcoin? 

This is a question that encompasses all digital spheres. In the implementation of the Bitcoin protocol, we have a mechanism used to support consensus which is the proof of work . As it turns out, the math behind this proof of work is energy intensive.

First part of the answer: there are other blockchain protocols that are not because they use different mechanisms. Regarding bitcoin, there are several options to reduce its energy footprint: we can use renewable energies to power the bitcoin network; people are also thinking about reusing the computation that secures the bitcoin protocol for scientific computing; others recycle the heat created by mining.

It is not, in my opinion, to stop spending energy but rather to ask: for what purpose is it consumed? The value that the Bitcoin protocol brings to humanity is immense. The energy necessary for its operation is in no way wasted since without Bitcoin in 2021 we would have no alternative to the traditional state monetary system.

In this sense, the Bitcoin protocol is a common good.