The Chocolate and Peanut Butter of the Tech World

How blockchain and AI are solving real business problems

Ric Edelman: It's Friday, February 9th. Coming up on today's show, it's an election year, a really important one. And among everybody's fears of election fraud, is blockchain the solution? First, if I were to ask you to name the two biggest investment stories of the year, what would you say they are? I'll bet you can name them, crypto, thanks to the new spot bitcoin ETFs the most successful ETF launch in history, and AI of course. But did you know that within both the crypto and AI communities, their biggest excitement is about the merging of these two technologies. Talk about chocolate and peanut butter. If they pull that off, it'll be massive for both of them. The entire conversation is around one thing -  authenticity. We all know the biggest fear of AI that it makes it really easy to create fake information.  

Last year, when ChatGPT was new, I produced a podcast that was written by ChatGPT, and then I had the script recorded by another AI program that produced the script in my voice. The whole thing took me less than five minutes and cost me $5. And when I played the podcast, nobody knew it wasn't me, including my producer who's been with me for 30 years. He even took my wife, Jean 30 seconds, to realize something was off, but she didn't know. What if you missed that [April 11, 2023] podcast, by the way, that I did a year ago, the link to it is in the show notes. Go listen. It's spooky. And that was a year ago. Since then, I has only gotten more powerful.  

Today, you really can't know if an article or a photo or a video is genuine. You know that somebody posted a bunch of fake porn videos of Taylor Swift. How long will it be that we start seeing videos of Trump and Biden saying things they never really said? Or are you getting robocalls from them that aren't really from them?  

But there is a solution to deep fakes. And a lot of technologists are saying that the solution is bitcoin. A key feature of blockchain technology, which is the underlying technology that allows bitcoin to work, the key feature is that it is a transparent database and it's tamper proof. If you post data onto the Bitcoin blockchain, the data is permanent and it's timestamped. Everybody can see it and everybody knows when it was posted, but nobody can copy it or edit it or delete it. It's impossible to post a deep fake on a blockchain and fool anybody.  

Another problem with AI is bias. The AI provides information and evaluation, but it's doing that based on the code that created it. And that code was written by a human. If you have an unconscious bias, you might embed that in the code. As a result, an AI-powered chatbot might push you to a particular product or to a certain political party. Companies are using AI, for example, to decide who to hire. But what if there's bias in the code?  

Blockchain networks are now starting to be developed to solve this problem. One addresses AI bias by incentivizing diverse models to vie for the best responses. Validators reward top performers and eliminate biased ones.  

Another huge problem of AI, which I've mentioned to you before, is that it's a real energy hog, performing trillions of calculations, which is what AI does, takes massive computer power. And the cost of building the data sets and storing all the information in the cloud, it's crazy expensive. The result is that only a few huge companies can afford all this. That's why you're seeing Microsoft and Amazon and Google all over this.  

But decentralized computer marketplaces like Akash and Render let you spread the computing requirements and the storage demands onto computers all over the world. You can actually get paid to let them use your laptop when you're not. You know, you're going to see a lot of innovation coming out of AI. You know that. Well, now get ready for a lot of innovation in crypto as well to help AI do its thing. If you're bullish on one of these technologies, you now need to be bullish on the other one too. 

Hey, let me take a minute to specifically talk to the financial advisors who are listening to this podcast. Are you interested in getting more clients growing your AUM? I've got something that'll really help you. Our Wealth Management Convergence. This is a live in-person conference. It's going to be West Palm Beach March 10 to 12, and it's focused exclusively on giving you the investment strategies you need today, all the vital topics that matter. Right now, you'll learn about generative AI, exponential technologies, the latest on longevity, estate planning, crypto a whole lot more. You'll also get to network with some of the biggest and most successful people in this business. Some of the most successful advisors in the country will tell you how they did it, and I guarantee you won't miss a thing because every session is main stage, no breakouts and no sleepy PowerPoints. They're not allowed. Plus you get plenty of CE credits, Wealth Management Convergence. It's exclusively for financial advisors and RIA firms. No fund companies, no product providers can register. So if you're a financial advisor, join me at Wealth Management Convergence March 10 to 12, in West Palm Beach and connect with fellow financial advisors just like you. Register right now and I've got a promo code for you exclusively for advisors listening to this podcast. Use the link in the show notes to register. Use the link in the show notes to register and enter discount code WMC2024. You'll save 100 bucks.  

-----  

Is Blockchain-powered Voting Coming to Your Town? 

Exclusive Interview: Nimit Sawhney, CEO of Voatz

Ric Edelman: Well, here we are, 2024. It's an election year, and I don't know about you, but I don't think anybody is really looking forward to it. And I'm not talking about the divisiveness of the political campaigns and the US versus them and the Trump versus Biden or whatever. I'm not talking about that. That's a thing. That's a huge thing. And yeah, that's there. But the reason I'm not really looking forward to the elections, I'm concerned about the attendant accusations that I think are going to prove to be inevitable over allegations of voter fraud. We saw how divisive this was in 2020, and I am fearful that it's going to be even worse in 2024 as we go through the primary season and ultimately the general election in November. Isn't there a better way that we can be managing our elections, that we can be assuring the right of every qualified American to vote, to secure their vote, to record their vote, and to tabulate the results? Well, guess what? There is. And to help us talk about this, I'm very happy to welcome onto the program Nimit Sawhney. He is the co-founder and CEO of Voatz. That's spelled V-O-A-T-Z; VOATZ. Nimit, welcome to the show.  

Nimit Sawhney: Thank you, Ric for having me here.  

Ric Edelman: So Nimit has been running elections. He's done more than 130 of them in six countries. And what is fascinating is that he's been using blockchain technology to do this, including a mobile app voting project in West Virginia in 2018. In 2022 Voatz was used by 15 cities and towns in Canada, where they were the first blockchain-backed public elections in Canadian municipal election history. Nimit has a graduate degree from Carnegie Mellon in computer science. He was in the Young American Leaders program at the Harvard Business School. So Nimit, I'm really excited to be talking to you about this. The first question I need to ask you is, why voting? I mean, you've got a master's in computer science and you decided to focus on voting. Tell me your story. Why voting? Why is that a big deal to you?  

Nimit Sawhney: Yeah. It was somewhat of an accident. My brother and I were participating in a hackathon competition a few years ago, and the theme of the hackathon was hack to the future. What's  the one thing you would do in the future and how would you do it? And what really intrigued us at the time was the prize money. They had the usual prizes and they also had a bitcoin, which got us to read the paper. We were very intrigued and figured this could be a good way to ensure data security and tamper resistance. And so we ended up prototyping a completely new election system from scratch that utilized smartphones, biometrics, and the blockchain. And to add a surprise, we ended up winning the first prize. That led to a series of events and leaving my job. And eventually we started Voatz. So it was quite a bit accidental. If we hadn't been to the hackathon, we probably would be here.  

Ric Edelman: But why did you focus on voting? I mean, you could have done a whole bunch of different things with blockchain technology. Why voting?  

Nimit Sawhney: So it was a little bit of a childhood experience as well. Both my brother and I grew up in India, and during the 80s there were religious riots. The prime minister was assassinated and a lot of unfortunate things happened. Fortunately, our family survived, but soon after the elections for the prime minister were held, we saw some incidents where people were being coerced to vote. So being very young at the time, those images were stuck in our head and we didn't really know how to process them. But fast forward, many years ago at this hackathon, the ideas clicked together and the thought that, wow, this approach of using a tamper-resistant, immutable store of data could be beneficial beyond the monetary use cases that are largely prevalent. And so those two ideas kind of came together and we decided to jump in an unexpected way.  

Ric Edelman: So why use blockchain technology to build a voting system? How does blockchain help?  

Nimit Sawhney: So for the entire voting process, particularly the digital voting process where technology is employed, there are several phases. You have the phase before somebody votes, then the act of voting and then post voting. Traditionally, if you would utilize a standard database and you have everything in one place and you have someone who has superuser access, which means it's a single point of failure, or from an attack perspective, the blockchain becomes very, very useful in that kind of a scenario where now you have a distributed store, encrypted digital ballots that no one can tamper with, no one can attack and destroy as a single point of failure. No government has the ability to manipulate that. No third party has the ability to manipulate that. So it becomes incredibly powerful, solves one of the biggest challenges of digital voting infrastructure. And add to that, it offers newer auditing capabilities and brings a whole new level of transparency. So let's look at the traditional way of voting when you vote on paper. When you submit your paper ballot on the machine, you have to trust the process after that because you have no way of finding your paper ballot once it's gone into the machine. On a digital system, it now let’s voters, for the first time, audit their ballot end-to-end, so you can be assured your ballot was counted by 8 p.m.. Every citizen can do this, or a subset of citizens can do this. So from those two perspectives, we feel blockchain adds a lot of value to improving the existing process.  

Ric Edelman: So talk about the first election you did.  

Nimit Sawhney: So our very first government election was the state of West Virginia way back in 2018, in the midterms, a couple of counties, a very small number of voters from the military, 20 voters. They  became the first group of people in American election history to vote using an app-based system. So they had to scan an ID, take a selfie in the app, and then, once they were verified, they would get access to the ballot, mark the ballot sign, just like you would the outside of a paper envelope. And then the ballots are digitally submitted, stored on the blockchain. And come election day, your clocks are able to unlock the lock box, actually print out paper ballots which are then tabulated just like any other absentee ballot. So it was a very, very, I would say, game changing project, a small step towards improving and modernizing the overall infrastructure.  

Ric Edelman: And since then, you've done 131 of elections in six countries. Has there ever been any accusation of the technology not working or that the voting being improper?  

Nimit Sawhney: Not so fast. Each one of our elections has been very successful. There have obviously been a lot of attacks, which is fairly normal for any system that's online. But no one has successfully managed to tamper with even a single oval on the ballot. A lot of the voters who use the system are auditing. In the last election, we had 47% of voters check their receipts and audit, which is a great trend and we believe can help increase confidence in the overall voting process as well. But yeah, so far we've managed to keep the system safe and secure and staying ahead of the curve from a security perspective.  

Ric Edelman: So you mentioned a small election back in 2018, in West Virginia. That’s not let's face it, the most populous state in the nation. But now since then, have you done voting in a presidential election?  

Nimit Sawhney: Yes. So the system was used in the 2020 presidential elections as well in Utah and in Oregon, once again, it was limited to military voters and citizens. Overseas voters with disabilities were also able to use the systems.  

Ric Edelman: That raises an interesting question. My first reaction was, I've never heard of this. How come if you've done this 131 times over the last couple of election cycles, how come nobody's ever heard of this? And you just mentioned that there are very limited criteria for people eligible to use your technology. You said military personnel, Americans outside the United States, people with disabilities. Why only those groups are able to use your software.  

Nimit Sawhney: So in the US, the elections are governed by the states. So the federal government doesn't actually conduct elections. So every state has its own election code. And almost all of them do not permit the use of digital technology to return their ballots. The only exceptions that have been permitted in the past have been for military voters. They have been in some states allowed to return their ballot by email or fax, none of which is strictly a secure or private way to return your ballot. Mail is often inefficient for them, given their location and you know where they are. So it's about 5 million people around the country who are affected by this. So our approach towards launching this was. if you start on day one and say you're going to replace the whole system, I think it's not a realistic approach, especially with a sensitive technology like this. So starting small and starting with the demographics who need the most help using a system like this, that was kind of the idea. So with West Virginia taking the lead and now some other states as well, that's kind of been the approach, the law has been in a few states, minimally modified. So Utah being the first one which modified its laws so voters with disabilities could also take advantage of the system. And then some states next year might allow first responders as well. So slowly, the number of people who are eligible is increasing. But it's still very, very small.  

Ric Edelman: Given the legal restrictions, I imagine that these laws at the state level have largely been written a long, long time ago. The fact that they're allowing faxes, that was probably a big deal when they wrote that law. But when's the last time you used a fax machine? So I think that this is a wonderful example of we've got to update these laws to keep pace with current technology. And so I would hope that over time, these laws will get updated and blockchain based voting technology will be permitted. Just like one day a long ago they said yes to faxes.  

Nimit Sawhney: Absolutely. And other countries are taking the lead. So Canada, our neighbor to the north, is a very good example. Their municipal election law in the province of Ontario, which is the biggest state, actually allows cities and towns to innovate. And that was one of the reasons several of them selected us last year. Similarly, Estonia is a world leader. Philippines is trying to do something similar, as is Mexico, a few other European and South American countries as well. So there's progress happening around the world. Some countries are moving faster than others.  

Ric Edelman: Yeah, I can imagine that every legitimate democracy would love this because it eliminates the question of voter fraud. And it also makes it faster, cheaper, safer, easier to run an election, which everybody would be in favor of. But at the same time, I can't imagine Putin welcoming your technology into Russia now that he says he's going to run for another firm. So if you're a despot, if you're an authoritarian government, I can't imagine that they'll be terribly interested in this. But if you're a legitimate democracy, I got to believe there'd be a lot of enthusiasm about this. Have you run into roadblocks or obstacles or objections, or have you run into government officials saying, no, we don't like this idea?  

Nimit Sawhney: Yeah, there have been a fair bit of pushback, I would say more coming from the academic community. There is fear about the internet. And that leads you to a road that you shouldn't do anything sensitive on the internet, which is not really true. A lot of sensitive transactions are happening on a daily basis, and so there is a way to do stuff safely, to follow certain best practices. And you can do anything safely on the internet. So voting as well. So it's a lot about changing hearts and minds as well. And there have been election officials who have sort of been brave and have taken the leap. So, West Virginia is a good example. Counties in Utah and Oregon are good examples. So it requires a few brave election officials to kind of take that first leap and then, other people who don't want to be the first mover, will follow, because now there's enough of a proof point out there that it works, it's safe enough, and it actually helps people, reduces costs, is more auditable, still can produce paper. If you want to have paper, you can still have paper. So it's the best of both worlds. So you're right, it's a slow process, but it only takes a few initial brave souls. And I believe that kind of initial momentum is happening now.  

Ric Edelman: So clearly a big obstacle is the law itself. You've got to get laws changed in each of these jurisdictions to permit the use of the technology. How do you accomplish that? I mean, you're a small little company startup business doing this. I can't imagine you can amass the lobbying machine to go into 50 state legislatures and persuade all of them to change the laws. So how do you see that happening? Who's going to champion this for you?  

Nimit Sawhney: Yeah, that's the big challenge. We certainly don't have the resources to lobby in all the states. Our approach has been to collaborate with the election officials because they are kind of the champions on the ground. They are the buyers of the of the technology. So in several states, our approach has been to pitch to them, do pilots with them, show them how it works and the benefits amount of money they save, the cost, how efficient it is. On election night, they can actually go home at 10 p.m. and not at 2 a.m., so that helps. And then they take that evidence to their state legislatures and then, laws get modified. So it's a slow process, certainly not going to accomplish it very quickly. But spreading by word of mouth has been helpful for us.  

Ric Edelman: Yeah. That would seem to make a lot of sense to me that the election officials are the ones who are the users of the product, really. And if they realize that this allows us to operate the election faster and cheaper and most importantly, bulletproof, meaning we don't have to worry about election frauds, people stuffing ballots or throwing away or dealing with chads and all that nonsense. They're able to go to the Secretary of State and to the governor and to the legislature and say, this stuff is fabulous. We need to broaden it. Let's not just make it available to military and Americans overseas and folks who are disabled. Let's make this available for every resident in our state. It'll just eliminate the risk of all the election fraud allegations that were so pervasive in the 2020 campaign. So yeah, I can see how they would be big proponents for you. And the legislature's reaction will be on top of all those benefits, it saves us money. What's not to love? So I do think that you're going to find a snowballing effect. As you pointed out, nobody likes to be first. Everybody likes to be second. And so you'll eventually get there. But the key word there is eventually. How long do you think it will be before this is generally available to most Americans in a presidential election?  

Nimit Sawhney: So I'm an optimist. Otherwise I wouldn't be doing this. I really feel that 2028 is a realistic possibility. Obviously in 2024 as I said, smaller group of people will have access. And we think 2026 in the midterms, slightly larger group of people will have access. But 2028, there’s a very realistic possibility that some states will have this as an option for everybody in addition to in-person voting and voting by mail. So we don't think anybody should be forced to use this way of method. I think it's good to give voters a choice. So somebody still wants to vote in person at the polling station. They'll still be able to do that. Somebody wants to vote on the phone. They should have that choice. So but 2028 is my guess. And things are changing in other parts of the world much faster. So I think that will also help influence some of the legislation here in the US.  

Ric Edelman: Do you have any competition? Are there any other companies developing similar technology?  

Nimit Sawhney: So in terms of the whole package of utilizing native mobile application biometrics, real time proving, using the blockchain, still being able to produce paper ballots and giving every voter the ability to audit, is pretty unique. There is competition, what we call the traditional online voting players, people who have web-based portals where you can go online, log in and vote. Obviously, they don't have the level of security or the auditability we are offering. There are a few companies who are doing that. But in terms of our approach, using an app using the blockchain, we're pretty unique right now.  

Ric Edelman: If folks are watching this conversation, listening to this conversation, want to help with your initiative? How can they do that?  

Nimit Sawhney: Yeah, we would definitely love some help. One of the things that would really help us is citizens writing to their local election clerks, county clerks, state election directors to amend laws so that our system or a system like ours, technology like ours, can be made available to a wider group of people. That really, really helps the voice of the citizens. The second approach is we are going to be launching a national initiative where everybody can use the system and vote in an exit poll. And so that's another way for citizens to help, obviously, you have to work twice, one using your existing way of voting and another time using the app. But that's going to really help create momentum, get everybody an opportunity to use the system.  

Ric Edelman: So in other words, people would vote the normal way and then they would go on to your app and vote again. That's not a real vote. That doesn't count in the election, but it replicates the process so people can see how the technology works, get familiar with it, and more importantly, you'll be able to tabulate their second vote. It's really more like a poll, so you can track what's happening in the election very, very quickly and accurately.  

Nimit Sawhney: Absolutely. It would become the most accurate, real-time poll in the country. And you get instant results as soon as polling window closes. And we feel like that could benefit a lot of people and give people a feel for the whole process. And another thing I'd like to mention is if you're registered to vote in Florida, the system's already available for voters. In Florida, all 15 million registered voters can actually go to the Digital Democracy Project.org and vote on bills. So Florida has this unique initiative is run by a local nonprofit where every registered voter can vote on any of the bills that come into the state legislature. So it's a slight variation of voting in an election but still gives citizens the voice. And so if you're in Florida, I would encourage you to give that a try as well.  

Ric Edelman: And we'll have the link for you. It's in the show notes right now to both the initiative in Florida and to Nimet's website at Voatz.com, so you can explore all of this further. This is really fascinating. I think it is long overdue. It's a wonderful example of the innovative uses of blockchain technology, which are revolutionary in its impact. And I think this is one of the most important social projects that we can come up with for this technology. So I wish you the best with this Nimit and I will be tracking this closely myself. That's Nimit Sawhney. He is the co-founder and CEO of Voatz. Voatz and the link to Voatz is in the show notes. Nimit, thanks so much for joining us on the show today.  

Nimit Sawhney: Thank you so much, Ric. It was my pleasure.  

-----