Latest posts by JP Antunes (see all)
Blockchain, the revolutionary technology powering Bitcoin, Ethereum, Banking’s (failing*) R3 consortium, the IBM-Maersk partnership, IBM, Walmart and Tsinghua University’s effort to bring safe food to Chinese diner tables and Microsoft Azure’s Blockchain as a Service offering – It’s in the news, in articles, book reviews and other materials floating around daily, however not much is said as to why do we need another technology revolution and how would the average professional can get started, contribute or create something new.
Whether you are looking to change the world, disrupt some industry or simply to think differently about an old problem with a new tool, we will need to start from the beginning.
Blockchain is a planet-scale distributed and secure database for digital assets.
I will spare the uninitiated, but enough is to say that it is no small wonder that some of the earliest known human writings are essentially ledgers etched in stone.
Why do we need another technology revolution
I think it’s obvious to everyone that ever since the Internet became an utility, most groundbreaking technologies have been developed for it, on it, by it. Cloud, mobile, e-commerce, social media, streaming, IoT and Big Data come to mind. The problem is that the Internet itself was developed on a series of technologies that were only ever designed to work on a relatively small scale and towards a very different set of requirements.
As an example, in order to visit a secure web page I need at least a computer, an operating system, a browser, a server for resolving the URL and at least a firewall, and a web-server with HTML, JS, CSS and a certificate issued by a third party that the guys who make my browser say I can trust. Actually, that’s not even the half of it.
The truth is we’ve been designing layer cakes for years now, and each layer is a snapshot of a simpler time, one whose requirements now seem modest.
Blockchain doesn’t require a central authority, or sharing of personal data or the existence of trust between peers, and it comes with networking, encryption, auditing, permissions and time-stamping by design. Unreliable networks are not a problem, nor is there a dependency on any specific external hardware, protocol, regulator or company. Imagine a server-less, name-less, blockchain and P2P based “internet” delivering original (and DRM protected, if you must) content to your device, as it is published.
Decentralisation, radical transparency, individual sovereign identity and trust-less cooperation, are all likely to irk some of those who still subscribe to XVIII century “wings” politics, that is a real challenge holding back our species. Personally, I prefer to think of it as approaching new problems with new paradigms, I want a jetpack, not wings.
These are product and design features that are unique (in this combination, at least) to Blockchain.
- Decentralised and distributed ownership model
- Trustless consensus, allowing “enemies” to cooperate for mutual benefit
- Tamper proof data store
- Immutable audit trail and non-repudiable transactions
- Append-only, write once read many ledger format
- Cloud-native scalability and fault tolerance
- Trusted Time-stamping
- Cryptographic signatures and P2P as part of the core architecture
When thinking about business opportunities for blockchain based solutions, I find it useful to focus on the capabilities of the tool instead of its name or the underlying technology itself, so that I’m not blinded by science and hype.
Case in point, if I was looking at a solution that required data to be modifiable, I wouldn’t consider making a frankenchain. If I was looking at a master data management solution for Industry 4.0 scale however, I can see a fit against the key challenges of scale, data ownership, lineage, privacy, availability and trust.
Using this approach, I’ll now look at some industry verticals whose key challenges seem destined for Blockchain based technology solutions and include any initiatives or companies worth keeping an eye out for.
Verticals in need of a revolution
- Key challenges include: arbitration, clearance, reconciliation, remittance, interoperability, trust, transparency, ethics.
- Watch out for: Bitcoin, NASDAQ’s Chain, Bitstamp for currency exchange and GridSingularity for energy trading, Ripple for international settlements, Stellar for the underbanked masses.
Government (and governance)
- Key challenges include: Privacy, confidentiality, cooperation with “enemies”, single source of truth, ownership and trust.
- Watch out for: BenBen is doing a land registry in Ghana, in Sweden it’s ChromaWaydoing the same. Estonia is still way ahead of everyone else though. Recruit can assure your educational credentials, because not everyone is a real brain-scientist or rocket-surgeon, but you might be and employers should be able to check.
- Key challenges include: Privacy, confidentiality, single source of truth, inverted economies of scale due to compliance.
- Watch out for: Estonia, USA (again), Gem Health and Phillips, Bits + Blocks Harvard Innovation Lab. Tierion won a Phillips Blockchain Lab award in this category.
- Key challenges include: Attribution, digital rights management, distribution, middlemen, counterfeit.
- Watch out for: Resonate for music, Ownage for videogames, Ascribe for art.
- Key challenges include: Privacy, confidentiality, single source of truth, trust.
- Watch out for: Synereo for social media output ownership, Backfeed for reputation management, Tradle for Know Your Customer, Uport for passwordless web authentication, while Authenteq and EtherRe.al are at the forefront of sovereign personal data.
- Key challenges include: Immutability, confidentiality, scale, security, trust.
- Watch out for: BigchainDB is probably where you want to start any PoCs relating to data management, Namecoin solves DNS for IoT and Industry 4.0 scales, Ethereumwill be the world’s biggest fog computer soon, Interledger is the best solution if you need to integrate multiple blockchains together. If you want to tackle PKI, Pomcoris a good place to start looking. Finally, you may want to look at Thunder if you are of the geeky persuasion.
- Key challenges include: Trust, transparency, risk, claims management.
- Watch out for: Digital marketplaces for insurance as well as P2P insurance startups, Tierion has some good ideas here too.
- Key challenges include: Ethics, sourcing, traceability, fraud, compliance.
- Watch out for: The IBM-Maersk partnership seems very interesting. Provenance is on a quest to end fraud and fight blood diamonds so they really deserve a mention, Chronicled aims at making retail supply chain more trustworthy or less sweat-shopy, if you prefer.
Recently, the Brasil meat scandal caused the country’s daily meet exports to sink from volumes of 63 million dollars a day to… 74 thousand dollars. Four million people have their jobs at risk and technology could help them. Amazon has a counterfeit problemthat could be solved with digital provenance tracking. A Blockchain based ID for goods, one that tracks provenance and assures products aren’t counterfeit, could help international commerce thrive, even with new border controls and restrictions.
I’m glad you’ve made it this far into this article. As a reward, I want to share some business ideas where the right team can make a real, meaningful impact using blockchain technologies. World changing impact.
Brexit – The City does some 70% of the euro-zone clearing for the EU. This will have to change due to Brexit and the UK’s decision to leave the ECJ jurisdiction. We could try to replicate current systems in a new country OR we could implement a bitcoin-backed international clearing and settlements system and change the world.
I’m talking about a market processing billions of euros a day that could be run from some datacenter payed for by all of our taxes in some nation’s jurisdiction vs a EU wide network of “miners” all of whom can be financially incentivised with transaction processing commissions to add compute nodes to the chain, so it’s a foundation for a Universal Basic Income that pays for itself and generates market value.
Digital Job Twins – Lack of serious domain expertise for the various fields of human activity is holding back blockchain development. Given enough caffeine and sugar startups can create magic, but it will be when accountants, dispatchers, logistics experts, economists, actuaries, and so on start getting involved that the technology will have the same disruptive effect on the job market that the internet had around the turn of the century. This is a job for #teamhuman.
I hope I spiked your curiosity and that I got you thinking about what aspects of your daily life could be transformed by someone just like you.
The logical next step is to allow all this new information to sink in while watching Blockchain in action. Think of the possibilities, dream big!
Credit for the video above goes to Anders Brownworth
* R3 would do good to consider renaming itself to E3, since their relationship with Blockchain seems to have followed the Embrace, Extend, Extinguish method. I believe that when IoT backed Thing-to-Thing payments becomes mainstream the current networks won’t be able to cope because 100k TPS network limits will simply not cut it. No offence to anyone in the industry, of course, it is simply my experience that the Financial industry doesn’t tolerate transformation gladly. It is an industry built on distrust after all.
- Mastering Bitcoin. The book.
- @Jamie Burke’s wake up call on the current state of blockchain startups.
- BigChainDB’s Blog. It’s worth it, really. Probably the first company blog I actually follow.
Thank you for taking the time to read my article. If you enjoyed it and think there might be others who will like to read it too, please like, comment and share this article to help it reach a wider audience within your own network. I will reply to comments and questions posed here and maybe we can start some valuable discussions!