Blockchain: It’s a technology, not a currency
By Edward W. Mandel
I’m a really happy guy right now. If you ask why, I’ll tell you that I’m generally an optimistic, contented fellow, even more so with a tumbler of good scotch in my hand if I’m on the road, or far more so in the embrace of my family when I’m at home. I have a good life.
But I also hold a lot of crypto. After a year of being happy by default, I’m now also happy because I got the last laugh on everyone who told me it was all a scam and the price of bitcoin was going to drop deeper than Leo DiCaprio at the end of Titanic.
That said, I’m still amazed that people think that crypto and blockchain are the same. They’re not. Crypto is enabled by blockchain, but so is a bunch of other stuff — stuff that can make running an online business easier and more secure.
It is database management. It is business software. It is growing into a global supercomputing platform. And at IOU.io, we are not in the crypto business. We’re in the ecommerce business, and we want all our stakeholders — customers, vendors, suppliers — to know that we understand how to manage blockchain for enterprise solutions.
One of the first tricks of the trade I learned is, you can’t fight uninformed people’s visceral reaction to the word “blockchain”. They think about all those ICOs last year that were either under-planned or ill-considered or just plain fraudulent. Then they think about the 2018 crypto crash. Something inside their heads hits The Big Red Button. So you’ll excuse me if I eschew “blockchain” and use “distributed ledger technology” or “DLT”. It’s like “Affordable Care Act” and “Obamacare”. They’re the same thing (practically speaking), but people like one and hate the other.
But what’s it for?
The Netherlands’ Vlerick Business School has identified around 120 use casesfor DLT that are already in production. Researchers Bracke Robin and Zhou Li, supervised by Professor Bjorn Cumps, group these into four main categories:
· general purposes,
· business purposes,
· social purposes and
· financial purposes.
There’s also a miscellaneous category, if you’re keeping score.
At the broadest level, DLT is great for registering things and proving ownership — everything to domain names to legal contracts to land deeds. This capability is directly related to its built-for-purpose feature of identity management — making sure that you have the credentials you say you have rather than you are who you say you are.
And once you’ve registered yourself and the things you have to sell, DLT is then a solid technological choice for selling them through self-exercising transactions — what we on the Ethereum blockchain call “smart contracts.” By the way, you don’t need ether to execute smart contracts. They’re possible on any blockchain, but they’re what Ethereum was built for and that’s why we decided to build IOU on that platform.
But as I said earlier, DLT is essentially a database management structure. One of its key features is that it distributes data in a non-centralized way so that there’s no “honey pot” to hack. It also uses cryptographic tools to maintain confidentiality. So it can give you a safe, secure environment in which to store and share data.
The business of blockchain is business
The most pervasive use of DLT in business right now is in supply chain. It’s particularly good at making every widget traceable and verifying it’s not counterfeit.
And before we push on into other use cases, let’s pause to appreciate what the Vlerick team calls “applications that provide a platform for exchanging payments for goods and services.” The Dutch academics see a future for a platform where businesses can share data and remunerate each other, games with fully fleshed-out economies with native money and a peer-to-peer marketplace. I wrote about the first two, and I’m the CEO of the third one.
It’s my firm belief that social media will be disrupted by DLT-native platforms. I have absolutely no question in my mind that’s going to happen. You want to know how I know? Because Snapchat disrupted Instagram which disrupted Twitter which disrupted Facebook which disrupted MySpace which disrupted Bolt which disrupted … what did I miss? How did people communicate in the 1990? Smoke signals, I guess. Another platform will come along next week and up-end the one that everyone was on last week. As the broader IT community comes to embrace DLT, then blockchain will become as-you-do. A DLT-native social media platform will eventually be the one with a billion or so people on it. But what will make it unique is its functionality and its user interface. The fact that it’s a dApp won’t even be newsworthy by then.
But before that happens, the encryption DLT lends to messaging platforms and the ease with which it facilitates reputation-based commenting systems will make it an integral part of the IOU experience.
I’ll just touch briefly on the finance category.
We’ve already discussed cryptocurrency, so the less said the better about that at this point. The most important financial use case for DLT on our platform is the speed, accuracy and frictionlessness with which it handles the payments process. Yes, I know all about those studies showing that crypto is orders of magnitude slower than paying with Visa, but let me push back gently on that. Those comparisons are generally made between Visa and Bitcoin, which has a clunkily large block size and a proportionately long transaction time. Ethereum is much faster. It’s my goal to have our utility token, IOUX, move even faster than that. It still won’t be nearly as fast as Visa, but so what? I can’t experience the difference between a millisecond and a microsecond. Can you?
What can go wrong
While DLT can do a lot of things for an ecommerce company, all of its benefits are predicated on the developer community solving some pressing issues.
Reliability is the key, though. Blockchains can be disrupted on purpose — as with forks both hard and soft — and through malice — double-spending and 51% attacks. And let’s not forget that on private networks, such as those that might be developed by online retailers, you’ll have a limited number of nodes to build consensus. Odds are, you’re not going to have an entire village in the Czech Republic hashing for you. By the way, preventing the hack is one thing. It’s just as important to have a well thought-out and rehearsed procedure for recovering from security breaches.
Aside from reliability, though, we have to remember that the pseudonymous nature of the DLT is not an unabashed good. Yes, we at IOU — and the blockchain space at large — believe that it solves more problems than it causes, but only the willfully blind would say that it doesn’t cause any problems at all. At the very least, it attracts regulatory scrutiny, so canny e-tailers will have a full list of potential regulators whose attention they might incur — as well as a good story to tell them about how they know they’re not being paid with money made through illicit drug or arms deals. On a more upbeat note, they will have a good story to tell about customers’ data privacy baked into their DLT infrastructure.
Are you with us?
Personally, I can’t wait to start calling blockchain “blockchain” again. “DLT” sounds like a pesticide or a deli sandwich.
We at IOU.iorecognize that you, the end user of the technology, don’t care what it’s called as long as it works. If you have to call it anything, that means it brought attention on itself, and that’s almost never a good thing.
So we aim to build you an ecommerce platform that will fully use blockchain in every use case for which it is best suited. You’ll know we succeeded if you’re still wondering if we succeeded.
Edward W. Mandel is a strategic advisor for IOU.io , he is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and ICO projects and recently launched his own BQT.io P2P Hedge Exchange helping traders connect with each other to leverage their crypto assets.
IOU is a blockchain-based peer-to-peer platform designed to unify ecommerce transaction and customer retention processes, incorporating trade-able IOUs. It is currently raising capital through ICO. The platform can be found online at IOU.io and its community on Telegram at https://t.me/IOUCommunity.