Is blockchain a solution looking for a problem? No.
By Edward W. Mandel
Now that cryptocurrency is going through the throes of Bear Market II, it’s become increasingly important to explain to people the difference between coins that are traded for their speculative — and sometimes sketchy — value, and ones that are actually being used for the purpose that they were designed for.
On the IOU.io team we certainly want to get our IOUX tokens in the hands of those who stand to benefit from them most directly. In fact, with mere days to go in our ICO period, we’re putting that effort into overdrive. That said, these coins are intended to build a community around our revolutionary new concept in ecommerce. They express participation in loyalty programs, gateways into rating scales, admission into communication platforms and tickets into a new payment method that allows you to create your own tradable notes, bypassing both central banks and credit card companies — saving you money in the process, of course.
Beyond that, distributed ledger technology, which undergirds cryptocurrency, has an inexhaustible number of potential applications to solving real-world problems — and a lot of those problems live in ecommerce.
Right tech, right time
The starting points, of course, are fraud prevention and data security.
We’re kind of at a disadvantage explaining that to the average, non-technical individual. All they got to go on is what they gather from the news, and the news doesn’t cover fraud prevention and data security. The news covers actual fraud and breaches of data security.
And that’s where we, as a community, have some work to do. In 2017, an ICO was practically a license to mint money. Speculators were making fortunes — albeit temporary ones — trading cryptocurrencies, so everyone wanted to get into “this blockchain thing,” not understanding the difference between the technology, the business proposition and the insane replay of the dot-com bubble. And, just as many dot-com business plans weren’t worth the dialup signal they were uploaded on, it turned out a majority of ICOs ranged between wishful thinking and outright scamming. Meanwhile, the exchanges these coins were traded on were hacked with disturbing regularity.
So those of us who had actual value propositions and traded our cryptocurrency peer-to-peer had a lot of explaining to do to people who weren’t very receptive to the message.
But, at least from my perspective, there’s a visible shift in perception. Some people are still talking about bitcoin going to $20,000, “but it’ll go to $3,000 first”. Well, it’s getting down to $3,000 in a hurry and we’ll see what happens next. The bloom, though, is definitely off the speculative rose. Yet distributed ledger technology is not going away. IBM keeps filing blockchain patents, but has only risen to №2 on the list of who’s filed the most. Top honors go to Bank of America. IBM did manage to edge out Mastercard, which takes the bronze. Most the rest of the top seven are financial services firms only one of which, Coinbase, is a pureplay crypto company. Fidelity, Nasdaq and Qualcomm aren’t pursuing this technology without a plethora of good reasons.
These reasons include fraud prevention and data security, as we discussed, but that’s not the whole list. Blocklr has a great storyabout this.
Nasdaq is interested in data matching and taking the friction out of transaction processing, according to Burgess Powell’s Blocklr article. Fidelity wants you to be able to view your crypto investments on the same pane of glass as your stocks, mutual funds and whatever other assets you entrust to their management. Mastercard is seeking ways to speed up transactions on the blockchain and, for whatever reasons, has jumped on the smart-contract bandwagon. IBM is trying to apply blockchain technology along with its supply-chain management expertise. Bank of America and Qualcomm are just being patent trolls about all this, and Coinbase says the only reason it’s racking up patents is as a defensive play against companies like that.
But whether you’re talking about the integrity of the data, the speed and efficiency of the transaction, the ability to create an intuitive dashboard via API, creating contracts via code or speeding time to delivery, these are all functions with direct application to ecommerce sites.
Beyond the old Web
The obvious question, then, is “Can’t we do all that without blockchain?” And, while the answer is “yes,” it’s a very, very qualified “yes.”
The response to the ecommerce sector is that blockchain can deliver the goods — literally — with less counterparty risk and less sharing of your personal and financial data. It can’t really offer much functionally that Web 2.0 and standard mobile app technology can’t do but — with one exception as we’ll see in a moment — as this new paradigm takes root, it should be able to do it faster and at a lower cost per transaction.
Online retailers will be able to track their receivables as well as their inventory with greater clarity. And tokenization is simply the next iteration in the development of loyalty programs. I recommend quick reads of David Geer’s article on The Next Weband Jami DeLoe’s on Ecomdashon the subject.
But here’s the kicker — the one thing blockchain can offer that legacy tech cannot: true, peer-to-peer intimacy.
Even though the actual transaction processing has been smoothed out, each individual transaction is personalized. A unique good is sold from a particular vendor to a particular buyer to specifications customized via a one-off smart contract. Even as production and distribution become more streamlined, every pair of shoes can be a designer original, every jacket tailor-fit. You simply can’t do that on a Samsung phone today.
Evolution is never easy
Here at IOU, we look forward to taking on our role in this world of blockchain-enabled ecommerce.
As cryptocurrency retrenches and resources find their way into supporting the underlying technology, expect big things to happen in a short time along the blockchain.
They say you can lead, follow or get out of the way. We have clearly made up our minds which of these we intend to do.
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.
