Can an Arcane Crypto Ledger Replace Uber, Spotify and AirBnB?

The technology underlying Bitcoin has inspired a new flavor of techno utopianism that could spell the end of centralized app services as we know them

Wheels down! As your plane taxis to the gate, you pull out your phone and rustle up a ride to get you to the room that’s just around the corner from your morning meeting. Your car pulls up, and you settle into the back seat, put in your earbuds and shut out the din with your favorite tunes.

To run this common little Business Travel 101 scenario today, you’d probably be relying on iconic brands of the app economy, like Uber, AirBNB, and Spotify, most every step of the way. Sure is great to live in the future!

But what if it’s not 2015 but, say, 2025, and you could instantly find, hire and pay providers of all those services without going through a company of any kind? What if access to those services, and many more like them, came baked into the network itself, like email or a Web page, protocol-to-protocol rather than company-to-company? And what if these relationships were all managed autonomously by high-order math running on distributed computing engines, beyond the control of any one individual or organization?

The vision of such a platform-less platform has been cherished in many pockets of alt-thinking, from the “every man an island” libertarians to the anarcho-bliss communal left. It has not dominated today’s technology industry, with its ubiquitous centralized platforms competing to provide free services and then monetize them selling ads or data (or taking a transaction cut). But it has one huge win under its belt: the rise of the Internet itself, where businesses, organizations, and individuals all connect and transact business with one another directly, without asking for permission or paying a monopoly-holder or begging for approval from an app-store manager.

Once considered forbiddingly abstruse and impossible for mere mortals to navigate, the Internet took off once it translated its complexities into the friendlier terms of the domain-name system and the World Wide Web. The network we use and enjoy today achieved its scope and fertility by giving participants more freedom, more choices, and more human variety than any of its closed-off predecessors — once-dominant businesses like AOL and Compuserve that had to adapt or wither away.

Now, a new wave of visionary technologists is betting that we can do the same thing all over again — this time, turning the admittedly complex mechanisms that make the digital currency Bitcoin work into a friendlier system that can fetch you a ride and book you a room while playing you some personalized music. The key to all of their dreams is called the blockchain. Today, it enables Bitcoin; tomorrow, it could be running your life.

A blockchain is a cryptographically protected shared database — a public ledger or journal that anyone (with the right skills and tools) can contribute to. Once information is entered on a blockchain, anyone can inspect it, and it’s nearly impossible to alter it. The most widely used blockchain today is the one that tracks Bitcoin transactions and keeps each unit of currency from being illicitly duplicated. That’s called “solving the double-spend problem,” and the blockchain, though not infallible, is a particularly elegant and effective technique. But there’s no reason that blockchains couldn’t be used for all kinds of other purposes — any situation that calls for an open public record where everyone can keep extending it into the future but no one can tamper with its past: think intellectual property rights, personal identity verification, real estate records, and so on.

Today there’s no shortage of startups, projects, and developers trying to apply the blockchain concept to everything. More than anything else, that’s because it gives the tech industry another bite at a long-coveted apple: decentralization.

“The core functionality of Bitcoin was creating a currency and accounting system that people could trust without recourse to a centralized intermediary like the Federal Reserve,” explains Rachel O’Dwyer, a core member of the P2P Foundation and lecturer at Trinity College, Dublin who studies this field. The blockchain provides “a distributed system for collaborating with others that we don’t know or trust, for sharing knowledge, for making decisions, for developing transparent systems and so on.”

For as long as there have been computer networks, there have been people telling us that such networks will “disintermediate” companies and institutions and connect individuals directly instead. And forsooth! A whole lot of disintermediation has even really happened. But every time a little decentralization gets underway, an equal and opposite reaction kicks in — you could call it “directorization.” The digital innovators of our day, like those Portlandia hipsters with their birds, have a universal scheme for improving anything: “Put a directory on it!”

In a sense, the directorization impulse is understandable. Sure, you can empower individuals to do all kinds of amazing things in a peer-to-peer style, but they still have to locate one another, right? “Discovery,” as the industry calls it, is hard. Uber is still finding its drivers on Craigslist.

Someone has to keep track of who is where and help you find what you want. So each time people start peer-to-peering, somebody comes along and sets out to make everything easier by building a catalogue or index. Think Yahoo circa 1995, or Google circa 2000. Bittorrent is a file-sharing technique that requires no central platform, but we keep getting a Pirate Bay and a PopcornTime anyway, because they’re really convenient.

At heart, each of today’s platforms — Uber, Kickstarter, Airbnb, and the rest — is just a glorified listing service, enhanced with some combination of real-time connections, trust-building systems, and transaction-easing tools. These services provide a helpful starting point for anyone who wants to find a ride or a room. Once you’ve put a directory on something, you’ve also created a nice business opportunity — and a magnet to pull the scattered particles on the network back toward a nucleus.

The blockchain, both as code and as concept, is enabling us, finally, to see just how far decentralization can be pushed. Can we share data so that no one can directorize it? Is it possible to decentralize a service all the way, so that the center is just, poof!, gone? We know that before long Uber is going to use software (i.e., self-driving systems) to make its drivers obsolete; can software turn around and make Uber itself obsolete? Is there a decentralization event-horizon beyond which platforms simply dissolve, and we all float out together into the great soup of being and connecting?

Any reasonable answer to these questions has to be: Not yet. Not for a long time. But a person can dream, no?

Here are two instances of that dream.

Last year Backchannel, where you’re reading this now, published a piece by D.A. Wallach suggesting that the blockchain gave the music industry an opportunity to rebuild from the ground up: Digital music files could be authenticated using a Bitcoin-style approach, their rights information could travel with them, and you could even build in an automated pay-the-owner system. Micropayments without annoying digital-rights-management restrictions! Cool — but it wasn’t as if you could just download an app and start in.

A British music entrepreneur named Phil Barry — he’d worked with Radiohead singer Thom Yorke on a Bittorrent-driven release of a solo album last year — read Wallach’s article and, like a lot of people, thought, this is either going to revitalize the music biz or seal its doom. He didn’t care either way all that much; he was more interested in how tech could improve the lot of artists themselves, and he knew he wanted to explore what it would take to actually implement the kind of system Wallach had outlined.

“Quite rapidly,” Barry recalls, “this went from being an obscure, out-there idea to something that was being talked about seriously.” He began working with Consensys, a sort of incubator for projects based on Ethereum — the best-known and probably furthest-along, technically speaking, of the platforms that are trying to apply Bitcoin-style tech to broader uses beyond currency. Barry called his project Ujo Music. (Ujo, he explains, is “container” in Esperanto.)

Around the same time, singer-songwriter Imogen Heap, who has long had a sideline in music tech, began talking publicly about her concept of a blockchain-based music rights-and-credits system called Mycelia. “She had described in a very creative, artistic sense, something that was very similar to what we wanted to do from a functional sense, a practical sense,” Barry says. The two talked, and when Heap released a song called “Tiny Human” in September in a variety of digital formats, one of those was a prototype of Barry’s Ujo Music system. As Barry puts it, when people bought this download, “they could see that the money has been sent to the right people.”

Imogen Heap during TechCrunch Disrupt London 2015. (via Getty Images)

To do so, of course, they needed to have some “ether,” Ethereum’s virtual currency, to buy it with. Most of us don’t have ether lying around, so the sales figures for “Tiny Human” are, as Barry readily admits, tiny: “I think this is like the first or second time you’ve been able to send ether in the real world.” Since each transaction is publicly recorded, you can count them, and Ujo does so on its site: At the time of writing, “Tiny Human” downloads have just crossed the 100 mark, meaning that Heap has earned $98 from the deal.

The Ujo prototype also showed off some more advanced features, like the ability to splinter a song into different tracks (or “stems”) for relicensing/remixing purposes. Ultimately, Ujo imagines an autonomously functioning system of “smart contracts” — self-executing agreements encoded in software that automate the unbelievably complex and confusing business of music rights, permissions, and payments. In the long run, proponents of this kind of system see it not only as a means of assuring artists some revenue from their compositions, but also as a key to freeing up the rights status quo (under which, today, if you want to sample something, you have to either pay a fortune or proceed extralegally). The broader vision is to tie music, and ultimately all creative work, to the person who created it — and to that person’s bank account — with a crypto-hardened knot.

Barry says the music biz is paying attention: “Lots of very senior people in all of the big PROs [performance rights organizations] made contact with us.” He’s not sure whether they’re interested in participating, or just checking out the potential competition. “It could just be that they feel they at least have to show that they are willing to engage with new technology. At the same time, if Ujo is a sign of the future to come, then there are large parts of the music industry that won’t exist, or will be radically changed, so it may be that they’re doing it defensively, to find out how dangerous it is.”

For a somewhat different picture of a future in which the blockchain undermines central platforms, travel to Israel, where a handful of collaborators have hatched a car-sharing service that’s been dubbed the “anti-Uber.” La’Zooz envisions a future in which, when you need a ride somewhere, your phone will connect you with someone nearby who is already going to the same place: In other words, it is true “realtime ridesharing,” not an app-enabled taxi company. (You could also call it “The app formerly known as hitchhiking.”)

After several years of planning and an initial token sale last summer, La’Zooz now has an Android app up and running, but outside of a tiny pilot program in Israel, you can’t yet actually use it to summon rides. La’Zooz’s system pays drivers in its own token currency (called, um, “zooz”), and right now La’Zooz users earn (or “mine”) zooz by letting the app track their locations over time. La’Zooz developers see this as a means to achieve the “critical density of active users” it will need to become useful to ride-seeking users — and also to put some zooz in a wide enough collection of pockets so that, once the riding begins, people can pay for their trips.

Right now the La’Zooz site reports a community of more than 3,000 members spread around the globe, so “critical density” is plainly a good ways off. The open-source software has been developed mostly by about a half-dozen contributors on the core team. I asked one of them, Eitan Katchka, to lay out the roadmap for the project, but he didn’t sound too upbeat. A crowdfunding campaign last summer failed to raise what the project needed to develop an iOS app, and Katchka says the team is considering a “change in direction.”

Setbacks aside, he’s still sold on the concept. “The responsibility of La’Zooz and other projects of its kind is to show there is a possibility for such services and networks to come to life without a central entity, or with a central entity that acknowledges the power and importance of the network creators,” he says. “I always tell people who doubt these options — how would you explain ‘email’ to your neighbor back in 1994?”

The exciting thing about La’Zooz is that it just seems to make a great deal of sense. The depressing thing is that it seems so utopian — a word that arose each time the experts I talked to for this piece mentioned La’Zooz. Maybe it will prove impossible to get there from here. Or maybe it’s just, as Katchka puts it, a “delicate job” that will take years to complete.

Both Ujo and La’Zooz are nascent examples of a popular concept in blockchain circles called…well, here’s the thing: I’ve hesitated even to introduce these terms, to avoid the high acronym level and buzzword toxicity. I am talking about the various d-word phrases that crowd the discourse in Bitcoin-land like a fleet of conceptual icebergs: Distributed Autonomous Corporation (DAC), Distributed Autonomous Organization (DAO), Distributed Cooperative Organization (DCO), and so on.

All these are labels for different flavors of code-driven entities of the future that do things on the network without orders from the central office. Every outfit that bandies these words about has a slightly different meaning for them, and at this stage they exist largely in theory, anyway, so it’s hard to point to specimens. If Ujo’s smart contracts came into broad use as a mechanism for paying for music rights, the resulting network would be a kind of DAC or DAO. La’Zooz is more of a DCO; it calls itself a “Decentralized Transportation Platform owned by the community.”

One thread connects all these labels: They’re all about wresting marketplace relationships away from the grasp of the old rent-seeking, monopoly-hungry platforms. The concept is widely applicable, and it is sparking all sorts of imaginative proposals — like “fix Reddit with Bitcoin.”

If autonomous code is going to start moving around our networks, doing deals and making things happen at inconceivable speed and scale, we will need to begin thinking about the difference between code that lets us do stuff and code that does stuff to us. The structure and design of software-based services has powerful and sometimes unforeseeable real-world side-effects. Just look at how Uber’s customer rating system turns customers into middle-managers and enforces frozen smiles on drivers’ faces.

We know that automated marketplaces can quickly become playgrounds for all kinds of mischief — bots, spam, and scams. One market we’re all familiar with has already been turned into an arena of just-in-time micro-auctions — the attention-grubbing world of online advertising — and its example does not inspire hope. Every time we’ve put a cash value on bits of network, like the links that historically fueled Page Rank on Google, we’ve seen the network get polluted fast.

Maybe we can avoid these obstacles. And maybe we can resolve the sheer technical difficulty of building responsive real-time services for real-world uses like ride-sharing on a blockchain foundation that, today, moves slowly and isn’t easy for developers to work with. Even then, we might not be happy with the outcome. As Rachel O’Dwyer argues, “doing so won’t automatically lead to the social and labor conditions we might want. Changing how people actually cooperate and relate to each other is much harder.”

With those concerns in mind, maybe there are other ways to pursue decentralization that aren’t all about tech upgrades. Humans have been organizing in groups — tribes, collectives, federations — for at least as long as they’ve been making tools. In an essay last year, Trebor Scholz, a professor at the New School, imagined recreating Uber by, as he puts it, “basically, ripping out the heart and putting in a cooperative — run the technology with different values, to the benefit of the workers and everybody else involved.” Scholz and his collaborators call this approach “platform cooperativism”; melding app-economy tech with old-school progressive labor organization, they hope to spark a movement.

Let’s not get carried away, though: “platform cooperativism” is just as obscure a term right now as “distributed autonomy,” and outfits with names like La’Zooz and Ujo are not going to transform the global economy next week. The ferment of blockchainmania could easily fizzle. Tim Swanson — director of market research at R3, which is pursuing blockchain projects with giant banks like Goldman Sachs and Barclays — offers a cold-splash-in-the-face perspective. “Basically,” Swanson says, “it seems like everybody wants to put everything on a blockchain — whether or not there’s real benefits versus the costs.” The question to ask, Swanson maintains, is: “What issues do enterprises or organizations face that require solving a double-spending issue? As of right now I’d say that the first production systems are going to continue to remain in the financial industry.”

But the hope of decentralization springs eternal. Veteran technologist Phil Windley — he is chairman of XDI.org, which is promoting a semantic standard for “public infrastructure for digital identity, security, and privacy” — argues that, sure, the blockchain is complex, but that’s because the problems people want to use it to solve are complex, too. He recalls arguments in the ’80s that the Internet protocols were far too elaborate if you just wanted to hook a bunch of computers together. “Compared to blockchains it’s dirt simple, but at the time, given the limited processing power we had, it just seemed so complicated. That was because it was solving a problem you can’t solve in a different way: anybody anywhere talking to each other, without having to have a centralized service in the middle.”

Windley is excited about using blockchains today to build registries. We need directories to find things; here’s a way to “put a directory on” anything without requiring a private-company middleman. The companies won’t go away. But, as with email, he says, their services will be interoperable, and you’ll be able to switch providers.

“There’s no hidden code, there’s no special organization that has access to this thing that other organizations don’t. It’s what makes email work. It’s not that we all run our own email servers — it’s that we could.”

Illustration by Karol Banach.

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