Reclaiming Control: Blockchain + the New Transparency Economy
By New Lab
Data mining. Identity theft. Malware. The dark web. It feels as though every time you sit down at a computer, you unwittingly divulge your most intimate details to be bundled, analyzed, sold or stolen. Corporate entities use every click and search term to scrutinize your shopping habits and target ads, governments scoop up online communications, hackers target your passwords, bank accounts, and social security number. Information — identities, locations, transactions — can be manipulated, falsified, or erased, and making sure they aren’t costs time and money. Enter blockchain.
Photography by Minu Han / Reporting by Andrea Thompson
The word might conjure visions of bitcoin bros, the headline-grabbing investors who have made millions off the cryptocurrency that is blockchain’s most famous — infamous? — application. But blockchain itself — a digital ledger that is decentralized and virtually tamper-proof — has many applications beyond currency, and, many believe, it could prove as revolutionary as TCP/IP, which, back in 1972, set the stage for the Internet.
Into this scene come entrepreneurs eager to not just cash in, but to empower users, promote peer-to-peer transactions, and privilege individual control and knowledge-sharing. These companies, like New Lab members Loomia and FOAM, aim to harness the privacy-shielding power of blockchain to create new ways for users to participate in our data-driven economy. Loomia, founded by Madison Maxey, provides soft-material manufacturers with three components — the Loomia Electronic Layer, the Loomia Tile, and the Loomia Data Exchange — that create a smart apparel experience (changes in color, heat, or illumination) while collecting, securing, and monetizing data for the consumer’s benefit.
“We don’t want to own people’s data and sell it on the back end,” says Maxey, who is Loomia’s technical lead. “The blockchain offered an opportunity to handle data in a way that respects the consumer.”
Maxey, who dropped out of design school at 20 with the support of a $100,000 Thiel fellowship, and Loomia’s CEO, Janett Liriano, a master electrician who’s worked in design and production for major film and theatre, have an appreciation for deep technical detail that stays in the background. “No one goes to a Broadway show to see the pulley and the wires that go into making someone look like they are flying,” Maxey points out. “We’re offering tools that allow brands to give extra functionality to their products and give consumers delight and joy.”
So, for instance, a user buys a jacket with a Loomia Electronic Layer sewn into the lining. The Layer can provide heat in cold weather; it also collects data pertaining to temperature and motion data. (Significantly, the products won’t track location, and any use of data requires explicit consent from the user.) With an app, consumers can translate that data — how often a garment is worn and washed, what weather it is typically used in — to the blockchain. Users can then choose to sell that data back to the manufacturer for tokens, creating a marketplace that provides manufacturers with robust, accurate feedback about their products while giving consumers control over — and profit from — their own data.
From wear to where: FOAM, on the other hand, is all about location. The three-year-old company uses blockchain technology to facilitate secure, decentralized, open source spatial protocols that can verify location data for smart contracts, serve as a global location standard, and provide a platform for other applications that need reliable spatial information to operate. FOAM uses radio beacons, an open-source network buttressed by the financial incentives created by cryptocurrencies, to provide data to verify location claims.
“We want to get people to participate, to contribute work and be rewarded,” says Ryan John King, FOAM’s CEO and, with Kristoffer Josefsson and Katya Zavyalova, one of its co-founders. “The token is made to align people.”
Among other applications, FOAM can then support the next great blockchain disruptor: smart contracts, self-executing agreements that eliminate the infrastructure and third-party confirmations that bog down supply chains. To be reliable, these contracts need secure location verification, indoors and out, that can’t be spoofed or hacked — something GPS notoriously can’t ensure (as King points out, Pokemon Go was rife with GPS-enabled cheating.)
Managing the spatial aspects of supply chain economics — sure. But FOAM also sees a grander purpose: as Alyssa Wright, one of FOAM’s advisors, writes on the company’s blog, “Decentralization has the unique ability to give people agency over their rights, their data, their vote and…their place in the physical world.” For instance, FOAM has partnered with uPort, which is working with the United Nations to use cryptographically-secured digital IDs to authenticate voting.
Of course, hurdles remain. For one, there’s the enormous environmental cost of the massive server power required to run and secure blockchains. Then there’s regulation and scale. “The landscape is drastically changing but there is no clear law,” says King, and managing shifting and sometimes conflicting requirements can be onerous. Further, public blockchains can’t support thousands, much less millions, of users without clogging up the system — an immensely popular app like Facebook, for instance, would be impossible to run on today’s blockchain.
Still, it’s hard not to be swept up by the technology’s utopian promise: a world without gatekeepers or intermediaries, in which individuals take back control over their own data and value. As King notes, “The blockchain is censorship-resistant and permission-less.” Can blockchain set us all free?
