With apologies to William Shakespeare and Hamlet, “To blockchain or not to blockchain really is the question.”
Blockchain hype abounds, with promises that it will disrupt everything and that it is the panacea for everything!
Sceptics and naysayers are just as vocal. One strong opinion is that there is no use at all for blockchain, which to date has only delivered “currency speculation and illegal transactions” and where use cases “amount to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed”.
Do we need blockchain?
While this previous opinion might be a somewhat extreme view, it has elements of truth in it. So, for example, much is made of getting rid of Visa and MasterCard as intermediaries and replacing them with a blockchain system that allows for peer-to-peer exchange of value. This might mean, however, that:
· you are losing the security that you’ll get your money back in case of fraud or error,
· your privacy is compromised,
· you risk losing everything if you lose your private key or password, and
· you might wait a long time for your transaction to be processed.
Visa can handle 60,000 transactions per second, compared to Bitcoin’s 7 and Ethereum’s 15. And this at an enormous energy cost. In fact, it is estimated that it would take 5,000 nuclear reactors to run Visa on the blockchain.
Even promising systems like Ripple are very slow. Ripple is being supported by more than 80 banks, 11 of them in the world’s top 100 banks by total assets. All are looking for faster, cheaper and “frictionless” alternatives to legacy money transfer systems, especially for cross-border transfers. According to our skeptic above, over a period of 30 days at the end of 2017, Ripple processed two billion dollars’ worth of interbank and interpersonal transactions — which is the equivalent of only 40 seconds’ worth of volume on the SWIFT interbank network. There is also some dispute over whether the Ripple currency XRP will ever be integral to bank transfers or whether it is just speculative.
Gideon Greenspan, founder of the company developing the MultiChain platform for private blockchains, cautions against “blockchain for everything”. He points to the stability of current relational databases. These include Oracle and SQL Server, or even MySQL and Postgres. They have decades of development, have been deployed on millions of servers with trillions of queries, are tested and debugged — and run thousands of queries per second. By comparison, according to Greenspan, blockchain is still in diapers. Choosing to run a blockchain for projects that are more suited to databases could be a very costly mistake.
If we start asking questions around tokens, and whether, in fact, your use case needs a native token, whether it could make use of an existing cryptocurrency, or whether it needs a token at all, responses can get very vague indeed.
Real use cases for blockchain
However, there must be a reason for all of those banks to be backing the blockchain option. And for why multiple shared databases are being set up across the finance, insurance, health, public and resources sectors. For example, a consortium of 14 Japanese shipping, trading and insurance companies is developing a private blockchain to streamline the exchange of trade and logistics information across corporations and business categories, thus transforming the way they do business with each other.
The list of countries adopting blockchain technology is growing. Sweden is currently testing the use of blockchain to digitize land registries. Dubai has announced that all government documents should be secured with blockchain by 2020. Japan aims to use a blockchain platform to process government tenders, removing the threat of cyber-attacks and data theft. The UK is trialing blockchain technology for welfare payments. The Monetary Authority of Singapore (MAS) is exploring the use of blockchain for interbank payments.
Three strategic contexts where blockchain will be a game changer, according to Debra Bordgnon, CTO of Dimension Data, Australia are:
· Blockchain as an enabler for the Internet of Things (IoT)
· Blockchain as a catalyst for business ecosystems
· Blockchain as a protector and liberator of our personal data
This view is supported by Professor David Lee of Singapore Management University. According to him, we have now moved beyond having to provide user education on how Blockchain works and now must demonstrate its uses. He believes that “the key ingredient is M2M (machine to machine) and IoT (Internet of Things). These need to take off for Blockchain to take off in a big way”.
Bart Suichies, in his article titled “Why blockchain must die in 2016”, puts it like this:
“Ultimately, like mobile, like the internet, and like computers before that, Blockchain is not the thing. It’s the thing that enables the thing.
The sooner we all realize this, the sooner we can let Blockchain die as a popular discussion topic amongst analysts, consultants and speakers and get to work on the useful solutions that the technology will enable.”
To blockchain or not to blockchain — decision models
It would seem that neither the blockchain fanatics nor the naysayers are right. The answer is somewhere in the middle. Some use cases are right for blockchain. Some are not. The skill is to know the difference before you embark on what could be a costly trip.
Various decision models have been put forward to help us to decide on whether a particular use case is, in fact, appropriate for a blockchain solution.
The Suichies Model is quite helpful, as it gives the questions to be asked.
· Do you need a database?
· Do you require shared write access?
· Are the writers known and trusted? And are their interests unified?
· Do you want/need to use a trusted third party?
· Do you need to control functionality? Where is consensus determined?
· Do you want transactions to be private or public?
Another useful model is from Morgen E. Peck, who adds the questions:
· Can a traditional database technology meet your needs?
· Is this database likely to be attacked or censored? Do you need redundant copies in multiple distributed computers?
The Lewis Model asks:
· Can you articulate a real business problem that needs solving?
· Could this have been fixed before blockchain?
Finally, Usha Krisnan, founder and CEO of ChainGenie, suggests:
“Innovators need to clearly define their use case, show why (blockchain) technology is necessary, and articulate why this will bring benefits to the industry and value for clients.”
Play2Live: A Case Study in defining the use case, showing why blockchain is necessary and articulating its value and benefits to the industry and its clients
Blockchain and tokenization are central to the Play2Live business model
Play2Live is the first full-blown decentralized streaming platform for gamers and eSports fans. Blockchain technology allows it to introduce a unique mixture of interactive features and monetizing tools, currently unavailable on existing streaming platforms.
It features a blockchain platform called Level Up Chain, with a native utility token called LUC.
eSports is a good example of an industry that had become “stuck” because existing technology did not allow for what participants in the industry really wanted:
· To move beyond just viewing and chatting, to interacting directly with the games and players
· To have personalization options
· To influence content generation
· To earn money, without having to go through laborious administrative procedures and long waits
· To avoid being bombarded with advertising content
The core function of Play2Live is a streaming service, featuring video broadcast of gaming and eSports content. Unlike other streaming services, and as a direct result of the underlying blockchain technology, the platform boasts a significantly higher level of interactivity. The solution changes the rules of the game in the industry, giving monetization opportunities to all participants, including viewers.
The economic model of the platform is such that it empowers streamers and users to determine the type of content they want, the way it is displayed and its monetization type. For example, streamers can purchase promotion in the ratings on the main page, or viewers can pay for premium subscriptions. All users incur costs — paid for in LUC. But they can all also earn LUC. Streamers can also fine-tune and personalize the parameters of the economy — for example allowing them to choose subscription rates or the percentage of revenue going to viewers watching adverts.
The interaction is direct, between players and viewers. The role of Play2Live is maintenance and implementation of technical functionality, along with other areas of participation. Some examples of this interaction include the following:
· Viewers can influence the content and the end-result of tournaments. They can use LUC tokens to vote for the teams they’d like to see competing against each other, the tournament format, the commentators and even the locations. Play2Live works with tournament organizers to set up tournaments to match the wishes of users.
· Viewers interact directly with streamers, not just via chats. They can set tasks and challenges for streamers, vote for the content they’d like to see and make donations. Premium subscriptions give viewers special rights during tournaments.
· Viewers watching a stream can challenge each other to duels on the game, using LUC to bet against others. Viewers are redirected to partner sites where they can play the game face to face.
· Streamers can set tasks for viewers (e.g. to watch other streamers, or to watch adverts) and reward them for completed tasks. Streamers have 11 ways of monetization and can start to earn LUC from their very first streams, without any limitations. They are B2B partners on the platform, incentivized to attract new viewers.
· Viewers are in control of the advertising they watch. Advertising is disabled by default on the streaming platform. However, viewers are incentivized to watch the adverts, as they are rewarded with LUC every time they do.
This interactivity goes beyond just the streamers, viewers and games organizers on the platform. It extends to existing crypto projects in eSports and gaming, that can be added to the Play2Live ecosystem and that can then also interact with users on the Level Up Chain platform.
Other problems inherent to the eSports and gaming environment, and that can be solved by the way that Play2Live is implementing blockchain technology include:
· Lack of opportunity for amateurs in lower leagues of games: this can be solved by Improved monetization options, including the facility to crowdfund local tournaments
· Cheating, both within the gamer community and within the betting community: this can be solved by random selection of viewers to take part in judging or in reviewing games and setting up smart contract frameworks for tournaments to ensure automatic distribution of prize pools
· Monetization of digital goods and skin gambling: blockchain and tokenization are the obvious answer here.
Some technical features of Level Up Chain
Graphene platform
The project is deployed on the Graphene platform, third-generation software with cryptographic protection and sustainable decentralized data registry. Graphene can handle large amounts of data and provides privacy and high speed of confirmation and signature of transactions. Thanks to Graphene technology, the speed of transactions in Level Up Chain is expected to exceed 50,000 TPS. This must be compared to 7 per second for Bitcoin and 15 for Ethereum.
Use of Level Up Chain provides high security due to:
· Decentralized storage
· Immutable data records
· Transaction anonymity at three stages (sender, transaction, recipient)
DPoS consensus
A DPoS consensus algorithm is implemented on the platform. (There’s a simple description and video about this here.) In essence, this allows for the direct and transparent interaction between participants. For example, viewers can challenge a streamer to perform certain tasks. If a number of different tasks are proposed, the one to be undertaken is decided by a system of votes using the LUC token. Once a task has been decided, a similar system of voting, based on consensus, decides on whether the streamer has in fact completed the task adequately. Rewards — or penalties — in LUCs, are immediate. According to the DPoS system, the user base or community (those who own a certain number of LUC tokens) select “witnesses” who represent them in the consensus voting process. This ensures a completely decentralized system, without the huge energy cost of the more common proof-of-work or proof-of-stake systems.
Tokenization
Much of the interactivity on the platform is facilitated by the use of cryptocurrency. All transactions on the platform are via its own token, the LUC. LUC can be bought using either fiat currencies or cryptocurrencies like bitcoin and Ethereum. Winnings and earnings can be re-converted into any of these currencies, or used on the platform to buy games from partner stores, to make donations directly to streamers, for bets on teams and competitions, for subscriptions and for fees to participate in tournaments.
Streamers can earn LUC in eleven different ways. Viewers have 5 ways. The P2P platform itself has 15 different revenue streams, all of them using the LUC token, and expected to grow to 25 modules.
Special applications
Some special functionalities, possible only because of the blockchain platform, include a platform crowdfunding system for individual tournaments, an escrow service for tournament organizers, a totalizator for eSports tournaments and a donation system.
Future plans
Play2Live is the first project to launch on this platform, but several more are planned. All will use the LUC as the base currency for all activities.
An overview of what blockchain brings to eSports and gaming
Blockchain technology is a solution to many of the problems related to eSports and gaming. It will also make the eSports industry more efficient. Some direct benefits of blockchain technology for eSports include:
· It provides transparency; it’s incorruptible; smart contracts ensure fairness, security and speedy implementation of payments and other agreement terms.
· The key is tokenization, where value is held and distributed via peer-to-peer networks rather than centralized hubs. eSports is a perfect application of tokenization, and there are predictions that, in the future, game-purchase transactions will occur exclusively in cryptocurrency.
· Blockchain shifts power relationships — so, in eSports, this means putting some of the power currently in the hands of publishers and large tournament organizers into the hand of players and viewers.
· Platforms become facilitators of decentralization, rather than providers of centralized services.
· Financial and geographical restrictions become irrelevant — this is important to eSports, which, after soccer, is the first truly global sport.
In summary, Play2Live as a genuine use case for blockchain
Play2Live is not just talking about blockchain and tokens as part of a hype exercise. Theirs is a clear use case for a blockchain solution, and the LUC token is absolutely central to the operation of the business. They certainly seem to have met the challenge set, to clearly define their use case, show why blockchain is necessary, and articulate the benefits for the industry and their clients. They have also articulated a real business problem that needs solving, as suggested in the Lewis Model. In addition, it is clear that this problem could not have been fixed before blockchain.
For Play2Live, the answer to the Shakespearean-like question, “to blockchain or not to blockchain” is a definite YES.
Stay tuned!
