Blockchain — a weapon of mass innovation!

Since I live in central London I do not own a car. I use either public transport or Uber. Even if you have never taken a ride with Uber, you are probably aware of the innovation it brought to the taxi industry. Personally, I am delighted with the service. In the past three years only three of the rides I have taken I rated less than 5 stars. And, I have tested them in Paris, Lisbon and Brussels. Equally good!

However, I would like to draw your attention to another organisation that has set out to innovate in the area of transportation called La’Zooz. It is developing a blockchain-based app for real ridesharing service. I find the whole concept very interesting. The app will match the drivers willing to share a ride they are taking, or part of it, with the riders willing to share the cost. The payments will be made in ‘zooz’ tokens, rather than Bitcoins, since their mining does not requires as much computational power. By the way, if you wish to start earning ‘zooz’ tokens straight away, you can download the Android app. It rewards its early adopters, developers and supporters. At the moment, La’Zooz is building its network to gather the critical mass of users before launching.

La’Zooz will run as a decentralised autonomous ‘not for profit’ organization. Moreover, any community anywhere in the world will be able to use it. With the low cost of its real ridesharing service, La’Zooz is targeting a vast market indeed because it also includes public transport users and those who do not normally use taxi services.

Another one of La’Zooz’s smart ideas is to have an open API so that any third party can run its service on top of it, using La’Zooz’s database and ‘zooz’ tokens. In short, La’Zooz plans to become a ‘smart-transportation marketplace’ — they are already envisioning other type of ridesharing service, deliveries, shared moving services, on demand shuttles, etc. built on it.

There are many more ‘cool’ things about the app, for instance: a high level of gamification for the miners, and use of a social matching algorithm for the best possible rider-driver match — Imagine sharing a ride with like-minded people. (You can read more about it in Amanda B. Johnson’s interview with Eitan Katchka, La’Zooz developer, in CoinTelegraph titled: Can La’Zooz Take Ridesharing to the Moon?)

How does Blockchain work?

The concept behind the blockchain technology is similar to that of a database. What is novel is a particular way of interacting with it.

Power is distributed to the whole network — hence La’Zooz being described above as decentralised and autonomous. It uses the wisdom of the crowd to update a single version of the database, called the ledger. A certain percentage of nodes on the network, called miners, have to sign off on any given transaction thus removing the need for a middleman.

This is where a blockchain begins to take shape. The signed off transaction is placed in a pool of pending transactions, called a block, by one of the nodes in the network. Then, the node broadcasts the block to the network for validation.

The validator nodes of the network work to validate the block via iteration. Here, I would like to point out that different blockchain networks use different validation techniques. But, the aim is the same — to make fraudulent transactions impossible.

If all transactions are validated, the new block is locked into the blockchain, and the updated ledger is broadcast to the network. The whole process is completed in a matter of seconds. And, once the block has been created, it can never be altered.

For their effort, the miners are compensated in cryptocurrency — in this case in ‘zooz’ tokens.

Apart from not having a central authority, another advantage of the whole system is the security of users’ information. The sensitive data, that is, user’s identity, location and the payment details are encrypted. Moreover, the payment data and the connection between users’ ID and their location are decentralised.

It is easy to understand the concept if one thinks of it as a database of users’ IDs and locations. This is why matching them can be used by any other transportation service provider willing to use the network and ‘zooz’ tokens.

Why is Blockchain considered to be an open platform for innovation?

At present, the general opinion is that the blockchain technology itself has more significance than Bitcoin cryptocurrency since it has got potential to radically transform the way we transact money, data and assets in the near future.

This is the reason why banks currently test its application in the areas of payments, financial asset transfers, smart contracts, ownership splits and notary services. In my next blog post I will talk about smart contracts, domestic and international payments, trade finance and capital markets.

The main advantage of the blockchain technology is its ‘programmable trust infrastructure’, i.e. all users see the same thing without one side having to trust the other side — in a sense, trust has been ‘pre-programmed’ in the rules. This is what will remove systemic risk in finance.

Furthermore, the capability to exchange any asset on blockchain — and not just Bitcoins — at low cost, in near real time, and without an intermediary makes it such an attractive platform for innovation.

In his blog post on SUM’s website titled ‘Why Blockchain is the New Website’, William Mougayar, a venture advisor, entrepreneur, marketer and strategist, argues that every company will pretty soon have a blockchain just as organisations have websites today.

Mr Mougayar advises companies to start leveraging the blockchain technology as soon as possible and uncovering potential applications by asking the following questions:

• What types of assets can we transfer or create on the blockchain?
• What data or processes can we notarise on the blockchain, so we can enable peer to peer transactions without a middleman?

I fully agree that this is a very good strategy. Change is always accompanied by opportunities. Once we embrace the change, we are more likely to recognise its opportunities.

Moving assets, identities, ownerships, contracts, balances, records and data on the blockchain is the first phase of uncovering new services, opportunities and markets.