What’s Really Happening In Real World Use Cases Of Blockchain?
“It was a bit of random luck really,” Fennie Wang admits when asked how she became involved with blockchain technology. “The universe kinda came together I guess.”
The former securities lawyer, and prior financial analyst, explained that a friend had been volunteering at Toastmaster, a public speaking/leadership series. They had a prison edition where ‘Dread Pirate Roberts’, aka Ross Ulbricht, was a speaker. Wang describes how the man behind one of the most infamous ‘dark web’ marketplaces, created Silk Road “as a protest to the drug laws”. He wanted to reduce drug-related deaths through safer transactions.
While she “was hesitant about the Bitcoin message” and wasn’t sure if she “agreed politically”, nonetheless the potential for the technology was intriguing.
Her story is a similar case for most that get into the world of Distributed Ledger Technology — there’s a shared belief for creating a better way than the status quo.
But the number of real-world examples of the technology live at work today is still relatively few. For all of the hype and headlines, Forrester estimates 90% of ideas won’t make it past POC (proof of concept).
The appetite is there though. Deloitte recently released its global blockchain survey, Breaking Blockchain Open, which quizzed over 1000 ‘blockchain-savvy executives’. The results were perhaps surprising to those outside of the crypto world as 95% said they were planning to invest in 2019. Also 72% viewed blockchain technology as a critical or important priority for their organization.
This is compelling reading for those in the industry. The desire from those in the most senior of roles is there, so what’s been the problem so far?
Reputation for one. ICOs or Initial Coin Offerings, provided the opportunity for anyone with an idea to gain funding. Dating back to 2014, but rising to prominence in 2017, ICOs tokenised crowdfunding, avoiding the equity stake of capital fundraising. However the lack of accountability for how funds were used, left the approach open to charlatans — some with no more than a whitepaper and a prayer, started securing serious money. In fact, $6.3bn was raised in the first three months of 2018, which was more than the entire 12 months prior according to CoinDesk.
Many of the people I speak with in the industry, see ICOs as having served their purpose. They provided the opportunity to fund projects quickly, along with bringing attention to the space. But the lack of regulation, inevitably led to some less than honest raising. However that spotlight has captured the interest of traditional VC funds. And we now have Andreessen Horowitz setting up its own crypto fund, Lightspeed Venture Partners which has carved out money internally for investing. Union Square Ventures has invested in token funds to allow others in invest on its behalf.
There’s even the current situation, where some startups are highlighting the fact they’re “100% ICO free”. Liquality, a platform for swapping cryptocurrencies without fees, is one which proudly promotes that message on its site. This illustrates just how toxic the lexicon has become over the last 12 months.
Underutilisation killed the video star
VideoCoin is one positive example of a company which raised money through an ICO, and went on to produce a fantastic business. Invented to solve a problem its own business was experiencing, VideoCoin has recently taken on alpha testers and is expected to launch its limited public release later in the year.
Halsey Minor, CEO of Live Planet and a strategic technology partner to the VideoCoin Network has previously outlined: “Think of the VideoCoin Network as the Uber or Airbnb of video delivery. Using the VideoCoin Network will give customers cost savings of 50–80% that will allow innovation in this space in a majorly disruptive fashion… We may see the next YouTube Music or Netflix running on the VideoCoin Network in the future, as well as major new content programming from our more established media partnerships.”
The business announced at Consensus in New York last year, that it had raised $50m via a private sale. We spoke with Deva Ghat, CTO of Live Planet and Chief Architect of VideoCoin who explained that “most data centres are underutilised, as they’re built for full capacity and most run at 40%, so they’re going to waste.”
Ghat went on to explain that “80% of all internet traffic is video traffic, and it’s growing.” In fact the vast majority of the internet is video data.
“In the long term our goal is to build an infrastructure platform on which developers can build next generation decentralised video applications… We want to provide an infrastructure platform where anyone can build a Hulu or a Twitch or something like that.”
Filling a need
There was a gap in the market for someone like VideoCoin, but they’re solving a problem, no one had thought possible up until this point. Either that or people had just accepted the status quo.
“As we saw projects like Bitcoin and Ethereum getting a lot of traction, a lot of people putting up data centres just to start mining Bitcoin and Ethereum, it was apparent there was unused capacity. People are willing to do mining operations on it, just to offset some of the capital expenses they incur. Because otherwise their infrastructure sits idly doing nothing,” Ghat says.
The infrastructure that VideoCoin optimises already exists, however they’ve managed to create a platform to harness unused resources along with an incentives model that works for all parties. Their team discovered the critical problem when they fully realised the cost of hosting their VR camera content.
“When we were building video infrastructure for a VR camera, we discovered it’s expensive. When you look at AWS, at first you think it’s cheap, just a few cents per hour. But when you start running video infrastructure on these video providers, it quickly gets really expensive. So we were looking at ways to get our own costs under control, and that’s when we realised the huge untapped potential in data centres,” Ghat says.
Let’s get Intimate
Intimate.io is bringing technology to one of the oldest industries. Co-Founder and Chief Impact Officer, Leah Callon-Butler, talks about the reality that institutional bias has restricted sex tech entrepreneurs in the adult industry. “Mainstream banks and payment gateways — such as PayPal and Stripe — won’t deal with retailers in this space at all.”
Their solution? “The intimate trust and reputation system, which includes features across smart contracts, staking and two-party escrow, is notably ambitious as its functionality is not exclusive to the Adult Industry.”
Intimate has recently released the beta version of the intimate.io crypto checkout for purchasing vibrators (check it out here). “The team at Intimate fundamentally believe this innovation has the power to completely redefine ‘who’ and ‘how’ we trust in every industry in the future,” Callon-Butler says.
Energy reimagined
VideoCoin isn’t the only project whose idea was born from frustration.
Power Ledger Co-Founder Dr Jemma Green explains that “Energy markets haven’t changed much for the better part of a century.” Their blockchain platform allows everyday people to trade energy with each other and invest in renewable energy assets.
“Our technology has the potential to transform energy and carbon markets.”
Power Ledger has been held up as the darling of the blockchain sector in Australia. Having claimed the title of Richard Branson’s Extreme Tech Challenge winner recently, the business rose to global prominence. With projects in Oceania, Asia and North America, the Perth-born outfit has highlighted that to meet the Paris climate agreement goals, “investment in renewables needs to be scaled up six times faster.”
While the energy market has previously been difficult, Dr Green explains that by tokenising the market they’re hoping to make it easier for someone to buy the digital asset.
Blockchain needed in aisle three
In the wake of a large scale health scare in the US, Walmart is doubling down on blockchain technology. There were reports of potential outbreaks of E. coli in romaine lettuce and salmonella in eggs last year which prompted the retailer to take greater measures to understand where its products come from.
By September 2019, all suppliers have been asked to trace their products back to the farm using blockchain technology. Supply chains have been touted for a while as a perfect deployment of this type of tech and it’s great to see a brand taking all the measures it can to implement the available technology to protect itself and its customers.
Challenges of bringing blockchain to life
Some argue that the new ‘en Vogue’ technology is no more than a glorified database with a shiny explanation. But for Dr Green her work with Power Ledger would not have been possible without blockchain. “For carbon credits, it reduces the cost of issuance at market and creates liquidity.” The investment is liquid as has never been possible.
“Carbon credits on the blockchain are more secure. Registries previously have not always been kept up to date,” but with the immediacy of a smart contract, the creation, transfer and retirement of credits can be more easily managed. By tokenising the credit it can be traded and settled easily.
“It takes a long time for incumbent energy and carbon sectors, to understand how the technology relates to their area. Typically the change in utilities has been glacial.”
The slow pace of change is something ixo Co-Founder Fennie Wang knows well. She’s involved in the area of social accreditation, which is similar to Power Ledger’s efforts to digitise areas of the energy sector. Wang notes that, “Impact token are digital assets with liquidity. Carbon credits are the analogue version — but we’re aiming to be more efficient using technology tools. So an asset actually becomes an asset.”
Dave Lorenzini, COO at global shared platform, youAR believes that the number of variables that need to combine may have hampered some of the progression in the blockchain space: “Open and interoperable cross platform systems will depend on data, standards, policies and ultimately, cooperation between all parties involved, including hardware manufacturers, portals and startups breaking new ground on technology.”
Lorenzini is building a global AR cloud platform called youar.io that blends persistent digital content and experiences into real and relative places. He describes how, “Our cameras can now recognize the world around them, and soon, we’ll be able to create, remix and publish content by voice, simply speaking things into view. Today, we’re living in a blank canvas that will never be this way again.”
Jason Atkins, Director at Enhanced Society, a group working on blockchain projects to improve our world, challenged the industry to be more collaborative: “There are many technologies competing and lack of agreement on the winners in each category, providing complexity and risk when investing and building isn’t helping blockchain’s cause.”
Other limiting factors have included the market’s volatility and losses from 2017, along with significant regulatory upheaval last year. Incumbent forces are also creating resistance and blockchain projects need to compete with them toe-to-toe and this all takes time.
But amidst these challenges are considerable rewards. Take Fennie Wang’s work in the social impact space. “IXO has been working with UBS optimus foundation to tokenize impact bonds, which like carbon credits are funding instruments which pay for positive social or environmental outcomes. For example there are certain outcomes you’re working towards and if you meet them, the project developers gets paid. We want to reduce those frictions around verifying and paying for impact.”
The societal benefits that could be executed by smart contracts are clear. “Imagine crowdfunding money for projects — once we have proof of the achievements of these projects, we can disperse a return to the folks who put money at risk to invest in social impact,” says Wang.
“If I can prove that I achieved these outcomes to reduce crime, improve learning outcomes, the public can fund me through funds that are escrowed in a smart contract.” Technology for the greater good is what a lot of blockchain’s early supporters have hoped for and with Optimus Foundation, some of these hopes are becoming a tangible reality.
Blockchain and its future
Market conditions are difficult right now. Intimate.io’s Leah Callon-Butler maintains the future will still depend on fundamentals: “Blockchain startups need to demonstrate a working product with real traction and a level of user adoption that indicates scalability. This is the case for any fledgling startup in need of a cash injection to fuel growth, and considering the current landscape, any blockchain project that meets this criteria will be in a good position to grab the attention of investors.”
Deva Ghat from VideoCoin believes that blockchain businesses need to avoid being distracted by the technology and focus first on their product. “A lot of good projects came from the cycle last year. As the good companies build their solutions out. We’ll see Fortune 500 companies getting involved.” That’s his hope as their company targets the very highest echelons of media, such as Netflix, 21st Century Fox, Hulu, etc.
“We have a really unique method, we call relay mining. We designed it to help the likes of Netflix transition into decentralised infrastructure. In relay mining, the majority of the work happens on cloud instances — and the nodes relay the centralised cloud infrastructure as if it was decentralised. Enterprises can start using the blockchain and decentralised infrastructure with more trust without worrying about business impact,” Ghat says.
Privacy, one of the core blockchain pillars, is close to Dave Lorenzini’s heart in the projects he’s working on. He believes it’s integral to blockchain’s future success: “Above all, we need to protect the rights, privacy and opportunity of people everywhere and this is where decentralised, peer-to-peer, immutable, shared ledger technology comes in.”
In the end it’s about the people for Lorenzini at youAR.io: “Companies and people with specific domain expertise are encouraged to join and contribute time, talents and resources to help build a better world… together.”
Fennie Wang thinks that the power of blockchain is to accelerate and supersede the technological development in some of the poorest nations. “We’re gonna see more headway with the technology in developing countries, because of the leapfrog effect.” She reasons that when you’re in the developed world, the legacy infrastructure works OK but, “If you’re in an underdeveloped ecosystem, you can bring 10x improvements.”
Technology for the power of good is what many in the blockchain space are working towards and it’s heartening to hear from companies who are delivering on this promise.
