The Duality of the Blockchain
Travelling to Google’s Headquarters in Mountain View is no light task. The campus is gorgeous with branded bicycles, a dinosaur, an indoor slide and the famous Oreo cookie that looks like a robot. Every building has a cafeteria style catering with most of the seats filled on any given day. Employees with their branded shirt walk around displaying their unique taste in fashion: green painted nails for one man and pink hair for the other. There are few women, but they stand out with their unique bags — one pink plastic purse with porcupines sticking out.
I’m about to give a speech and I’m thinking…who is my audience? Surely, Googlers are smart and technical. But they don’t come in the same package. I am by no means, able and willing to talk about the technical aspects of the blockchain. But not all Googlers are technical. What I am about to offer is a generalist view of the industry, upcoming trends and the various components that few may know about. Let me explain.
Transparency of taboo markets
Taboo markets — the ones we don’t like to talk about — such as the adult industry see the greatest opportunity in the blockchain. Women and men who call themselves “sex tech” thought leaders are educating individuals on the intersection of Sex and Technology. Ever heard of Virtual Reality (VR)? Initimate.io has a team of these thought leaders who are bringing innovation to sex education. “Intimate.io is a cryptocurrency designed to solve the issues with executing payments and establishing trust in the Adult and SexTech Industries,” says Co-founder Leah Callon-Butler, adding her personal goal to “educate women and men and reward good behavior.” Many service workers are unbanked, and with the blockchain recording every step of the transaction, the barriers to entry may be reduced. The blockchain brings trust and efficiency, says Callon-Butler, “with a big focus on health to an industry that has been unable to rely on traditional mechanisms of payment and identification due to stigmatization.”
Neutrality where biases exist
Getting people enrolled in banked or formal economies requires a socio-economic process which includes traditionally marginalized groups. In some countries in the Middle East, Asia and Africa, women are not permitted to open bank accounts or drive cars therefore limiting their access to financial institutions. In Saudi Arabia, the driving ban for women has only been lifted in 2017 giving more women access to business amenities. What is interesting to learn is that 40% of the startups in Saudi Arabia are women-run compared to 17% in the United States. The blockchain creates balance in that it is gender neutral – users don’t have to disclose age, gender, sex or nationality. Blockchain eliminates biases propelling the spirit of entrepreneurship and “doing business.” It also grants more opportunity for women and other marginalized groups to participate in the emerging technology. Yet education is needed to increase the women’s count for cryptocurrency investing – between 3-5% of cryptocurrency owners are women.
Francesco Rulli from Bitlanders addressed this problem with Bitlanders, the social content platform that employed over 300,000 women in Afghanistan. From writers to filmmakers, women were paid in Bitcoin. Local regulatory issues prompt him to create Querlo, an AI company that creates chatbots for user engagement, payments and other tech solutions. With talks about AI on the blockchain, one thing is certain: more groups will be served. As a result, social norms will be questioned; ie, religion and spirituality. Ever heard of Buddhism on the blockchain? Check out Lotos.
The rise of decentralized applications (dApps) on the Ethereum blockchain has given business owners greater systems modularity. The financial sector and overall business environment is built upon a centralized structure defined by standardization of transactions and processes. The decentralized model disrupts current business models and with networks like Ethereum, its applications continues to grow. DApps have provided numerous reasons why it makes sense to build them given its flexibility, transparency and resiliency.
One dApp I am working with, Pitch Investors Live is the only software platform that allows entrepreneurs and startups to pitch investors live. It also connects unaffiliated entrepreneurs or project teams who wish to sell blockchain tokens as a method of capital accumulation to prospective customers who are using the app. Potential customers can request the entrepreneur or team to pitch their product and explain the benefits, costs, risks, and other pertinent information via a live streaming video. Simultaneously, other app users can watch and participate via text.
Volatility and Human Behavior
With any new market comes a price. Risks such as price fluctuations and scalability deters most users/customers from adoption. We have seen people put up their house for sale and accept Bitcoin as a form of payment. A few emptied their 401 K and other investment funds in hopes getting greater bang for their buck. Without understanding the history of Bitcoin’s evolution – currency formally identified as a commodity- nor the technology, customers make uninformed purchasing decisions.
Merchants have longed accepted cash for Bitcoin. My local electronics store in Roger’s Park, Chicago, has been accepting Cash for Bitcoin since 2013 until the Feds showed up and placed a daily limit of $1,000. The store owner didn’t have a license to operate a money exchange and with the value of Bitcoin increasing, the Feds and local police warned him of his safety.
Digital currency attracts scammers and thieves. Individuals are first to be affected. I’ve been hacked in August 2017, and the hacker with an IP address in Ohio, withdrew all my wallets in Coinbase. The hack resulted from me sharing my screen during a “tech support” call. Organizations bear the burden, too. Recall the the $500 million-worth of customers funds were stolen from a Japan-based cryptocurrency exchange? XEM, created by a Singapore-based crypto group called the NEM Foundation, took the largest hit.
To minimize your risk, install a Google 2FA for your digital wallet, store your digital assets in multiple wallets, soft and hard. Hard (hardware) wallets are not hack-free, especially when you have an unsecure network and the software is being updated. Try not to store your assets on exchanges and think about writing down your wallet information on paper and storing it in bank or personal vaults (hackers can’t get to your paper). Hacks undermine the reputation of digital assets and tools that store them thereby creating greater “FUD” – fear, uncertainty, and doubt. But with any new, emerging tech that is to be expected.
Unverifiable OTC Deals
Since Bitcoin’s creation in 2009, the digital currency has consistently been traded through off-exchange OTC transactions. Typically, information brokers serve as matchmakers who match sellers with buyers. Important to note: They don’t have direct access to both parties. Rather the representatives from both sides called “mandates” communicate directly to the brokers. The goal is for both buyers and sellers to agree on terms via signed documents with proof of funds and the actual transaction taking place in escrow like TMF which serve as the “third party.” The issue is when one side wants the other to disclose funds in separate wallets rather than go through escrow. Another issue is what I call “fishing for the best deal,” where one party abandons the deal as it had found another buyer or seller. I suggest going through a reputable OTC Bitcoin desk and working with individuals who have verified the parties and closed deals before. The rewards are high – 1% for commissions per person on let’s say, 100,000- 1 million BTC.
To conclude, the world of blockchain is highly customized, and modular with components of sharing, trust, collaboration that continues to drive its evolution. The state of the blockchain invites play for these reasons; a fundamental principle at Google that honors 20% of time for employees to engage in creative play.