The Blockchain Economic Forum offers the technology’s tricks and treats
The New York City event showcases the best advantages and the worst hype of this promising emerging platform.
It’s perfectly appropriate that the opening day of the Blockchain Economic Forum was held at a New York City hotel on Halloween, since the event highlighted the emerging technology platform’s tricks and treats.
Fortunately, the treats are plentiful. Blockchain provides a distributed, verifiable and secure way to record all the steps in a transaction, and the details are available almost immediately to participants.
Although blockchain is still relatively slow for the fast-paced ad tech space, Kochava and NYIAX, to take two examples, are among those planning to use blockchain as a way to solve the problem of transparency in the ad tech industry.
Additionally, blockchain enables Smart Contracts, which are programmatic agreements that generate their own settlements. In other words, the Smart Contract captures the understanding that this ad of yours will run in that web page for this many impressions, and, when it does, the Contract automatically generates the payment. Obviously, agreements that trigger their own settlements could cut out a number of middlemen.
And there’s blockchain’s capability to generate cryptographically protected units of value, whether as tokens whose value can be set or as a kind of market-determined currency, like bitcoin. Warsaw-based influencer-marketing firm indaHash, for instance, is planning to generate its own bitcoin-like Coins to pay influencers across multiple countries, so as to avoid dealing with multiple banking systems.
Innovative uses of blockchain’s best features were on display at the Blockchain Economic Forum. Some, like Hoqu, are still in the fundraising/prelaunch stage. That startup wants to become the “world’s first decentralized affiliate platform,” employing blockchain transactional transparency to increase efficiency and reduce fraud.
More treats and the tricks
Shopin is piloting a platform where shoppers voluntarily reveal their purchase histories in order to receive more personalized recommendations, with blockchain providing transparency plus tokens from retailers eager to encourage customer loyalty. VLB Tokens is using tokenization to reduce middlemen in the automobile business, covering providers of auto insurance, finance, sales, repair and spare parts.
Rentberry is utilizing the technology to track transactions in its next-gen platform for long-term rentals. It even offers a crowd-sourced market where community members can invest in renters’ security deposits, with their returns based on the renters’ trust and dependability scores.
Simply Vital Health is a health data exchange, backed by Yale and other big-name institutional investors, that intends to employ the technology in support of the massive compliance requirements for managing, tracking and sharing health data.
And so on. Blockchain is on its way to becoming the database of record for transactions, and its tokenization may change customers’ expectations of what rewards they should receive for their purchases, loyalty or data.
As for the tricks, the conference demonstrated that some of the worst parts of the Internet Hype and Bubble are coming back in the Blockchain Boom.
The best example was a nearly two-minute, amateurish video that was shown to the several hundred attendees at the Conference opening. Skirting the border of parody, it quickly described key moments in the history of the human race as a battle between centralization — mostly in the form of governmental regulation — and free markets. The Great Depression, we were told, was the result of too much centralization, as was every other historical disaster.
This propaganda appealed to many in the VC-heavy audience and was echoed for at least a couple of panels. Somehow, the distributed ledger nature of blockchain and the ability to generate private units of value became a call for no governmental oversight.
Similarly, several panelists claimed that the internet has thrived because it is not regulated. Of course, this will come as news to the Federal Trade Commission’s efforts to keep influencers from hiding their sponsorships, the Federal Communication Commission’s initiative to protect non-preferential Net Neutrality, or the upcoming General Data Protection Regulation (GDPR)’s effort to protect consumer data, among countless other examples.
The key driver here seems to be those blockchain advocates who pretend that bitcoin and similar private crypto-currencies don’t need no stinkin’ oversight. The Forum was organized by LAToken, a cryptocurrency trading platform.
Of course, real history is unfortunately populated with examples where poorly regulated speculative investment markets led to widespread disasters. (See The Great Depression and The Great Recession, for starters.)
In fact, the no-oversight crowd appears to have forgotten that the launch of the bitcoin era was itself characterized by a series of spectacular financial disasters among self-regulating bitcoin exchanges, like Mt. Gox.
An emerging blockchain ecosystem promises to squeeze out massive inefficiencies, offer widespread transactional transparencies and incentivize customers with tokens. But it will also strain credibility if proponents insist that it can guarantee privacy and well-run markets all by itself, when history shows it cannot.