An approachable position on the Blockchain ecosystem: Capturing Opportunity in the next Digital Revolution
“To see things in the seed, that is genius.” Lao Tzu
The world is changing, and the way we interact with each other and with entities (businesses) is evolving. Use cases that have been predominantly human centric and physical are moving to be human centric and digital. This underlying change is not instantaneous, but rest assured, it is transformative. With this comes a new set of expectations and opportunities. The vision of a digital based economy requires different technology and infrastructure. The key components have remained stable: connectivity, speed, and ease. However, the lens has shifted to solve for scale/volume, access, and governance. This is where blockchain and technology derivatives can provide immense value.
What is “Blockchain”?
A blockchain is an underlaying technology that represents a fundamental evolution in the foundation of our society and economy. Blockchain is not Bitcoin, or any of the much hyped cybercurrencies or NFT (Non-Fungible Token) collectibles, instead blockchain protocols solve several key problems with the current iteration of the internet. Blockchain technology allows new flexible and non-fragile methods to?deal with identity, ownership, payment, and governance that brings new freedoms and benefits to everyone, not just a select few. In terms of technical adoption, blockchain use is still in the “early adopter” category and has yet to “cross the chasm.” {reference exhibit below}
At its core the blockchain and associated smart contracts are just another phase of development of distributed databases and programing languages; the same things that we use every day when we access platforms and products by companies like Facebook or Google (Gmail). The key differences are found in the management and control. As opposed to a traditional distributed database - pretty much any cloud-based model with geographic node peering - blockchain technology enables a set of peers to work together to create a unified, decentralized network. The peers can communicate and share information or data with the help of the consensus algorithm. As such, there is no need for a centralized authority, which makes the whole network more trustworthy when compared to other networks.
Trust in a Digital World
The utilization of a consensus algorithm creates a foundation based on trust, so that two unknown parties can transact with confidence without the need for a central authority, like a bank or government or credit agency. This peer-to-peer capability can help prevent monopolies by providing individuals the tools and processes to conduct business with trust and at scale. Once there is common understanding, it is easy to imagine blockchain versions of businesses like Amazon, PayPal or Facebook where the need for a central authority to authorize sellers and/or payments is not required, thus allowing less friction in transactions and reducing the cost by removing the middleman.
Digital Property
The same logic can also be applied to issues like copyrights, certificates of ownership and identification documents. Blockchain technologies can provide for highly customizable, unique digital and physical ownership and identity management that both provide more resilience than a central authority while providing more benefit to the end-user. One example can be found in the world of digital art. In the web2 world a digital photographer might sell a photograph to Getty Images. Getty then provides that image in a searchable catalogue for users to pursue and license. Getty takes a sizable cut of the proceeds and passes on the rest to the photographer. When reimagining that model enabled by blockchain, all the functions performed by Getty would be handled by the blockchain, creating a better price for the buyer and more revenue for the seller. Additionally, the photographer now has additional tools at their disposal, and consider deploying these photographic assets in the form of an NFT could also yield additional benefits like a portion of secondary and future sales.
Traditional Models
Some skeptics would argue that there will be limited need for companies (under the current capitalist structure) in the new blockchain economy. We believe that could not be further from the truth. In fact, tapping into the new possibilities created will provide huge rewards for all participants, stakeholders, and market makers. Just like the early internet and digital technologies brought the demise of Kodak film cameras and Blockbuster DVD movie rentals, they also spawned tremendous new growth in digital photography and streaming media services. This is not a zero-sum game, rather it's the expansion of a vibrant and dynamic marketplace that is opening to companies, creators, and consumers in new and exciting ways.
The forthcoming Sea Change
Blockchains and smart contracts are similar to TCP/IP and web standards of the early 1990s. ?A blockchain is not singular coins or frantic Ponzi schemes, but rather incredibly well designed, architected, and engineered systems. The next evolution of our digital, telework, creator driven economy will be based on blockchains, programmed with smart contracts, and verified by consensus algorithms. The time is now to explore the ramifications of the new economies and marketplaces, identity opportunities to leverage and extend existing assets and create new products and services that capture the new world of distributed value exchanges.
Automotive Embracing the Technology
Evidence of the blockchain’s impact on the automotive industry can already been seen in projects and consortiums that are developing standards and actively prototyping. Consortiums like Mobility Open Blockchain Initiative (MOBI) have authored standards for Vehicle Identity (VID) and Electric Vehicle to Grid Integrations (EVGI) that allow member organizations to write applications that work across individual company silos.?MOBI’s new Trusted Trip and DRIVE program provide third party verification for proof of location, custody, and emissions, enabling sustainability efforts around carbon footprint reduction to be verified. We are also observing lots of activity taking place within the Manufacturer population. OEMs like BMW, Mercedes-Benz and Tesla are adopting blockchain applications for supply chain. Jaguar Land Rover partnered with IOTA DLT for an IOT Smart Wallet and an Access Control solution. FIAT created a token and program incentivizing vehicle owners via rewards for sustainable driving behaviors. Most recently, Porsche, the perennially forward-thinking car manufacturer, which first built a Vehicle-to-Owner connection on the XAIN network, recently issued and sold a vehicle design document as an NFT and furthermore is now operating an online platform on which enthusiasts can collect and exchange Porsche branded digital trading cards as NFTs.
This is only the beginning.
Collectively we are early.
We hope that we captured your attention and maybe whet the proverbial appetite. Over the coming weeks, it is our aim to publish pieces to illuminate areas of this ecosystem in hopes of education through the lens of our industry, automotive. From higher funnel learnings around protocols to the blossoming possibilities around NFTs, Stablecoins, and Social Tokens; we want to open the aperture on our industry to the opportunities and underlying technologies.
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Stay tuned.
Best,
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Resources:
https://www.ledgerinsights.com/tesla-to-explore-blockchain-for-sustainable-batteries-with-miner-bhp/
https://www.ledgerinsights.com/jaguar-land-rover-partners-with-iota-dlt-for-access-control-solution/
Senior Consultant @ NCS Partners | Digital Transformation
11 个月Jonathan, thanks for sharing!
EV Strategy at Kelley Blue Book & Autotrader
3 年Keep up the good work JS!