Blockchain and the Power of Singularity

Set on Sir Richard Branson’s Necker Island, the third annual Blockchain Summit, hosted by BitFury, a leading full service Blockchain company, and Bill Tai, a venture investor and technologist, has come to a close. This event was an intimate, if perfectly balanced, gathering of technology, policy, investment and business leaders from around the world and across sectors. Topics ranged from the public policy implications of what is being heralded as a foundational technology, to new emerging business models that can ride on the very rails that enabled the global bonanza of digital currencies like Bitcoin. A key question that underpinned the Summit is if Blockchain could not have existed without the Internet, what could not exist without Blockchain?

Blockchain technology can undoubtedly change industries, especially those that labor under often byzantine, opaque and friction-laden business models. While many of the early pioneers are focusing on finance and insurance, the opportunities for this radical technology may very well reorder society as we know it. The remarkable case of Estonia, for example, shows a country reinventing itself into a future-proof digital state, where citizen services are rendered nearly instantaneously and to people all over the world. Similarly, promising work inspired by the famed Peruvian economist, Hernando de Soto, on improving land registries is being carried out by BitFury in a host of countries. With land and property being the two largest assets people will own - and the principal vehicle of value creation and wealth transfer - an unalterable, secure and transparent registration process should give the world comfort and elected leaders longevity.

What drives this unique technology is the power of distributed singularity, from which Blockchain’s identity pioneers like Dr. Mariana Dahan, who launched the World Identity Network on Necker Island, and Vinny Lingham of Civic, draw their inspiration. Blockchain operates on the basis of a distributed ledger (or database) system, inexorably marching forward recording and time-stamping transactions or records. While some may herald Bitcoin as Blockchain’s “killer app,” it is easy to maintain that the killer app is not the digital currencies that ride on Blockchain’s rails, but rather the rail system altogether. Two trains can ride on rails. But a high-speed maglev train is a decidedly faster mode of transport than a steam engine. Just as the maglev makes little or no contact with the rails enabling low-friction transport, the Blockchain can greatly reduce the friction in how the world transfers and records value. If the Internet augured frictionless information sharing, Blockchain can augur frictionless value transfer. Herein lies the domain of truly profound change - accepting that Blockchain is still in the era of a thousand flowers being planted, many of which began blossoming on Necker Island.

For now, the Blockchain standards war - which in reality is an incredibly collaborative search for use cases - is largely being waged in the cash transfer market, with firms like Bitt, founded by the Barbadian entrepreneur, Gabriel Abed, and BitPesa, founded by Elizabeth Rossiello, emerging with low-friction highly scalable business models. What is most encouraging is that these firms, have not shied away from regulatory regimes, but rather embraced them, greatly legitimizing the poorly named crypto currency market. BitPesa has received UK regulatory approval from the Financial Conduct Authority (FCA), which is one of the most stringent financial regulators in the world, while Bitt has created a veritable pan-Caribbean digital currency accepted by many regional central banks. In short, digital currency and frictionless asset transfer are not going away and the more pioneers like Bitt and BitPesa harmonize with established financial norms, the more this space can thrive.

The Blockchain Summit on Necker Island was all about encouraging breakthrough innovation across all sectors. If the Internet was truly a disruptive technology, Blockchain is an augmenting technology, that can greatly improve and amplify many established business models and forms of governance. At a time when the world is gripped by profound changes driven by an erosion of public trust in business, institutions and government, a trust engine like Blockchain can begin to shore up accountability and transparency. Similarly, with rampant cyber-threats hobbling companies and countries around the world, Blockchain cannot only serve as a vital source of transparency - recalling that sunlight is the greatest disinfectant - it may very well serve as a global disaster recovery and business continuity engine. Blockchain’s security properties are often undersold, however, these are among the most important features of this technology. Indeed, hardwired into Blockchain’s distributed structure are the very best practices of cybersecurity redundancy that so many organizations struggle to abide by.

Where minds begin to race when it comes to Blockchain and where Blockchain Billionaires will likely emerge, is in the unitary approach (and smart contracting features) to value transfer. The sharing economy has undoubtedly tapped people’s willingness to forego traditional asset ownership for fractional, usage-based access. Blockchain takes this intuition even further by enabling these same market dynamics to occur, but on a rail system robust enough to survive in Thomas Friedman’s hot, flat and crowded world. Envision a skills engine enabling people to repurpose themselves, obtaining vital (verifiable) credentials to enter the workforce or to find work following a setback or job loss? Without Blockchain this proposition is not only cost prohibitive, it is incredibly centralized favoring a dated algorithmic hiring model that has left millions of workers behind. With Blockchain, this type of “reinvention engine” is not only possible, it can be developed with sufficient autonomy and transparency across stakeholder groups ultimately becoming a utility.

Indeed, one of the most promising companies focusing on Blockchain applications is PowerLedger in Australia, which was founded by Dr. Jemma Green. Dr. Green, travelled more than 40 hours carrying her young daughter in hand and her weight as one of the world’s true Blockchain visionaries. Her firm taps the power of singularity and decentralization in the Blockchain, as well as underscores the ability to harness renewable energy in ways (and in places) never thought possible. Fractionalizing urban energy is as important to human adaptation and development, as building a rural energy matrix that incorporates micro grids and new distribution and payment models. PowerLedger is well on the way toward solving this challenge and Blockchain will be at the center of both.

Blockchain is here to stay and the exuberance of its most ardent enthusiasts (who are on the verge of a Bitcoin “civil war”), of which there were many on Necker Island, should be tempered with the reality that all breakthrough innovations are decided by the market. For this, large firms and established models of organizing and transferring value have been cautious to dismissive of Blockchain. This posture may consign many of these players to the wrong side of history, or worse, irrelevance. Indeed, the emergence of global industry bodies like the Global Blockchain Business Council, which is quickly establishing chapters around the world, as well as the Blockchain Trust Accelerator, are aiming to normalize this technology and, critically create a lexicon and library of use cases that are not threatening in the world’s halls of power.