How blockchain technology could decentralize not just currency, but everything

Last week I had the pleasure of attending the inaugural Cryptoeconomicon conference (centered around the O’Reilly Bitcoin and Blockchain Conference). The organizers, Cryptocurrency Research Group and Koinify, did a great job of getting together the right group to discuss the challenges and opportunities facing blockchain technology, and it was one of the most intellectually stimulating conferences I’ve been to in a while.

Although this ecosystem is still fairly early, I walked away feeling even more excited about the potential and future of leveraging blockchain technology to fundamentally change the world across various domains.

(For those unfamiliar, a blockchain is a transaction database shared by all nodes participating in a system. In essence, it is a distributed method of tracking and transferring assets online without need for a trusted party. Today, the most widely used blockchain-based system is Bitcoin. You can read more about blockchains here.)

Here are my top five takeaways from the conference:

1. Fascinating applications are emerging both on top of and outside of the Bitcoin blockchain

During the conference, there was a showcase of very interesting applications that people are working on with this technology. The applications spanned consumer and enterprise, and touched numerous industries (see below). It will be interesting to track how each of these applications (and others) evolve, including attracting and onboarding users/customers, bridging online/offline, handling scalability, and finding ways to monetize:

IBM ADEPT: IBM presented on ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry) to build a decentralized Internet of Things (read about it here). ADEPT uses Ethereum, BitTorrent, and Telehash.  A very simple example of how this technology is used is through a “smart” washer that can order its own parts, update its own software, and be easily used in the sharing economy through seamless access and payments.

Factom: Factom presented on the data layer it has built on top of the Bitcoin blockchain that can secure millions of records in the blockchain with a single hash, making the Bitcoin blockchain massively more scalable in a cost efficient manner without losing much security and auditability. Beyond just currency or digital tokens, this allows for storage of such critical information as title records, legal records, medical records, etc. Currently 75 percent of the world has insecure title to their land, and Factom is working on solving this by digitizing title records onto the blockchain.

Koinify: Koinify presented on the crowdfunding marketplace it has built using Counterparty and the Bitcoin blockchain to help fund decentralized applications. It recently completed a crowdfunding effort for GetGems, raising 2,633 BTC and selling 38 million in GEMZ. What’s even more fascinating is that a reputable venture fund decided to invest $400,000 into the holding company after witnessing the success of the crowdfunding campaign.

Ethereum: Ethereum is a platform that allows developers to easily build decentralized applications and to codify, decentralize, and secure anything from voting, domain names, financial exchanges, contracts, agreements, IP, and smart property.  A number of people from the Ethereum team were there to discuss opportunities and issues with blockchain. This is one platform where I continue to be excited about what future applications will be built.

2. Implementing blockchain applications requires cross-disciplines

What stood out clearly during this conference was that a number of issues went beyond the traditional computer science domain (though there was a large chunk of attention devoted to scalability, proof of work/stake, etc.). In fact, keynote speaker Vlad Zamfir defined cryptoeconomics (the theme of the conference) as economics for cryptographers. Beyond game theory and cryptography, practitioners of blockchain need to further explore mathematics, law, economics, privacy, etc. Some questions that were debated during the conference included: How should contract law be defined in certain scenarios? How is privacy defined within applications and with M2M? What are the incentives of participants within an ecosystem?

3. We need to build out the supporting ecosystem for blockchain

The blockchain ecosystem is in its early days, and there are bright minds developing great projects all across the world. I believe that it will continue to be beneficial for organizations to exist for the “common good” of the ecosystem. Two organizations that joined and co-hosted the conference were:

Cryptocurrency Research Group (CCRG): CCRG is a nonprofit that aims to span cross-disciplines (math, cryptography, economics, law) to study cryptocurrencies and other decentralized technologies. CCRG has already taken a great first step by organizing Cryptoeconomicon, where the community came together to discuss these cross-disciplines.

Blockchain University: Blockchain University is a bootcamp where developers can learn how to develop decentralized applications. Its goal is to bridge the gap for those who are interested in the space but don’t know where or how to start.

4. Funding in the blockchain ecosystem is a case study in itself

A number of blockchain platforms and applications have raised funding through a process where they take BTC for cryptoequity or tokens. Over the course of 18 months, over 64,000 BTC have been raised on some of the top platforms (Tim Swanson has a great post here that discussed this and others in detail). I continue to be intrigued by this method of funding and the large community that rallies around it by holding these tokens — which is a key differentiation from traditional VC or angel funding channels.

5. Contemplating trends in blockchain is a mighty task indeed

Given the nascency of this ecosystem, it can be tough to predict what trends will arise over the next few years. Tom Ding (founder of Koinify) gave a great talk on “Blockchain Trends in 2015.” One of his trends especially resonated with me: He said the first blockchain “mainstream” applications to take off will be in B2B/B2G. After seeing the potential use cases of solutions for B2B/B2G (supply chain, identity, records management, etc.), I can see a demand emerging for such technologies.

This continues to be an exciting area, and now I have even more questions and potential use cases than I had before the conference. I would welcome any feedback or thoughts  on my five top takeaways from this conference. Also, I am always interested in connecting with bright minds that are thinking about the blockchain ecosystem, so please feel free to reach out to me. For future posts please be sure to follow my twitter here.

Pearl Chan is on the US investments team at Omidyar Network covering innovative technology platforms within Consumer, Internet & Mobile. She has invested in and worked with numerous early-stage technology companies, including Change.org, NationBuilder, and EagerPanda. Prior to Omidyar Network, she spent numerous years in Private Equity and Investment Banking, and spent time in Kenya working for the nonprofit Samasource.