Understanding blockchain technology is not for the average person. This is level 10,000 on the nerd scale. Which makes for a sizable challenge if you’re a startup trying to build a business based on a technology most people will struggle to comprehend.
Here at TechCrunch Disrupt London 2015 a panel of blockchain experts was asked to come up with alternative terms to help unpack some of the complexity.
Steve Waterhouse, a partner at blockchain and Bitcoin investment firm Pantera Capital, had the most compact and accessible suggestion — offering the single word: ‘decentralized’.
Vitalik Buterin, founder of independent blockchain platform Ethereum, plumped for ‘crypto 2.0′. Which probably isn’t much less techie than blockchain, if we’re keeping count.
Austin Hill, co-founder and CEO of Blockstream, which builds sidechains — aka “parallel blockchains that are interoperable” — initially objected to the entire exercise, dubbing it “somewhat marketing games”. Which is exactly the point. The complexity of blockchain is going to need some shiny marketing gloss applied on top of it if mainstream consumers are going to be persuaded to trust their home insurance to a blockchain-based insurance provider, for instance, or their life-savings to a decentralized bank.
Hill’s eventual suggestions were “distributed ledger technology” and “programmable trust infrastructure”. So still pretty dense concepts there.
Although, earlier in the panel, he also described blockchain as a “massive decentralized trust machine”, which starts to sound a little more approachable.
Marketing blockchain to the masses is clearly going to take more than one ten-minute brainstorming session.
“The general approach to thinking about blockchains is programmable trust infrastructure,” said Hill. “Because you can really start to program your trust in the rules or the concept and that’s one of the key benefits, because you can remove systemic risk.
“The blockchain acts as a real-time a-priority audit mechanism. And when you start to get into a longer term view, that gets really exciting.”
The current system of audits — i.e. doing spot checks in the hopes they will be representative of the business’ financial processes — could be entirely replaced by continuous blockchain traceability, said Hill. So, in theory, you’d never have to do another autopsy audit in cases where those spot checks spectacularly failed to pick up on fraud — like an Enron. Because you’d be auditing as you go along.
Another promising blockchain-powered idea Hill pointed to is transactional insurance for the p2p economy.
“We see a whole bunch of upstart players across industries. I saw one recently in the insurance industry that’s trying to do transactional insurance for the p2p economy, so if you’re an Uber driver for two days a week and if you’re an Airbnb renter for the weekend how do you get insurance to cover those different parts of your use-case? And they’re looking at creating a blockchain powered insurance marketplace. And that’s exciting. That’s an exciting use-case that shows the novelty,” he said.
Buterin also pointed to promising insurance projects being built on the Ethereum network, including one for delayed flights.
“The interesting thing there is the way that that works technically is there exists a service that cryptographically verifies secure web pages and scrapes data from them and actually pushes that to smart contracts directly,” he said. “There you go, there’s a decentralized insurance market.”
Other dev groups Buterin said he’s excited about are those integrating blockchain into the Internet of Things — so using the tech to keep track of the ownership or rental of physical objects.
“You could imagine something like a completely automated system for renting bikes that’s just done completely over blockchain crypto-payments. And theoretically just sort of start it up and it works completely autonomously,” he said.
“There’s lots of different things that you can do and for me personally it really is the broad range of things that you can do with it that excites me,” he added.