Since the last entry, we did extensive research on which ICOs have been doing well, and as part of that we read a lot of the white papers out on TokenMarket (https://tokenmarket.net). While many of them are not well written (typos, no specifics on their technology, what problem they are solving, etc.) some like Civic, Tezos, and UNIKRN did a great job. We also talked with a number of experts like Andy Singleton who has helped us understand some of the blockchain topics like attestations and Byzantine Fault Tolerance (see previous blog about that).
What we found is that there are some known big issues and limitations to blockchains which inhibit growth, such as speed and scale (that’s where Tezos comes in, UNIKRN solves a specific regulatory issue in the esports industry). Until those limitations are addressed, industries such as healthcare, which holds great promise for blockchain, will be slow to move. While those are solvable problems, and there is opportunity there in the short term, there are some bigger issues around the corner for blockchains and cryptocurrencies that hold even more promise – and that’s where we have been focused with the ICO we are looking at for AuthenticID and their ATHID tokens.
Right now the blockchain private key is great for what it is, and allows people to remain anonymous if they want to – but that’s a very two-dimensional solution for something that has promise in so many industries. Blockchain and cryptocurrencies make so much sense the coming wave of adoption is likely to be on the same scale as the internet itself. And as part of that – one of the things that will emerge is the value, use, and importance of being able to authenticate the identity of the people involved with all of the events, transactions, and interactions in a blockchain – that is going to be major – and it will be key in both private and public blockchains.
Some of the obvious things that will happen is that financial services organizations will be able to meet the requirements of Know Your Customer (KYC) and Anti-Money Laundering (AML) specifications – those are very big markets that will take off very fast. Then there are things like self-sovereign data, privacy, verifiable claims, and attestations which take authentication from a two dimensional matter to three-dimensional overnight. People can still stay anonymous as like as they want – and they can even come up with some clever or funny name / handle they go by, and as long as their identity has been authenticated, all sorts of things become possible that are not possible today. Verifiable claims is something from the business side, where someone needs your driver’s license, or a bank statement or something, even a credit card number, if you have authenticated the identity of the person in question, then the information they are transmitting is that much more trusted. Privacy and self-sovereign are more at the individual and what they want to reveal about themselves. A good example is when someone is buying alcohol and they need to prove they are at least a certain age, like that they are 21. In a self-sovereign model, the person may not want to share their name and address, they may only want to prove that they are over 21. There are countless use cases like that in healthcare and logistics and financial services that are going to happen and in a few years we will look back and be amazed that all we had was private key.
Technology is important here, but customer experience matters a lot in all of this.
So there are probably 100 different businesses that could be started today to enable the use of identity in public and private blockchains and enable all sorts of useful and legal transactions using cryptocurrencies. That’s where we think the real promise is in ICOs and that’s why we think it makes sense that so much money is pouring into them right now. We know that some of the funds are coming from Chinese markets for well understood reasons, but we also know money is coming from other places as well, and we think it’s all going to be a pretty exciting ride. There will probably be a bubble like there was with the internet, and that’s fine as long as the companies you choose to start, or back (or both) are focused on real value – you’ll be fine.
So that’s where we have landed with ICOs and cryptocurrencies and blockchains. There are some pretty wacky ones, and some are just being done because so much money is flowing, but there are some with really clear value and that’s why we think the one we are working on will also be well received.
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