Blockchain: Blueprint for a New Economy

beginning of any new technology era, the

technical details of “what it is” and

“how it works” are of interest to a

popular audience. This is not a real

barrier; it is not necessary to know how

TCP/IP works in order to send an email,

and new technology applications pass

into public use without much further

consideration of the technical details as

long as appropriate, usable, trustable

frontend applications are developed. For

example, not all users need to see (much

less manually type) the gory detail of a

32-character alphanumeric public

address. Already “mainstream wallet”

companies such as Circle Internet

Financial and Xapo are developing

frontend applications specifically

targeted at the mainstream adoption of

Bitcoin (with the goal of being the

“Gmail of Bitcoin” in terms of frontend

usability—and market share). Because

Bitcoin and ewallets are related to

money, there is obvious additional

sensitivity in end-user applications and

consumer trust that services need to

establish. There are many

cryptocurrency security issues to

address to engender a crypto-literate

public with usable customer wallets,

including how to back up your money,

what to do if you lose your private key,

and what to do if you received a

proscribed (i.e., previously stolen) coin

in a transaction and now cannot get rid

of it. However, these issues are being

addressed by the blockchain industry,

and alternative currencies can take

advantage of being just another node in

the ongoing progression of financial

technology (fintech) that includes ATMs,

online banking, and now Apple Pay.

Currency application adoption could be

straightforward with trustable usable

frontends, but the successful mainstream

adoption of beyond-currency blockchain

applications could be subtler. For

example, virtual notary services seem

like a no-brainer for the easy, low-cost,

secure, permanent, findable registration

of IP, contracts, wills, and similar

documents. There will doubtlessly

remain social reasons that people prefer

to interact with a lawyer about certain

matters (perhaps the human-based

advice, psychoanalysis, or validation

function that attorneys may provide), and

for these kinds of reasons, technology

adoption based exclusively on efficiency

arguments could falter. Overall,

however, if Bitcoin and the blockchain

industry are to mature, it will most likely

be in phases, similar to the adoption

pattern of the Internet for which a clear

value proposition resonated with

different potential audiences, and then

they came online with the new

technology. Initially, the Internet solved

collaborative research problems for a

subgroup: academic researchers and the

military. Then, gamers and avid

recreational users came online, and

eventually, everyone. In the case of

Bitcoin, so far the early adopters are

subcultures of people concerned about

money and ideology, and the next steps

for widespread adoption could be as

blockchain technology solves practical

problems for other large groups of

people, For example, some leading

subgroups for whom blockchain

technology solves a major issue include

those affected by Internet censorship in

repressive political regimes, where

decentralized blockchain DNS (domain

name system) services could make a big

difference. Likewise, in the IP market,

blockchain technology could be

employed to register the chain of

invention for patents, and revolutionize

IP litigation in the areas of asset custody,

access, and attribution.

Bitcoin Culture: Bitfilm

Festival

One measure of any new technology’s

crossover into mainstream adoption is

how it is taken up in popular culture. An

early indication that the cryptocurrency

industry may be starting to arrive in the

global social psyche is the Bitfilm

Festival, which features films with

Bitcoin-related content. Films are

selected that demonstrate the universal

yet culturally distinct interpretations and

impact of Bitcoin. The festival began in

2013 and has late 2014/early 2015 dates

in Berlin (where Bitfilm is based),

Seoul, Buenos Aires, Amsterdam, Rio,

and Cape Town. Congruently, Bitfilm

allows viewers to vote for their favorite

films with Bitcoin. Bitfilm produces the

film festival and, in another business

line, makes promotional videos for the

blockchain industry (Figure P-2).

Figure P-2. Bitfilm promotional videos

Intention, Methodology, and

Structure of this Book

The blockchain industry is nascent and

currently (late 2014) in a phase of

tremendous dynamism and innovation.

Concepts, terminology, standards, key

players, norms, and industry attitudes

toward certain projects are changing

rapidly. It could be that even a year from

now, we look back and see that Bitcoin

and blockchain technology in its current

instantiation has become defunct,

superseded, or otherwise rendered an

artifact of the past. As an example, one

area with significant evolving change is

the notion of the appropriate security for

consumer ewallets—not an insubstantial

concern given the hacking raids that can

plague the cryptocurrency industry. The

current ewallet security standard is now