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"If you always do what you've always done, you'll always get what you've always got." – Anon

Planning for an uncertain future

I was forwarded an article this week that included an honest appraisal of launching a new product on the Ethereum platform. The initial benefits of selecting Ethereum are clear, it offers a layer of abstraction and simplification over blockchain technology, while providing the scale required for security. But there are also downsides to building on this shared platform. As a result of their experience, the company is the article is now contemplating a move to an alternative technology, and they are not the only ones. A change in technology will represent a costly delay of investment in their products growth.

In times of accelerated innovation and early adoption it’s important to fully assess the potentially business impacting dependency you create through the technology you select.

Many of us monitor the Cryptocurrency markets on sites like CoinMarketCap.com and watch the price of Bitcoin, Ethereum, Ripple and others move like stock market shares. For many technology companies Ethereum is not an investment, it’s the currency required to power the infrastructure that underpins their Business. Operations on Ethereum are powered by Gas.  As Gas is purchased in Ethereum, the price of Ethereum has a direct impact on the cost of using the infrastructure, which in turn has a direct impact on the cost of powering their business.

Imagine if your electricity costs had increased at the same rate as Bitcoin (+3,716.31% in the last 2 years ), or the cost of your internet connection next month was unpredictable?

The Canadian company CryptoKitties created quite a stir in December last year when after their game received global news coverage they saw a huge spike in demand. Pending transactions on Ethereum increased six fold, and at one point CryptoKitties accounted for over 10% of all of Ethereum network traffic. Other users of this shared infrastructure experienced longer confirmation times, and as transactions compete to be processed based on the Gas Price offered, a significant increase was required if you wanted to ensure your transactions were executed quickly. A company that has no relationship to another, in a completely different industry, instantly changed the costs for another company to do business.

How do we plan for an uncertain future?

Some of you may have heard of the concept of ‘Late Binding’ – a phrase that can be traced back to the 60’s where it referred to the process of looking up arguments in a computer program at the point where an action was being performed (the performance impact meant it was far from best practice!). When I talk about Late Binding I often use the example of a swimming pool.  Specifically the solution required for getting in and out of the pool. A designer could choose to create concrete steps as part of the pools design, to  attach a ladder to the side of the pool, or they could choose to create a portable ladder that can be lowered into the pool when needed**. The latter being an example of ‘Late Binding’. You created a solution to solve the problem of getting in and out of the pool, but you now also have a solution for paining your ceilings. It’s a solution that you created before you knew the problem.

I try and apply this type of thinking to every problem, and its one of the reasons that on choosing Ethereum for the DigitalTown CityShares we opted for an ‘invitation only’ proof of authority model and a design, that should we choose to, would allow us to seamlessly migrate to another underlying Blockchain technology without impacting our users.

You may be asking at this point how you build your product without selecting a technology – and of course, you can’t. But there are companies that are creating platforms that enable the speed to market of Ethereum, but that support multiple underlying blockchain infrastructures. As your application interfaces with a Blockchain independent technology, you are are able to move between underlying Blockchain technologies without changing your application.  It’s a bit like when we moved to Virtual Machines that meant we no longer cared about the physical hardware.

I have been recently been working with Robert Mao, CEO of Arcblock, who has architected a solution to this problem and who are currently hosting a Token Private Sale. Arcblock has introduced the concept of an ‘Open Chain Access Protocol’ which enables any application to connect to multiple blockchain protocols. This means that when developers build on the Arcblock platform they have the freedom to evaluate blockchain protocols and switch between them without any significant changes to their application. With the blockchain technology landscape moving at pace that is comparable to the early days of the internet, these types of solutions will enable all of to get our product to market without incurring significant technical debt as technologies evolve.

#DigitalTown #CityShares #Blockchain #Arcblock

 

*More info – https://ethgasstation.info
** It’s just an example – go with it.

How Blockchain will clear away the Clouds

2017 was the breakout year for Blockchain and its benefits and current limitations are now well understood. 2018 will see distributed applications drive the next wave of Blockchain innovation.

Just as we moved the Company Datacenter to the Cloud, we will gradually move from the Cloud to distributed applications built on Blockchain technology. A shift primarily driven by a demand for increased control over personal data security, we will build our networks of friends, family and business contacts, and our data will securely reside on the devices that form the network.

These new distributed applications will not run on desktop computers or laptops, they will run on our smart phones. Blockchain opens the door to solutions that securely store data across a network of connected devices, technology that enables us to share data peer-to-peer without the need for a datacenter.  Mobile devices have the connectivity, processing power and storage to make the Internet a second tier service.  The latest 5G wireless network offers speeds of up to 10 gigabits per second and existing 4G networks already offer speeds beyond those available to many homes. Apples new iPhone X has been benchmarked at speeds comparable to that of a MacBook Pro, and the amount of device storage available has grown every year as users demanded higher resolution images and video.

To demonstrate how close this technology now is, consider a Blockchain that stores pointers to fragments of data that make up millions of data files – Images, Documents, Videos etc. These fragments are stored on thousands of connected devices. Every time you created a file, rather than storing it in a Cloud (which is ultimately a service hosted on physical servers in a datacenter), it would be split into hundreds of fragments and spread across a network of devices. You control who has access to the items you share, inviting people and their devices to join your network, sharing your files through a simple Distributed App (dApp).

A request for a file would see the fragments retrieved and reassembled on demand. Data would be encrypted at rest which means it’s useless to anyone who does not hold the key that enables the recall and reassembly of the files. Each fragment would be stored multiple times to ensure accessibility and resilience. A user would have access to almost unlimited storage and there would be no datacenter to hack.

The platform development would be funded by its own Currency. Users would buy Tokens and pay a small amount for the storage or retrieval of a file, and would receive payment in return for the space they make available to other users.

We are starting to see Distributed Application development platforms being released, removing a layer of complexity and the need for a developer to have deep knowledge of the underlying Blockchain technology.

While not mobile device focused, several companies have already realized the concept of Decentralized Cloud Storage.

Storj – https://storj.io / Whitepaper are based out of Atlanta,GA and have over 40,00 users, with a global footprint covering 70 Countries. Their ICO in 2017 raised $30M, and they had previously raised $3M in seed funding from Google Ventures, Qualcomm Ventures and Techstars. They use Ethereum smart contracts.

In their own words – “Storj is a platform, cryptocurrency, and suite of decentralized applications that allows you to store data in a secure and decentralized manner. Your files are encrypted, shredded into little pieces called ‘shards’, and stored in a decentralized network of computers around the globe. No one but you has a complete copy of your file, not even in an encrypted form.”

Filecoin are another company promoting decentralized storage – https://filecoin.io / Whitepaper. The Filecoin Sale completed in September raising over $205M in USD, ETH, BTC, and ZEC.

“The Filecoin network achieves staggering economies of scale by allowing anyone worldwide to participate as storage providers. It also makes storage resemble a commodity or utility by decoupling hard-drive space from additional services. On this robust global market the price of storage will be driven by supply and demand, not corporate pricing departments, and miners will compete on factors like reputation for reliability as well as price.”

Other companies working in this space include Sia https://sia.tech and MaidSafe https://maidsafe.net

The shift from Cloud to distributed applications will not happen overnight, many large organizations are only just getting to grips with the cloud, but distributed applications will grow in popularity in 2018 and their impact will be significant.

#DigitalTown #BlockChain #dApps #IOP

Pay ME per view

It’s over 10 years since Google bought DoubleClick the online advertising company for a reported $3.1 billion.  It is estimated that in 2017 US companies will have spent over $200 Billion dollars on online advertising – all just to get our attention.

Everything we buy online today is recorded, analyzed and predictions are made on what we are likely to buy next. Type a few keywords into a search engine and then visit a website with embedded adverts and the targeted advertising will begin. We are grouped into categories based on our browsing history, location* and habits. Applications frequently offer ‘free’ versions with embedded adverts. App based games offer incentives to watch commercials or interact with demos of the latest games. Streaming services like Netflix record everything you watch and use the data to power ‘recommendation’ engines that predict programs you may like, and to decide the types of programs to create in the future.  Companies are competing and paying for your time, but instead of being rewarded you are the product the advertising agencies are selling.

Over the Holidays I watched my eight year old son playing a game on his iPad. In order to aquire an item he needed in the game he had to watch and interact with an Ad. Someone had clearly put some time into developing this interactive advertising experience. It required him to play part of a game, responding to various prompts and clicking some highlighted buttons as overlaid text attempted to explain why this new game was the greatest.  I observed him hit one button five times, another two, then as soon as the ‘x’ appeared in the top right corner he closed the Ad and continued with his game. If the add was 10 seconds, he interacted for 10.01. He didn’t process anything. He clicked what he had to click to generate the prompt to close the advert and continue with his game.  It was impressive to watch.

A few things came to mind:

1 – The advertiser really has no idea who is viewing the advert.

2 – How much money is being being paid out to ‘bots’ simulating Ad clicks.

3 – How bad have conversation rates become. Advertising still works, if it didn’t we wouldn’t see it everywhere, but more then ever this is a numbers game – X displays = Y clicks = Z sales.

4 – If I am the target of your advert, and you want me to pay attention to your product, why don’t you just  “Pay me per view?”

I took a look at online Ad fraud (Ads being clicked by Bots). According to a WhiteOps paper published in May 2017 (https://tinyurl.com/k9mqpfa) fraud losses for 2017 are estimated to be around $6.5 billion globally. The number is reported as lower than the value reported for 2016. The survey is across a consistent list of companies, each of which have implemented technology in 2017 to detect and block bots. The truth is that bots are getting smarter and its almost impossible to tell what is a real person. The fraud number could very easily be higher and the bots could be winning. Either way, the fact remains that a company has no way of guaranteeing a person in their target audience actually viewed their Ad.

Most of the Ads we see on websites or inside Apps are served up by affiliate marketing companies (and there are thousands). The Site/App owner gets paid per click, often just a few cents. Paying the viewer of the advert would require a solution to track micro payments to millions of internet users every day.

So what has this got to do with Blockchain?

Imagine you created a blockchain smart contract that recorded the adverts people viewed. It would not matter whether the add was displayed on a Phone, Tablet, Laptop, SmartTV or in a store as the user enters an email address for their receipt – one smart contract could be updated by any number of authorized nodes. The contract would record that it was ‘Mike’ that read and/or interacted with the advert. The micro payments made to the advertising agency could now be made directly to the person who viewed the advert, and what’s more, for a fee that person may decide to share more information so that advertisers can target them better.

We could create a Token to be used to purchase advertising based on targeting rules, fund a common platform to serve the adverts, and importantly pay people to view the adverts. Blockchain would enable a very large user base to be managed, multiple independent advertisers and points of advertising to participate, and micro payments to be tracked transparently. Nodes would be by invitation, immediately removing the ‘Bot’ issue and enabling a fast ‘Proof of Authority’ model to be used.

Any user could register to be paid for adverts they view. The user could choose to be anonymous, or be paid more per view as they expose more information about themselves and the adverts become more targeted and valuable to the advertiser.

The real challenge here is how we deliver the adverts.

Has anyone taken on this challenge?

A few months back I was sent a link to a company called Brave software. Their website makes the bold statement “Digital Advertising is broken“.  Their CEO is Brian Eich. If the name is familiar to you its because Eich was the guy who created Javascript, co-created Mozilla and helped form the Mozilla Foundation that is the organization behind the Firefox browser.

Brave announced the Basic Attention Token (BAT) in 2016. BAT is an ERC20 token built on top of Ethereum.  Brave’s goal was to create a currency for decentralized, open source, blockchain-based digital advertising. In Brave’s solution the entire platform is powered by Basic Attention Tokens. Advertisers will purchase Tokens and transfer them to publishers based on the attention of their users. The users themselves will receive tokens for viewing the Ads. The users personal data is kept private, but users are grouped for targeting. Advertisers experience less fraud, better analytics and reporting.

Braves delivery mechanism was to launch their own Web Browser. This is a cool browser as it blocks adds and trackers from existing advertising solutions (I wrote this post through Brave and it reports 138 Trackers blocked and 63 Ads blocked!). Blocking all these Ads and Trackers has a very positive effect on performance.

Brave’s use of Blockchain is smart and they are providing a real solution to a real problem. The challenge they face is that as a user Ads don’t bother me enough to change my browser, and I suspect the value of BAT’s I earned would be low. The cost inefficiencies of online advertising are a problem for the advertiser not the user. Until there is strong driver for the users to change browsers I suspect adoption will be low. Without strong user numbers the value to the advertisers is low.

This is one company I will be watching.

 

Addendum – Since writing this I have discovered Earn.com. This space is moving fast !

 

#DigitalTown #Brave #BasicAttentionToken #BAT #Blockchain

*Your IP address provides basic information on your location unless you use a VPN to mask it.

Peer-to-Peer Energy Trading

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Despite living very close to a major US city, power outages are a common occurrence in my neighborhood. This is partly because most US power lines are above ground, which when met with high winds, heavy rain and forests result in the inevitable outage by tree. It’s also related to how far power travels from its point of generation to the point of consumption. One downed tree can affect thousands of homes.

The investment in residential and commercial solar panels continues at pace, as does the shift from fossil fuel to electric vehicles, the latter funding research that is resulting in increased battery efficiency and lower battery costs. It’s only a matter of time before we have the option of switching to our cars as a power source for our entire home in the event of a power outage. This leads me to the conclusion that most neighborhoods now have some capacity to both generate and store electricity. Owners of solar panels make a significant upfront investment, but their only options to recoup that investment are to either use the electricity they generate, store it for future use, or sell it to the electricity company.

It’s also worth noting that around 5% of all electricity generated in the USA is lost during transmission*, and in less developed countries like India those losses are as high as 20%.

With power cables connecting every home in your neighborhood, a clearly defined standard for supply**, and now the capability to locally generate and store power, we have the potential for a new type of energy solution. We can create a solution that is more efficient from an environmental perspective as it’s green energy traveling less distance and therefore more of it is getting from the point of generation to the point of consumption. We also have a solution that is more reliable, a distributed system does not depend on one source of power.

All we are missing to create a local distributed power grid is a way to record electricity put into the system and to record and pay for what’s taken out – ideally without high administration overheads or the need for a central authority.  This is a perfect use case for Blockchain Smart Contracts.

A solution of this type will always have both a Hardware and a Software component. A registered Smart Meter will be required to measure and record the electricity put into the system and the electricity taken out. The software component could easily be implemented using an Ethereum Smart Contract – as power is generated and fed into the system the contract would mint Energy Tokens that represent watts of electricity and assign them to the wallet of the Smart Meter that generated the power. When connected to a form of payment such as Bitcoin or Ether, the combination of the Smart Meter and Smart Contract would ensure that Energy Tokens are purchased and transferred to the consumers account and burnt when used. This could happen in near real time with energy being paid for and consumed as its generated. Central battery arrays could store unused electricity, the Smart Contract paying an additional small fee to the owner of the battery array for the service they provide.  There is no authority, there is no human interaction, it is an automated process.

Following some research, I was not surprised to learn that there are a number of projects underway across the USA, Australia and Europe.

Brooklyn Microgrid – http://www.brooklyn.energy      http://lo3energy.com

Residents of the Park Slope area of Brooklyn are now able to sell power generated from rooftop solar panels via a microgrid enabled by Ethereum Smart Contracts. Working with Siemens they implemented a solution that is independent of the existing power supplier and that connects one small neighborhood. It provides consumers with the choice of buying electricity from a number of suppliers including their neighbors.

Energy Web Foundationhttp://energyweb.org

The Energy Web Foundation is a global non-profit organization based out of Switzerland who are focused on accelerating Blockchain technology across the energy sector. In November 2017 they released ‘Tobalaba’, an open source Proof of Authority Blockchain solution that uses Parity Technologies’ Aura consensus engine and Ethereum client.

Power Ledgerhttp://Powerledger.io

Power Ledger is an Australian Blockchain energy trading platform enabling consumers and businesses to sell their surplus solar power peer-to-peer. Australia has both the potential to generate incredible amounts of solar energy as well as a geographically clustered population that provides the perfect use case. They recently raised AUD $34M in token pre and main sale. Power Ledger are also part of the AUD $8M part-government funded project in the city of Freemantle to use Blockchain technology to integrate distributed energy and water systems.

I am confident that we are seeing the start of an important shift in how we generate, buy and sell energy. Blockchain will be the technology that underpins the distributed peer-to-peer solution. It’s unlikely that we will generate all the electricity we need to create a truly independent peer-to-peer system, but I do see a model where the energy companies of the future focus less on power generation and more on supporting the shared infrastructure that connects homes and businesses.

#DigitalTown #Technologyforgood #Blockchain #Electricity #SharingEconomy

* Referred to as Technical Loss – https://tinyurl.com/joqkqxz

** 120v/60hz in the USA

Owning your Data – Credit scores

One of the core topics emerging through a number of startups leveraging Blockchain technology is the concept of us owning and controlling access to our personal data, a shift away from data stored on central servers to a decentralized model.

I have often said that if you are not paying for the product then you are the product, and when you consider how accessible analytics and automated marketing tools have become I assure you targeted marketing has no plans to slow down.  Putting aside the monetization of your data, I believe that security will be the main driver for change. When you consider the data breaches in 2017 alone (143 million US-based users had their personal information compromised this year including Social Security Numbers) the argument for decentralized data is very strong.

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Shared Ownership of Smart Cities

Before I publish articles that talk about some of the most interesting innovations that I have come across in my research, its only fair to start with what DigitalTown is doing in the BlockChain space.

Who is DigitalTown?

DigitalTown is working with a network of communities around the world to introduce self-funding Platform Cooperatives where residents and visitors search, connect, share and shop locally and directly. Each implementation of a City website and App can be owned by local stakeholders, whether by the governing entity or by the residents themselves. The model is designed to scale from the smallest village to the largest metropolitan area, providing a framework for local governance with global interoperability. Each local resident can secure a permanent digital identity which can be verified by one or more verifying authorities. This digital identity then serves as a single-sign-on for accessing a growing network of Smart City and Smart Web services.

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