Over the last 6 months I have consulted on numerous ICOs and amerced myself in the Blockchain space. I’ve heard claims that Blockchain will be the biggest technology innovation in the last 20 years and together with AI will change the world forever. I tend to think Blockchain is over hyped and AI is definitely over hyped, which might seem strange coming from an AI and Blockchain consultant.
Most of the Blockchain and ICO ideas that have come across my desk over the past few months, and there have been hundreds, take traditional businesses and try to invent a Blockchain application. This trend has emerged as cryptocurrency exchanges are only accepting genuine Blockchain related digital currencies to their networks, the industry is somewhat self-regulating, and barriers are being created for new entrants. In most cases, the Blockchain application does not add much to the overall business idea and in seems to over complicate things.
What I have noticed is a trend that Blockchain ideas seem to work best in industries where transparency and information asymmetry between buyers and sellers is an issue. The public immutable nature of the Blockchain works perfectly in these instances. One excellent application I’ve seen is from CoinPoker. Online poker is an industry where game integrity has always been a problem. CoinPoker is managing everything from affiliate programs to gameplay on the BlockChain so participants can see exactly how the poker room is operating. Blockchain can help fix some of the issues that have stifled the growth of online poker. I was also an as an adviser on Bankera, which has perhaps been the largest ICO in history. Bankera have a lot of nice Blockchain applications, but the most innovative application is paying investors net transaction revenue on a weekly basis using the Blockchain to calculate and distribute this amount. Customers generally don’t trust banks, but the public nature of distributing revenue has been a hit. In general, financial service and insurance applications could be perfect for this technology. Think about a world where you could know the claims history of the insurance company you were just about to sign up for!
I’m not saying that Blockchain applications are limited to areas where transparency is an issue, as I have seen lots of other great applications, but what I would say is that each Blockchain business should as the question – Can this business could be done equally well without Blockchain. In most instances the answer to that question is “yes”!
Blockchain and data
One of the biggest areas where Blockchain technology can benefit is from better valuing data. Since Blockchain is usually a big data play, it’s surprising that not much work has been put into this area. Often ICO and other Blockchain businesses don’t generate revenue immediately, but they do generate a lot of data.
We have developed a propriety machine learning algorithm that values data. Whilst our model can work on most data sets, it’s particularly useful for Blockchain applications because such methodologies can assign value to an enterprise in the absence of significant revenue. Often during our consulting services, we can identify potential ways to monetize data sets as well. This new area of data collection is fascinating for data scientist. I see lots of possible applications in the health sector in the future.