The blockchain and its potential

for value innovation

Jan Brejcha, Ph.D.

Business designer, Co-founder at Adahoy.io

jan@brejcha.name

@jbrejcha

Contents

• Summary

• The Blockchain

• Infrastructure

• The Web Protocols

• The Decentralized Business Model

• dApps: Decentralized Applications

• Crowdfunding dApps

• Future?

• Conclusion

• Resources

Summary

• This presentation aims at providing a brief introduction to distributed

ledgers, and their underlying technologies, such as the blockchain,

multisignature, and smart contracts.

• Potential use-cases are presented, as well as current applications of

the technologies.

• Decentralized applications (dApps) promise to innovate the current

business models, and create new ones.

• The decentralized business model promised to disrupt whole

industries, but yet needs to find its full strength in standalone

businesses.

Baran, Paul. On Distributed Communications Networks.. Santa Monica, CA: RAND

Corporation, 1962. https://www.rand.org/pubs/papers/P2626.html

Infrastructure

Monégro, Joel. Fat protocols, USV, 2016-08-08, https://www.usv.com/blog/fat-protocols

The Web Protocols

• Historically the only way to make money from a protocol was to

create software that implemented it and then try to sell this

software (or more recently to host it). Since the creation of this

software (e.g. web server/browser) is a separate act many of the

researchers who have created some of the most successful

protocols in use today have had little direct financial gain.

• With tokens, however, the creators of a protocol can “monetize” it

directly and will in fact benefit more as others build businesses on

top of that protocol.

• dApps create value by facilitating access to protocols for a

particular use case and end users pay transaction fees for this

convenience.http://continuations.com/post/148098927445/crypto-tokens-and-the-coming-age-of-protocol

https://blog.coinbase.com/app-coins-and-the-dawn-of-the-decentralized-business-model-

8b8c951e734f

https://medium.com/0x-project/the-difference-between-app-coins-and-protocol-tokens-

7281a428348c

The Decentralized Business Model

https://venturebeat.com/2017/04/02/how-to-profit-from-the-blockchain-tech-stack/

The Blockchain Applications

• It’s also where we’re seeing a ton of innovative efforts and initiatives

such as OpenBazaar, Fermat’s Internet of

People, Steem, Synereo, uPort, Metamask, and Blockstack among

many, many others.

A decentralized application is an application that uses machine

consensus to remove trusted third parties. The marginal cost of

such an application is the cost of paying for machine consensus.

• Open Source. Ideally, it should be governed by autonomy and all

changes must be decided by the consensus, or a majority, of its

users. Its code base should be available for scrutiny.

• Decentralized. All records of the application’s operation must be

stored on a public and decentralized blockchain to avoid pitfalls of

centralization.

• Incentivized. Validators of the blockchain should be incentivized by

rewarding them accordingly with cryptographic tokens.

• Protocol. The application community must agree on a cryptographic

algorithm to show proof of value.

https://www.reddit.com/r/ethereum/comments/5hv1jk/the_psychology_behind_ico_funding_post

_3_of_4_of/

https://blockgeeks.com/guides/dapps-the-decentralized-future/

dApps: Decentralized Applications

• Year 2014

• Year 2017

https://medium.com/@FEhrsam/the-dapp-developer-stack-the-blockchain-industry-

barometer-8d55ec1c7d4

dApps: A Timeline

https://venturebeat.com/2017/04/02/how-to-profit-from-the-blockchain-tech-stack/

dApps: Examples

• Shifting from social applications (Web 2.0) to peer-to-peer apps

(Web 3.0, the internet of value)

• Multitude of innovative efforts and initiatives such as OpenBazaar,

Fermat’s Internet of People, Steem, Synereo, uPort, Metamask,

and Blockstack among others.

• Golem. The Golem project aims to create the first global market for

idle computer power.

• Augur. Augur aims to combine the concept of prediction markets

with the power of decentralized network to create a forecasting tool,

for potential trading gains.

• Melonport. The Melonport protocol is a blockchain protocol for digital

asset management.

• Status. Status transforms your mobile device into a light client node

on the Ethereum Network.

• Brave. A web browser keeping users in control of their attention and

privacy.

• Aragon. Aragon Network aims to act as a digital jurisdiction that is

extremely convenient for everyone to operate on.

https://blockgeeks.com/guides/dapps-the-decentralized-future/

dApps: Examples (cont.)

• Create a whitepaper. Your whitepaper should address a problem

you wish to solve. It should clearly state the intentions and goals of

the dApp. Describe the plans for your dApp’s token distribution, and

how you intend to go about doing it. Decide on a mechanism for

establishing consensus, and recruit your management and

development team. Be honest with any technical difficulties you

foresee and state your technical requirements clearly.

• Gain a following. Discuss your plan and form a community. Value

feedback and revise your plans accordingly.

• Start a crowd-sale. Once the dApp has gained enough momentum,

decide on a date to receive token funding. The dApp’s crowd sale

website should have all the information that an investor may need.

• Bring your ideas to fruition. Begin development and welcome new

developers and interest groups.

•https://blockgeeks.com/guides/dapps-the-decentralized-future/

How to kickstart a dApp

https://blog.gdax.com/how-to-raise-money-on-a-blockchain-with-a-token-510562c9cdfa

Crowdfunding dApps

http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

Where are we now?

• Business model innovation is more disruptive that

technological innovation: Incumbents can adapt to and adopt new

technological changes (web to mobile) way easier than they can

adapt to and adopt new business models (selling software to free

ad-supported software).

https://blog.gdax.com/how-to-raise-money-on-a-blockchain-with-a-token-510562c9cdfa

Disruption?

As Jamie Burke points out:

• Most blockchain startups are serving a niche of early crypto-

enthusiasts or other blockchain startups that require a new

decentralized stack to deliver their own promise.

• Most have settled to build enterprise consultancies for B2B clients

rather than disrupting markets. Their energies are focused on fixing

legacy systems and finding margin gains for incumbents for the

financial services companies many hoped would be disintermediated

forever.

• The few exits that have happened, such as ChangeTip to AirBnB, or

Mediachain to Spotify, have been acquihires selling out early

because they realized they had built a feature set, not a high-

growth standalone business.

http://www.wired.co.uk/article/confused-about-blockchain-you-should-be

Disruption? Not Yet

Resources: Books

• ANTONOPOULOS, Andreas M. Mastering Ethereum: Building Smart Contracts

and Dapps. O'Reilly Media, Inc., 2018. ISBN 978-1491971949. Will be

available commercially from Amazon.

• DANNEN, Chris. Introducing Ethereum and Solidity: Foundations of

Cryptocurrency and Blockchain Programming for Beginners. 2017. ISBN 978-

1484225349. Available commercially from Amazon.

• DIEDRICH, Henning. Ethereum: Blockchains, Digital Assets, Smart Contracts,

Decentralized Autonomous Organizations. 2016. ISBN 978-1523930470.

Available commercially from Amazon.

• REED, Jeff. Blockchain: Blockchain, Smart Contracts, Investing in Ethereum,

FinTech. 2016. ISBN 978-1539692775. Available commercially from Amazon.

Please, contact me for more

information:

Jan Brejcha, Ph.D.

Business designer, Co-founder at Adahoy.io

jan@brejcha.name

http://jan.brejcha.name

https://www.linkedin.com/in/janbrejcha

https://twitter.com/jbrejcha