I'm still a cryptocurrency bear. I have about $100 worth of Ethereum to give myself the incentive to follow this space because it is endlessly fascinating.
One of the things I'm obsessed about is what will happen to Ethereum as it transitions to a new proof of stake algorithm known as Casper. I suspect all the investment into GPU mining gigs will become worthless and folks will start to try to own a more meaningful slice of ETH to make passive income. My own uneducated prediction is that ETH will lose its value after transitioning to Casper because mining it will no longer require massive amounts of energy and GPU power. This may happen after a short upswing when ETH enthusiasts buy up enough coin to continue mining efforts post-Casper age.
That being said, the Journal of Alternative Investments now regularly publishes articles on cryptocurrency and the latest article is on blockchain use cases. The latest one being entitled Blockchain : Data Malls, Coin Economies and Keyless Payments by Kakushadze and Russo.
No matter how bearish you can be on trading cryptocurrencies, blockchain technology is a game breaking technological change that is inevitable. The question for me is always to ask a person pitching a cryptocurrency strategy whether it ties in with broader applications that a blockchain can bring to business in general. Consequently, investing in private equity using real money on these use cases may be a smart idea :
a) Data Mall
A data mall is a decentralised series of nodes that sell data in a marketplace. As data can come from multiple sources and in different formats, some sort of standards may need to be set to show folks how to extract and use this data. For example, data description can be standardised.
This is quite personal to me, having for data.gov.sg for a small part of my career. I imagine a private sector data.org.sg to be decentralised and owned by no one, but private sector organizations can host their own data and sell them for a fee. There is no need to convince an agency to put up data as a public good an incentivization will be done through coin economies...
b) Coin Economies
Coin economies is a system of exchange involving cryptocurrencies. It can also incentivise folks like bloggers who provide information to others.
Augur is a decentralised prediction market with an Ethereum token called Reputation. Reporters will be given coins for predicting news accurately and have coins taken from them to if they get the future wrong. This can potentially create a newspapers that reports tomorrow's news today.
Interestingly, the paper talks about dual coin systems. One coin is used to keep the economy running internally. This coin can also be converted to an exchangeable coin like BTC or ETH to maintain it's value.
c) Data Provenance
Blockchains give us the ability to verify that a piece of information is correct or comes from the right source.I suspect that when I did a Solidity tutorial to create a notary system, I was working on data provenance. We can float the hash of a block of data and subsequently someone else can check if the data was tampered with by referring to a public blockchain. Perhaps too many startups are working to find problems that data provenance can resolve.
Problem is that it is not feasible to push entire blocks of data into the blockchain. So instead, a workable system would be to track changes to the data instead.
d) Keyless payment
Blockchains can also enable technology that allows a person to be addressed by telephone number or email address. Paylah users should be familiar with this feature although I doubt Paylah runs on block-chain technology.
The issue is mainly security as the system that maps a wallet ID with email or phone number is susceptible to hacker attacks.
e) Proxy voting
This is my favourite application because it might not have been done before in any country yet. A voting system allows the stake of a shareholder to be defined precisely and votes can be cast in a tamper proof manner remotely.
There are so many ways this can be applied. Democracies can conduct referendums this way. Singapore can conduct mini-referendums to let folks in a area like Woodlands determine what kind of improvements should be prioritised in after the next elections.
In the corporate area, this can allow voting of resolutions to take place from home. This can have major impact to lawyer's fees as scheme of arrangement meetings go online.This may also reduce instances of minority oppression in the corporate landscape.
Knowing the use cases of blockchains will not change my stance on cryptocurrencies, which is largely still bearish right now.
But at least when you are confronted with an ICO White paper, knowing the kind of use cases that everyone is also looking at along with major issues concerning these use cases may help refine your bullshit detector when you meet a crypto-snake-oil salesman.
But that's still a lot of bullshit to deal with.
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