The following post comes from a new eBook, Blockchains in the Mainstream, which features 33 of the top thinkers, entrepreneurs, and investors in the world of decentralized systems.
You can read all of the entries from the “Blockchain Dream Team” in the FREE PDF here.
“I call it the law of the instrument, and it may be formulated as follows: Give a small boy a hammer, and he will and that everything he encounters needs pounding.” – Abraham Kaplan
Technology pundits often remark that Bitcoin/ blockchain are technologies looking for a problem to solve. I must admit there is some merit in their pessimism. Often times the value proposition of “blockchaining”, an existing vertical, does not match up well against the measuring stick of entrenched incumbents. Moreover, we see blockchain companies offering little in terms of new business models. Sadly, most blockchain companies use the blockchain as a new cog in old machines instead of designing disruptive tech which is extendable across industries.
For instance, the music industry ostensibly has a great use case for blockchain in the equitable distribution of content and royalties. A service which connects an artist’s compensation directly to the consumption of their content would greatly reduce the friction felt in today’s media distribution networks. The consumer would have access to a wider range of music and the artist would receive a greater share of the royalties/ revenues. I think that everyone, except a small number of music industry participants, would love to support such a blockchain based service.
So why aren’t we rocking out on the blockchain? Simply put, a blockchain-based music industry solution treats the symptom but not the disease. Music in 2016 is a marketing expense, not a valued commodity, the industry is controlled by an oligopoly, and these players are disinclined to modernize their business model. Hardly fertile ground for blockchain innovation. To compete with a global giant like Spotify, an emerging service would need more content, the blessing of rights holders, and possess a consumption model with greater appeal to consumers who have already been conditioned to enjoy the commodity for free. The blockchain is not a panacea for all that ails the world, especially in the case of the music industry. Some problems don’t require a hammer.
A more compelling use case, in my view, are companies seeking to compete heads up with the entrenched incumbents, by using blockchain to offer features and enable business models that are impossible using the incumbents’ technology.
For instance, here at Storj Labs, we thought about the type of object store that we would like to use as developers. It had similarities with Amazon’s S3 service, but also leveraged the bene ts of a P2P network. We knew that initially developers would focus on: performance, security, availability, and price point.
For that reason, we set out to create a network protocol that delivers on all of them better than any incumbent. Have we checked all of these boxes? Frankly, no, we are 3 out of 4 and will launch our commercial service once we get performance up to commercial standards. That being said, we went into this business understanding that matching or exceeding the status quo is just table stakes.
The truly interesting part of our vision is after we establish Storj as a viable alternative to Amazon S3. We envision a world where developers use Storj as a data layer in applications which give control of data back to users. We see a world where an end-user shares his/her data in exchange for mutual benefit, not through coercion or lack of choice. The ultimate ownership and control of personal data will remain the individual’s. Now think even bigger, what would happen if you connected these applications and shared data between them based solely upon the individual’s explicit wishes? Specifically, imagine the power of a decentralized Facebook, Airbnb, or Uber, where the billions of dollars generated from user data goes back to those individuals, instead of the shareholders of these centralized services. That’s what I consider a paradigm shift, and incumbent storage providers are ill equipped to help realize this reality.
As if completely disrupting the business model of the incumbent object storage providers wasn’t a lofty enough goal, we are also actively working on putting ourselves out of jobs. Our ultimate goal is to create a trustless object storage network that is governed by algorithms, smart contracts and cryptocurrency that exchanges crypto-tokens (SJCX) for storage resources across internet connected devices. While some claim that we are building Skynet, we believe that we are enabling the true potential of IoT. Take a look at Storj’s (Secret) Master Plan to learn more.
In the end, even if you’re not on board with Skynet, it’s undeniable that blockchain adoption depends on the strength of its applications today and the ability of these applications to form new use cases not possible with the incumbent’s technology. Let us build blockchain platforms that compete head’s up in today’s arena and define the construct of future arenas.
To paraphase hockey great, Wayne Gretzky, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”