Blockchain and its impact on future consumers

03 Sep 2018

  • Technology
  • Data

After working as a freelance record and mix engineer in Brisbane, Daniel Dewar moved to New York City where he worked as a sound designer in the film & television industry. While in New York, he transitioned to digital strategy and data roles before moving back to Australia in 2013. 

Daniel then moved on to head up the marketing team at one of Australia's leading data and analytics agencies and worked as part of the agency’s transformation from a consultancy to a technology company.

Daniel Dewar is Founder of Paperchain

In 2016, Daniel founded Paperchain, a decentralized marketplace that allows digital media companies to liquidate their daily transaction revenue through a global investor network.

We sat down with Daniel to hear all about his new Paperchain venture and the future of Blockchain technology. 

1. What is the underpinning philosophy behind Blockchain technology?

The application that is most prominently associated with blockchain technology, Bitcoin, was a reaction to the bailout of UK banks at the time of the global financial crisis.

It was a radical imagination of a financial network that would allow peers, or individual consumers, to trade currency between each other without a financial intermediary. Since then, it has become much more than that, as its technical capabilities have been expanded in through other cryptocurrencies to include more tangible applications, but the general philosophy is the same — how can we create value by creating self-sufficient markets and networks.

2. Why is Blockchain becoming more relevant to businesses and what is gaining it so much attention?

While Bitcoin is a specific application or usecase of blockchain technology, other cryptocurrencies that have since been created, specifically Ethereum, provide the abiltiy to create “smart contracts” that can represent customized tokens or real-world assets. Through tokenisation, these assets can now participate as tradable goods, and in doing so, create liquid markets that didn’t exist before or had high levels of friction.

Businesses always have an interest in efficiency of operations and service delivery, and the use of blockchain technologies for certain business applications can mean gaining efficiencies through the creation of micro-economies related to an asset, product, or service.

If I were a clothing store and dealing direct with off-shore merchandisers and manufacturers, I can participate in a supply chain economy on the blockchain that removes any of the intermediaries that may have added friction or cost to my relationship with those suppliers.

It’s important to point out that despite common perceptions, blockchains cannot verify any data, doesn’t allow instant transactions, aren’t immutable, aren’t encrypted and won’t replace your business servers. The applications it is very useful for are voting, public registries, supply chain management, trading and reconciliation, all through the lens of optimising or minimising the use of intermediaries.

3. What has been the most interesting application of Blockchain that you have been involved in and why?

Naturally, I’m very interested in Paperchain’s use case, as a means of creating new economic citizenry in digital media markets. While the application is compelling, what I find really compelling is the underlying protocol, what we call the Digital Asset Liquidity ProtocolIt’s a protocol and data layer that sits on top of the Ethereum network upon which marketplaces, exchanges, investors and makers can exchange Non-Fungible Assets. At a protocol level, we can make it extensible and design financial markets far beyond the initial use case, and that’s what fascinates me most about this technology.

Outside of that, the conversations and projects I’m involved in that I’m most excited about relate to sovereign identity, particularly with the New York City government where an identity network can add legal protections, security and wealth opportunities to the city’s most vulnerable populations.

4. Where is Australia sitting with Blockchain compared to the global market? And where do we need to be?

There are some very interesting projects originating from Australia, and the investment into these companies has been promising (although this is inline with a general increase in venture capital in Australia). There is definitely a lower appetite for blockchain-based companies from Australian VCs, who still look at equity and revenue as the key decision factors, which typically aren’t the main goals for blockchain companies who don’t offer equity compensation and the wider goals are paradigm shifts relating to wealth and opportunity redistribution, rather than revenue. And that’s just a result of the capital available in Australia, where it’s supply is severely limited compared to say San Francisco or New York City, so the appetite for risk is less.

There’s an over-reliance on government to shape technology narratives, and while they need to participate, this needs to be a VC/tech-co/industry driven movement. And this will continue to be a slow-journey while Australia’s population and the market opportunities remain much lower than our neighbours in South-East Asia and Asia. The liquidity of the markets in Thailand, Vietnam, Singapore, Hong Kong, China, India and Indonesia at the moment is creating a lot of opportunities for entrepreneurs.

5. Is Blockchain technology giving consumers more control and influence and what impact could this have on businesses?

Very much so. Look at what Brave browser is doing with their Basic Attention Token (BAT). The core Brave browser stops tracking cookies and ad-based JavaScript from loading on pages. For consumers it’s an ad-free browsing experience. Now you can load up a browser wallet with BAT, and Brave will automatically send BAT to the publishers and website based on your consumption habits. Coil is exploring something similar. It’s a continuous consumption that positions the customers at the centre of online experience.
There are still many barriers to mass adoption.

It’s still not easy for an everyday consumer to participate in cryptocurrency or token economies and that’s only part of the adoption challenges. The other is existing businesses who stand to lose sovereignty. While most banks are involved in blockchain-related projects in some capacity, if the end results means they lose sovereignty of their customers, that will be the end of the journey for them. The smarter businesses are looking at opportunities where this technology can create efficiencies that can free up resources and capital to create supporting product and services to better serve their customer base. The backwards companies are those who see it only as an existential threat and are looking to stop its adoption.

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