In the last episode of Build, we debunked a number of myths related to Bitcoin, blockchain, and other cryptocurrencies.
Despite all the myths and hype, these technologies have staying power in the market. But we get that you might be skeptical. So we’re dedicating today’s episode to showcasing how they are being incorporated into valuable applications that are making an impact in the market.
And if you’re still concerned about the volatility behind cryptocurrencies or how to get involved without losing your shirt, we’ll dive deeper into each of those topics.
Our guest Audrey Chaing is back. You’ll recall Audrey is a crypto trader as well as a Blockchain analyst and consultant, and blogs on Blockchaing.
Here’s what you’ll learn from today’s episode:
Poornima Vijayashanker: In the previous episode, we debunked a number of myths related to Bitcoin, blockchain, and cryptocurrencies. If you missed that episode, I’ve included a link to it below. In today’s episode, we’re going to dive a little bit deeper and talk about some of the cool applications that have come out of Bitcoin, blockchain, and cryptocurrencies and let you know which ones are here to stay and how you can get involved. Stay tuned. Welcome to Build, brought to you by Pivotal Tracker. I’m your host, Poornima Vijayashanker. In each episode, innovators and I debunk a number of myths and misconceptions related to building products, companies, and your career in tech. In today’s episode, Audrey Chaing is back. You’ll recall that Audrey is a crypto trader, as well as an analyst and consultant. Thanks for coming back, Audrey.
Audrey Chaing: Thank you.
Poornima Vijayashanker: Yeah. Today, we’re going to talk about some pretty cool applications of Bitcoin, blockchain, and cryptocurrencies, and why they’re here to stay, and how our audience can get involved. Let’s kind of dive right in. Let’s talk about, what are some of the applications of each of these?
Audrey Chaing: Sure. To be honest, everyone’s still trying to figure out the killer use case, but there’s a lot of really exciting work happening. They tend to fall into kind of three buckets. One is financial services, which we are kind of more familiar with, with the cryptocurrencies and things like that, cross-order payments, remittances. Another area is identity, and another area is supply chain, and so—
Poornima Vijayashanker: Let’s start with the financial services. I know there’s a lot of ICOs, initial coin offerings. What are those?
Audrey Chaing: Yes, initial coin offering, that’s basically how a new cryptocurrency comes into existence. I mean, it’s almost a new way to fund a startup that is related to blockchain. They could be doing any number of things. An example could be, “We’re doing distributed storage, so then in order to buy and pay for services, you have to use our token coin.” Yeah.
Poornima Vijayashanker: Got it. What’s causing a lot of the volatility now in the market then, as it relates back to these ICOs?
Audrey Chaing: A lot of it is, frankly, just speculation, because people have heard of how much money that some others have made in cryptocurrencies, and people are interested because they want to make a quick buck. Right?
Poornima Vijayashanker: Yeah.
Audrey Chaing: Also, for the people who are less familiar, there tend to be different stages of a sale in an ICO. You would get kind of in-the-know institutional investors that would come in on the early rounds and get a very large discount. Then they might have several rounds of sales, and then by the time you reach the crowd sale, they might also have a tiered, “If you get in now, you get a larger discount. Wait till next week, you still get a discount, but it’s smaller,” and so—
Poornima Vijayashanker: So it is very much like fundraising—
Audrey Chaing: It is, yeah.
Poornima Vijayashanker: …from like venture capitalists or angel investors.
Audrey Chaing: Now, the difference is that you get liquidity a lot faster. If your token ends up getting listed on exchanges, that means you can start trading right away. Sometimes there are kind of lockups for the large institutional investors, but that is one big difference.
Poornima Vijayashanker: Yeah. Actually, let’s dive into that. There are a lot of other applications in the financial services, like what you just mentioned, exchanges and marketplaces. What exactly are these? Walk us through.
Audrey Chaing: Yeah, sure. Actually, just to clarify, too, ICOs, the tokens could be in any number of industries. It doesn’t have to actually relate to financial services. Some of the more straight financial services use cases might be…There’s something called Coins.ph. It’s in the Philippines. A lot of Philippine workers work internationally, remit money back to their homeland. This actually is interesting, because it brings on a lot of the unbanked population, so there’s…In order to participate in our current banking system, you need to have a minimum amount of deposits in order for it to even be worthwhile for the bank to have you, and a lot of people don’t have that. Now, with crypto, integrated with our current banking system, you can use the Coins.ph app to send money to friends, and they could go to an ATM and pick up cash, or just the corner store, pick up cash. You can pay for your tuition that way, your cell phone bill, all sorts of things.
Poornima Vijayashanker: Very cool.
Audrey Chaing: There’s also, there are traditional ways of sending money around, which is Western Union, wire transfer, which tend to be slow and relatively costly, but now with crypto, it can happen a lot faster and a lot cheaper.
Poornima Vijayashanker: Got it.
Audrey Chaing: Those are kind of the financial use cases, but you asked about exchanges. There are many. A lot of the reason that there are so many is because there are so many coins, and not every exchange will have all of the coins you want to trade. Most people in the U.S. would be familiar with Coinbase. I think they have a pretty good brand name, and pretty on top of their regulation, their…It’s easy to use. However, they only trade four different coins, so if you want a coin that is not one of the four that Coinbase has, what you have to do is put your fiat, or your U.S. dollars, into Coinbase by some either Bitcoin or Ethereum. Identify what other coin you want. Let’s say you want Monero. Right? Then you have to find which of the exchanges has Monero, send your Bitcoin over to that one, and then buy your Monero that way.
Poornima Vijayashanker: In the previous episode, you started to hint at some business applications for blockchain. Not the cryptocurrencies, but just the underlying technology. Why are people using this for business?
Audrey Chaing: I guess going back to the kind of large categories, we already talked about financial services a bit, but let’s talk about supply chain for a second. Right? There are some very interesting proof of concepts going on. I can talk about a couple. One is with prescription medication. You can basically track that it is legitimate, right, it’s not like a fake or copy, and then you can make sure that, say, it needs to be refrigerated, that it was taken care of the whole way through.
Poornima Vijayashanker: How do you, how can you tell that?
Audrey Chaing: Kind of like, well, you could kind of use sensors to say that, “OK, the temperature never reached above X amount that would make the medication bad.” You could, kind of like how you already scan along the way, say, a FedEx package, you could track all these different stages and have them write to the blockchain.
Poornima Vijayashanker: OK, got it.
Audrey Chaing: Then since it’s on the blockchain, you can’t go back and edit the database. Right?
Poornima Vijayashanker: Right, so basically, it’s stuck there, and then people can see the audit trail because it’s on—
Audrey Chaing: Yeah.
Poornima Vijayashanker: …blockchain.
Audrey Chaing: Exactly. Another interesting use in supply chain is provenance for food. For example, if you are eating bacon and you are interested in, “Where did this pig come from?” All the way from which farm, what it was fed, how it was…The whole process of how it reaches you, you can now track that.
Poornima Vijayashanker: Very cool. How does somebody then get onto the blockchain to have the entire supply chain and each of these transactions listed?
Audrey Chaing: Yeah, so blockchain, in the traditional sense, is a public blockchain, so you, or I, or anyone could go onto Blockchain.info, for instance, and look up any Bitcoin wallet or Bitcoin transaction. There is this idea of permission ledgers, which, especially, some enterprise are looking into because they don’t want everyone to have access to everything, but in the traditional sense anyone can look it up.
Poornima Vijayashanker: Yeah, but then it’s only as good as the reporting, right?
Audrey Chaing: Yes. There is this kind of…When you try to mesh the real world with the digital world, how do I know, “So-and-so is attesting that this is true. Well, is that legitimate?” Then, so that is something we definitely need to think about when we try to kind of mix the digital and the real world.
Poornima Vijayashanker: Got it, yeah, so going back to your bacon example, if somebody forgets, maybe in the packaging stage or one stage before that, to list a transaction, what happened, then the public isn’t going to know what that is, so there is going to be still a hole in it.
Audrey Chaing: Yeah, so these are the things that are being kind of worked out right now, with all of the kind of proof-of-concept work and research.
Poornima Vijayashanker: Very cool. What’s another application that you think is here to stay for blockchain?
Audrey Chaing: Identity is another area where there’s a lot of work, a lot of interest, kind of how it could look like in the end. Right? You could have full control over your data. For instance, if you had your medical data here, your social media data here, your shopping data here, you could say, “I want to grant you this particular piece of information,” and you can even decide to be compensated for it or not. That’s kind of the self-sovereign identity piece. There’s already some work happening in this area in governments, even. The government of Finland, they have this blockchain-enabled card for refugees. This card will be an identity card, but also, they load it with money, so that’s one interesting use case. Estonia now has e-citizenship, so there’s a lot of interesting stuff going on.
Poornima Vijayashanker: I know one concern that our audience may have is, which of these things are fads? Which of these things are here to stay? It sounds like some of the things that are more groundbreaking, like identity and supply chain, are here to stay, but can we really know?
Audrey Chaing: Yeah. Actually, we can’t. That’s a good warning for anyone trading crypto or getting to blockchain is that there’s a lot of potential. It’s very exciting. However, there are some real technological hurdles, including scalability. That’s the largest one. There are a lot of smart people working on it, including like off-chain solutions, but we won’t know for sure. Yeah, I would say if you’re going to invest, I think it’s smart to have something, but don’t put in more than you would be OK losing, because that is a possibility. You could completely lose it all.
Poornima Vijayashanker: Yeah, and in terms of investing and learning about applications of blockchain, or getting involved in building something on the blockchain, what would you recommend?
Audrey Chaing: Well, I guess there are a lot of choices, but not a whole lot of great resources, to be honest, so you have to decide kind of like what kind of do you want to build on an existing chain? Do you want to build your own? I mean, building your own is quite a undertaking, but people have done it. I think the best way would be just start. There’s no, it’s very, not a whole lot of documentation, not a whole lot of tutorials. There are meetups all over, so I’m actually a part of Oakland Blockchain Developers and SF Ethereum Developers. They have people come in and do technical talks and sometimes code labs. That really helps, but it’s very, it’s not fun to work with yet.
Poornima Vijayashanker: Yeah.
Audrey Chaing: Right?
Poornima Vijayashanker: OK.
Audrey Chaing: It’s very early, and-
Poornima Vijayashanker: So not for the faint of heart, but maybe for those—
Audrey Chaing: Yeah.
Poornima Vijayashanker: …who want to get in, eager—
Audrey Chaing: And it changes very quickly. I mean, even if you’re looking at Solidity, which is what a lot of people use for Ethereum, the syntax changes frequently.
Poornima Vijayashanker: Yeah. Well, that also might also be a good thing, so for people who are eager to always be at the cutting edge—
Audrey Chaing: Yes. It’s definitely—
Poornima Vijayashanker: …and want to be involved.
Audrey Chaing: …cutting edge. You know what’s shocking is, sometimes I talk to people, and I’m like, “Yeah, I’ve written a smart contract in Ethereum,” and people are like, “Oh, my God,” so just like this is crazy that this is like a thing, but it’s so early that not very many people have done that.
Poornima Vijayashanker: Yeah. Wonderful. Well, thank you so much, Audrey, for sharing all your expertise when it comes to Bitcoin, blockchain, as well as cryptocurrencies.
Audrey Chaing: Thank you for having me.
Poornima Vijayashanker: Yeah. That’s it for today’s episode of Build. Be sure to subscribe to our YouTube channel to receive the next episode. Ciao for now. This episode of Build is brought to you by our main sponsor, Pivotal Tracker.