With 350 ‘Tikkies’ (easy app to send payment requests via Whatsapp) and 1100 ‘Ideal’ (Dutch standard for internet payments) payment, being processed in The Netherlands, we’re belonging to one of the most cashless societies worldwide. When we look to countries like Congo (Africa), where government workers are still paid with stacks of cash from a truck and several South-American countries, where most people don’t have a bank account but have pigs in their backyard that act as savings account, the situation is totally different.

Globally, over 2 billion people don’t have a bank account, according to the World Bank. In some South East Asian countries, this amount is 25% of the inhabitants, whereas in some African countries it is only 10%. While cash is still king in some countries, in some countries alternative payment solutions like M-Pesa, where money transactions are being sent between mobile phones, are very popular. In Kenya, 50% of the GDP is being sent via M-Pesa and 95% of the inhabitants have access to it.

The denationalization of money

In 1976, Friedrich Hayek wrote in his book ‘the denationalization of money’ about setting up competing currencies, that would start a battle about the monopolies of central banks. It looks like, Facebook CEO Mark Zuckerburg has read this book during the many sleepless nights he definitely has had in the past months, which have been devastating for his company. The scandals keep on being revealed and several governments are grilling the company legally. In The Netherlands, 600.000 users closed their account and the users that remained, are using the platform less intensive, impacting the financial results. Not even thinking about all the advertisers that walked away.

New Revenue Streams

New projects should give the company not only a more positive image but could also provide new revenue streams. The company knows all the details of our personal life and could, with all the data they have, run some very interesting and effective services. After the announcement that the company will focus on the dating market (a $10 billion market), project ‘Libra’, with which the company would like to create an own digital currency, has gained momentum at rapid speed. The ‘GlobalCoin’ will be a so-called ‘stablecoin’ (which I explained in a previous blog), linked to several currencies like the Dollar and Euro. It is the second try of the company making its own digital currency after it silently killed project ‘Facebook Credits’. Zuckerberg described the purpose of this coin as:

“it should be as easy to send money to someone as it is to send a photo”.

The project has been officially registered in Switzerland, the company currently has conversations with the American and British government about the necessary regulation and would like to launch the coin already this month (earlier reports told 2020) in 18 countries. The business case is of course very interesting, as one-third of the world populations logs into Facebook at least once a month and in countries like India, 80% of the SME’s are using Whatsapp to promote goods. Because of the European PSD-2 regulations, it is furthermore very easy to obtain financial details from consumers and for the 8.5 million websites and shops, using the Facebook Login, it should be very easy to accept payments with one click.

GlobalCoin

Users could furthermore be paid in the ‘GlobalCoin’, for watching ads on the platform, just like the Brave browser is facilitating already for all websites. Although the company is denying, it is almost completely inspired by already working solutions of the Asian companies AliPay and WechatPay, which are currently bigger and mightier then Chinese banks and credit cards.

When we zoom into developing countries, you see where the ‘GlobalCoin’ will have a siginificant effect. Several academic research reports have shown that financial inclusiveness (having an own digital savings account etc), can significantly contribute to both the country’s economic growth and accomplish the UN Social Development Goals. McKinsey found that this can even add $3.7 billion to the GDP of developing countries in the upcoming 10 years. Furthermore, over half a trillion Dollars of so-called ‘remittance payments’ (payments between for example workers abroad and their families at home) was sent in the past year, where transaction costs of these -often Western banks- are ranging from 8–12 and sometimes even 30%. Imagine how significantly lowering these costs (Facebook is thinking about a fee of 1%) would impact the receivers of these payments in developing countries.

Implementing Globalcoin

Directly implementing this ‘GlobalCoin’ globally, would most people say, based on the things mentioned above. But we almost forget the reason why all the latest scandals surrounding the company started. It is known as the largest ‘data slurper’ and because of the unconventional and irresponsible way of how it is sometimes using this data. Photos of the nice team outing are not that exciting, but research done by the Dutch Central Bank shows that Dutch citizens see their financial data as very privacy sensitive. Would you like to give all this data to a company, being known because is it using all possible ways to commercialize your data and often blames others for acting safely?

Globalcoin Useage

Cryptocurrency fanatics are very positive about the project, as they think it will kickstart the mass adoption of cryptocurrencies. If only 2% of the 1,5 billion daily Facebook users will use the ‘GlobalCoin’, it would double the current global amount of cryptocurrency users. The project will face lots of hurdles; from regulations and demographic problems (the user base is getting old very fast). For me, it is another new, devastating step, in losing our privacy. The business model of Facebook has, notwithstanding all scandals, still huge conflicts of interest with its own interests and those of its users. Conflicts I see growing, with their new services, like the ‘GlobalCoin’.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Like several other industries, the publishing industry (accounting for $26 billion of revenue in 2018), is busy reinventing itself, due to the huge impact of the digital revolution. The old-fashioned creation, distribution and revenue models do no longer work and blockchain technology can help the sector to take the next “quantum leaps” in various ways.

Several large companies active in the sector, such as the New York Times, are already busy with the implementation of the technology and new startups working on new solutions emerge on a weekly basis. Recently, I was invited to speak at the Telegraaf Media Group (one of the largest Dutch media companies) about the impact of blockchain on the sector, where I mentioned these four points of interest:

A Fair Compensation For The Producer Of Content

Some bookwriters earn millions of euros from their work, like Harry Potters’ JK Rowling ($ 55 million). However, they are in the minority; a sold book yields the writer between 50 cents and 2 euros and on average, only 3000 copies of a book are usually sold. The same holds for music makers. Spotify pays an artist between $ 0.006 to $ 0.0084 per stream. If you want to earn a modal income as an artist, you need at least 6 million streams of your song on an annual basis. Although platforms like Amazon KDP (self-publishing books) and Spotify have given the sector a boost in terms of revenu and reach, the majority of revenue is earned by all the intermediaries at the supply chain and only a small portion ends up at the original maker of the content.

There are various blockchain startups, that want to tackle this. Give content creators a more fair share for their work and make it easier to put the user of content in more direct contact with the creator of it. Good examples are Publica, which enables book writers to crowdfund a book. In exchange for the investment, the consumer receives tokens, with which he can retreive a copy of the book. The Chinese startup Weifund does this for all types of media and has already successfully facilitated the crowdfunding campaign for the movie ‘Braids’. The counterpart of the popular blog medium Medium, Steem, does this for blog writers.

Content Creators

Academics are one of the few creators of content, who are actually not producing this content for a financial reward. Looking at the huge time investment, this is of course strange. It is the current system, causing this. If you are not in a well-known research database such as JSTOR or Wiley, you’re not ‘on the map’ and can basically forget a nice career as a researcher. But these platforms are not paying anything (while they earn hundreds of millions of Dollars) to the creator. Former CERN and NASA-employees have set up the Orvium startup for this, with which on the one hand the peer-review process is clearly facilitated on the blockchain and on the other hand, academics are paid for their work. The Pluto startup focuses solely on reimbursement.

Is blockchain going to remove all intermediaries? No, there will certainly be parties like marketing agencies still be involved, but makers of the content will finally receive a fairer compensation fort heir work

Who Is The Creator Of The Content Anyway?

There is such an incredible amount of free content available on the web and every minute, there is so much content added, that it is virtually impossible to see which content should actually be paid for to whom. The much-discussed new European “Article 13” law is a first step in the direction of better licensing (and therefore payment) of content and prevents abuse of it. Technologically there are still a lot of hurdles to take, but blockchain can make this work a lot more transparent, fairer, more sustainable and more efficient.

As an example of this process, the organization Editions at Play has placed the book “A Universe Explodes” on the blockchain to show how this works. In addition, there are various startups that already offer working solutions to facilitate this. Mediachain offers a solution that securely stores and makes the metadata of music availible for everyone and was recently purchased by Spotify. The music streaming service was being sued because of unpaid royalties, which is, according to research because 25% of streaming music is not licensed. The Grammy-winning artist Imogen Heap has launched a similar solution on the market; Mycelia.

Through Civil, journalists can be paid directly by readers of their content and are no longer dependent on large media channels. There are also several solutions available for amateur writers, like the popular PO.ET, which offers authors a decentralized database to store content, but also shows who is uctually using your content (even if it is just a sentence). The startup offers a WordPress plug-in, making it very easy to direcly publishing the blog and put it ‘on the blockchain’. Moreover, The Dutch company Fintage House is offering the same solution for movies and series, Artlery does this for art.

The End Of “Fake News”?

Every day I’m faced with fake news. On all online and offline channels and in the most ingenious ways, that make it look very real. In their research, MIT discovered that “fake news” is shared 70% faster on Twitter than real articles.

Blockchain can be used here in an interesting way, especially by using “wisdom of the crowd”, to prevent this from happening. There are therefore several startups that reward tokens, in exchange for creating real content, which is validated by users. For example, the startup Trive and Dirt have built a system that rewards fact checkers fort his. Publiq works with the authenticity score of readers, just like Civil. Not only startups are busy with solutions to this ever-growing problem, but the European Commission has also now made it one of its spearheads.

Ad Fraud Prevention

Digital advertising fraud (also known as click fraud) costs companies worldwide almost $7 billion a year. This number is furthermore increasing by 50% per year. Over $1 of every $3 spent on ads is fraudulent and the World Federation of Advertisers (WFA) expects the total cost of advertisement fraud to increase to $50 billion in 2025. In the most ingenious ways, bots (now accounting for 48% of all global website visits) are used to artificially increase the number of clicks and views. Even online configurators of cars, such as BMW (for which euros are paid per configuration), are being manipulated.

It is a huge problem for advertisers and publishers and several solutions are build or building, with the help of blockchain. Several startups are busy with building platforms, that verify the authenticity of the ad impressions but also map relationships between advertisers, publishers, and consumers. IBM is currently working with Salon on their AdLedger project; a pilot to offer a shared “ledger” for making clicks transparent and transparent for both advertisers and publishers. AminoPay also offers such a solution, which furthermore helps with the optimal use of advertisements. AdEx goes one step further and offers “ad auctions” on the blockchain.

Making Content Easier Together

The use of blockchain technology can not only be interesting from a commercial point of view, but also in the area of ​​collaboration when creating content, major efficiency gains can be achieved. To make a great piece of content, often different experts are needed to create, edit, design, and market it. Currently, due to the costs, these type processes are only possible to setup and execute, for large companies.

One of the properties of blockchain is that the stored data cannot be modified, which prevents fraud and makes the history of a document with respect to ​​changes (made by whom, for example) completely transparent.

As I wrote in an earlier blog; blockchain technology is still relatively new and in many areas, still in its experimental phase. Although many startups have already successfully launched working products, their impact is still small. The possibilities are endless and I truly believe that the publishing industry can take great advantage of this new technology in the upcoming 5 years.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

De uitgeefsector, goed voor 26 miljard dollar omzet in 2018, is druk bezig met zichzelf opnieuw uitvinden. Net zoals verschillende andere industrieën. Dit komt door de waanzinnige impact van de digitale- en internetrevolutie. De ouderwetse creatie-, distributie- en verdienmodellen werken niet meer. Blockchaintechnologie kan de uitgeefsector op verschillende manieren helpen bij het nemen van de volgende quantum leaps.

Verschillende grote bedrijven, zoals The New York Times, zijn al druk bezig met de implementatie van blockchain. Ook schieten de startups uit de grond. Recent sprak ik voor IAB Nederland, de Nederlandse branchevereniging voor digitale marketing, bij de Telegraaf Media Groep over de impact van blockchain. Daar haalde ik de volgende zaken aan.

Een eerlijke vergoeding voor de maker

Sommige schrijvers van boeken verdienen miljoenen euro’s met hun werk. Denk bijvoorbeeld aan de schrijfster van Harry Potter (55 miljoen dollar). Maar dit soort auteurs zijn in de minderheid. Een verkocht boek levert ze vaak tussen de vijftig cent en twee euro op. En gemiddeld verkopen ze 3000 exemplaren van één boek.

Bekende DJ’s als Armin van Buuren daargelaten, waar je vroeger als artiest binnenliep met de verkoop van albums, betaalt Spotify-artiesten tussen de 0.006 en 0.0084 dollar per stream. Voor een modaal inkomen moeten mensen jouw nummer zes miljoen keer beluisteren op jaarbasis.

Hoewel platformen als Amazon KDP en Spotify de sector een boost gaven qua opbrengst, blijft het grootste gedeelte van de opbrengst achter bij de vele tussenpersonen in de keten. Zo komt er maar een klein deel terecht bij de oorspronkelijke maker.

Blockchain-startups

Er zijn verschillende blockchain-startups die dit willen aanpakken. Zij willen contentmakers enerzijds een eerlijkere beloning geven voor hun werk. Anderzijds willen ze het makkelijker maken om contentgebruikers in contact te brengen met de makers.

Een mooi voorbeeld hiervan is Publica. Dit bedrijf stelt schrijvers in staat om boeken te crowdfunden. Consumenten krijgen tokens in ruil voor de investering. Daarmee kunnen ze een kopie van het boek krijgen. Het Chinese WeiFund doet dit voor alle soorten media en faciliteerde de campagne voor de film BRAID al succesvol. Steemit, de tegenhanger van het populaire blogmedium Medium, doet dit voor blogschrijvers.

De academische wereld

Academici zijn eigenlijk één van de weinige contentmakers die dit niet voor een financiële beloning doen. Dat is best raar, want in hun werk zit ontzettend veel tijd en moeite. Het systeem zit dan ook vreemd in elkaar. Als je niet in een bekende database als JSTOR of Wiley staat, hoor je er niet bij en kunt je een mooie academische carrière vergeten. En dat terwijl deze platformen geen enkele euro van de honderden miljoenen die ze verdienen, uitkeren aan de makers.

Oud CERN- en NASA-medewerkers zetten hiervoor de startup Orvium op. Dit zet enerzijds het peerreview-proces overzichtelijk op de blockchain, en anderzijds betaalt het academici voor hun werk. Startup Pluto focust zich enkel op de vergoeding.

Gaat blockchain alle tussenschakels verwijderen? Nee. Er zitten altijd nog partijen zoals marketing tussen, maar makers krijgen een eerlijkere vergoeding.

Wie is de maker eigenlijk?

Er is waanzinnig veel gratis content beschikbaar. En elke minuut komt er weer ontzettend veel content bij. Daardoor is het vrijwel onmogelijk om te zien aan wie voor welke content betaald moet worden. De veel bediscussieerde nieuwe Europese Artikel 13-wet is een eerste stap in de goede richting van een betere licensering van content en het voorkomen van misbruik ervan. Dit is dus ook een stap richting een betere betaling van content. Technologisch gezien zitten er nog veel haken en ogen aan.

Transparanter en efficiënter

Blockchain kan dit geheel een stuk transparanter, eerlijker, duurzamer en efficiënter maken. De organisatie Editions at Play zette als voorbeeld voor dit proces het boek A Universe Explodes op de blockchain. Ze willen daarmee laten zien hoe het werkt. Daarnaast zijn er verschillende startups die al werkende oplossingen aanbieden. Mediachain heeft bijvoorbeeld een oplossing die de metadata van muziek veilig opslaat en aanbiedt.

Recentelijk kocht Spotify dit. De dienst kwam onder vuur te liggen door niet betaalde royalties, wat volgens onderzoek komt doordat 25% van de gestreamde muziek geen licentie heeft. Grammy-winnend artiest Imogen Heap zette ook zo’n soort oplossing op de markt, genaamd Mycelia.

Databases voor teksten, films, series & kunstwerken

Met Civil kunnen lezers journalisten direct betalen. Op die manier zijn journalisten niet meer afhankelijk van grote mediakanalen. Ook voor amateurschrijvers zijn er verschillende oplossingen beschikbaar, zoals het populaire Po.et. Dit bedrijf heeft een decentrale database waar auteurs hun content in op kunnen slaan. Je kunt er ook inzichtelijk maken wie jouw content gebruikt, al is het maar één zin.

Po.et biedt een WordPress-plugin aan. Daarmee kun je een gepubliceerd blog direct in de database van de startup zetten. Het Nederlandse bedrijf Fintage House heeft net zo’n oplossing voor films en series. Artlery doet dit voor kunstwerken.

Het einde van fake news?

Dagelijks komt het voorbij: fake news. Op alle mogelijke kanalen en in de meest ingenieuze vormen die het heel echt doen lijken. MIT kwam in onderzoek tot de ontdekking dat we fake news 70% sneller op Twitter delen dan echte artikelen.

Een groeiend probleem

We kunnen blockchain inzetten om het gebruik van wisdom of the crowd tegen te gaan. Er zijn dan ook verschillende startups die tokens geven in ruil voor het maken van echte content. Gebruikers valideren deze content.

Startups Trive en DIRT bouwden bijvoorbeeld een systeem dat fact-checkers beloont. PUBLIQ werkt met de echtheid-score van lezers, net als Civil. Maar niet alleen startups zijn druk bezig met het vinden van oplossingen voor dit alsmaar groeiende probleem. De Europese Commissie maakte het inmiddels ook één van haar speerpunten.

Clickfraud

Fraude met digitale advertenties (clickfraud) kost bedrijven wereldwijd bijna zeven miljard dollar per jaar. Dit groeit momenteel met 50% per jaar. Eén van elke drie aan advertenties uitgegeven dollar is frauduleus. En de World Federation of Advertisers (WFA) verwacht dat de totale kosten in 2025 groeien tot vijftig miljard dollar.

Bedrijven zetten bots op de de meest vernuftige manieren in om het aantal clicks en views omhoog te krijgen. Dit is inmiddels goed voor 48% van het websitebezoek. Het gaat zelfs zo ver dat bots bijvoorbeeld online configuratoren van auto’s als BMW (waarvoor je euro’s per configuratie betaalt) nep invullen.

Ad-fraude tegengaan

Dit is een ontzettend groot probleem voor adverteerders en uitgevers. Momenteel werken bedrijven er op verschillende manieren met behulp van blockchain aan om dit tegen te gaan. Deze bedrijven zijn vooral bezig met het bouwen van platformen die de authenticiteit van de impressies verifiëren, maar ook relaties in kaart brengen tussen adverteerders, uitgevers en consumenten.

IBM is op dit moment samen met Salon bezig met het project AdLedger. Dit is een pilot om een gedeelde ledger aan te bieden voor het transparant en inzichtelijk maken van clicks voor zowel adverteerders als uitgevers. Ook Amino Payments biedt een dergelijke oplossing, die daarnaast helpt met het optimaler inzetten van advertenties. AdEx gaat nog een stap verder met ‘advertentie-veilingen’ op de blockchain.

Samen makkelijker content maken

Blockchain inzetten is niet alleen op commercieel vlak interessant. Het kan ook samenwerkingen met betrekking tot contentcreatie een stuk efficiënter maken. Als je een goed product wil maken, zijn er vaak verschillende experts nodig om de content te maken, bewerken, designen en om het op de markt te brengen. Dergelijke processen zijn vanwege de kosten eigenlijk alleen mogelijk voor grote bedrijven.

Door het decentrale karakter van de blockchaintechnologie is dit nu ook mogelijk voor kleinere partijen. Eén van de eigenschappen van blockchain is dat niemand de opgeslagen data kan aanpassen. Dit voorkomt fraude. Blockchain maakt bijvoorbeeld de geschiedenis van een document op het gebied van wijzigingen (wat en door wie) volledig transparant.

Blockchain maakt de geschiedenis van documenten volledig transparant.

Eindeloos veel mogelijkheden

Zoals ik in een eerder artikel schreef: de blockchaintechnologie is nog redelijk nieuw en bevindt zich op allerlei vlakken. Nu zit het voornamelijk nog in de experimentele fase. Hoewel veel startups werkende producten al succesvol inzetten, is de impact nog klein. Maar de mogelijkheden zijn eindeloos en ik geloof er dan ook echt in dat de uitgeefsector in de komende vijf jaren geweldig kan profiteren van deze nieuwe technologie.

Heb jij ervaring met de blockchaintechnologie in de uitgeefsector? Hoe gaat dat je af? Deel het met me in een reactie hieronder!

Although many eyes are still focused on the financial sector, the impact of blockchain technology on various other sectors is just as interesting. There are several major challenges in healthcare that are currently being addressed with technology. According to a survey by IBM, 15% of healthcare executives claim that they will implement the technology this year, and 50% say the same of next year. Dutch minister de Jonge recently responded to parliamentary questions from D66: “Blockchain has the potential to organize cooperation, data exchange, and mutual trust differently. This can, among other things, lead to a reduction in the administrative burden.” Research Deloitte conducted among care executives confirms the following: 70% of these executives indicate that the significant improvement in collaboration between the various parties within and outside the sector is the main reason for considering implementation.

Many healthcare organizations are already busy implementing the technology and, during the various keynotes and training sessions about blockchains I was allowed to give in the past few months, the participating healthcare professionals also asked a specific question: In what area can we get started? Here are my top 4 focus areas:

1) The Decentralized Patient Register

One of the biggest issues in healthcare is access to an exchange of information about the patient. In many ways, this causes a lot of inefficiency, errors and unfortunately also many other nasty consequences. According to Frost research, nearly 40% of patient data contain errors. Research shows that miscommunication between medical professionals costs the industry $11 billion per year. This is partially caused by inefficiency, but according to the start-up Labchain from Heerlen, the Netherlands, this is also due to the fact that healthcare institutions in the Netherlands still exchange patient data by mail, which is re-entered manually. Unfortunately, this increases the chance of incorrect entries, not to mention the errors made on the basis of erroneous data.

Data Breaches

The safe storage of patient data also unfortunately often goes wrong. According to IBM, some 2,181 data breaches within the healthcare industry were reported between 2009 and 2017, with 176 million patient records stolen. This is interesting data for hackers because a patient’s file yields more than credit card details.

How nice would it be for you to always have access to your file, no matter where you are in the world? That you can track the status of medical treatment and share data with parties you trust? The GDPR legislation, which dictates that consumers should be able to access their data themselves, is a great first step. Unfortunately, that is technically impossible for almost all healthcare organizations despite blockchain being able to play a great role in this. The Personally Allocated Budget (PGB), whereby different organizations work together to provide consumers with the right care and that I discussed in an earlier post, is a perfect example. But the sharing of vital data with researchers, to allow them to use it anonymously for their research into diseases and medicines, is another example. Intel has recently launched a ready-made solution for the latter.

Solutions to the Challenges

Many dozens of companies are already building or even successfully implementing solutions to the challenges mentioned above. Together with SNS Bank and Deloitte, Radboudumc built “Prescrypt” to easily arrange repeat prescriptions. The patient can determine him or herself with whom the information is shared (doctor, pharmacist, etc.), in order to conclude a prescription request. In its Blockchain Lab, Philips is working on solutions for sharing data between the various healthcare providers and connecting researchers and patients who monitor themselves.

There are many companies that focus on improving the safety of patient databases. It has led the well-known MIT Media Lab to establish MedRec for this purpose and internet giant Google, with its AI department Deepmind, has already made it possible for hospitals in England to put patient records on the blockchain. Guardtime has already successfully implemented the same solution for the governments of Estonia and the United Arab Emirates, and BurstIQ, Factor, Medicalchain, SimplyVitalHealth, Patientory, Nebula and Medicalchain also offer working solutions for this issue.

There are also various cool companies that use blockchain technology in an even more radical way. Coralhealth uses the technology to make personalized medicines possible and recently successfully tested this. EncrypGen has launched a platform that allows people to sell their DNO in exchange for cryptocurrency. Lancor has used a combination of AI and blockchain to develop a tool to increase the reliability of cancer screenings from 60% (by people) to 90%.

2) Get Rid Of The Deadly Fake Medicines

People in the Netherlands are used to obtaining medicines from a pharmacy and they can assume that they are also “real”, i.e. directly supplied by the pharmaceutical company. However, according to HRFO, 15% of the medicines sold in developing countries are fake, something the World Health Organization claims causes 1,000,000 deaths per annum! This market for fake drugs is now larger than that of illegal drugs and it costs pharmaceuticals an estimated (HFRO) $200 billion per annum.

Several industries are already successfully using blockchain technology to make their supply chain transparent for consumers, be it for orange juice or diamonds. American legislation already obliges manufacturers and suppliers of medicines to track medicines from production to sale, to combat fake medicines. Dutch hospitals and pharmacists will have to comply by 2020. Easy “tracking & tracing” is, however, a technical challenge, and some pharmacists consider blockchain the big “game changing” solution. Chronicled recently won the Newsweek Blockchain Impact Award with their “MediLedger” solution which was used by the pharmaceutical company Pfizer and Genetech to place their supply chain in a decentralized manner on the blockchain. The French startup Blockpharma also offers a ready-made solution.

3) Preventing Fraud & Mistakes

Research shows that 5–10% of healthcare costs are fraudulent in nature. On a global scale, this is a very large amount. In addition to fraud, too many errors are still being made in the administration, and the increase of this, in addition to the many intermediaries that further amplify it, causes an unnecessary amount of costs, says Deloitte. It involves a massive amount of money that, obviously, could and should have been spent on providing real care.
 One of the advantages blockchain is being praised for is the removal of the “middleman”. By putting data on the blockchain in a decentralized way, many administrative processes can be automated and thus operate much more efficiently and fraud is prevented. Estonia has already taken a major step in this direction by having 95% of all healthcare data validated automatically and their operations made transparently. In the Netherlands, insurance company VGZ has successfully piloted an app that allows the entire maternity care to be placed on the blockchain. Parents can see on the app how many hours they have been receiving care and how many hours of care they are still entitled to. A maternity nurse can indicate how many hours they have actually worked. The insurance company can use this data to pay the maternity caregiver directly and to prevent fraud with the number of hours claimed.

4) Personalized Care

Personalized care is one of the biggest trends in healthcare. Gone are standard solutions for the masses: a customized pill or treatment based on, for example, big data from a patient, is the new norm. This is not only better for the patient, who therefore receives better care, but also for the sector itself. As an example, the industry calculated that $300 billion is spent on ineffective drugs per annum. Blockchain ensures the secure transfer of data between different parties, who can use this for the aforementioned research, but also personalized medicines. The company Robomed, which combines blockchain, artificial intelligence and the “Internet of Things” is a good example. Through chatbots and wearables, they collect and analyze a unique flow of information and translate this into practical advice for the patient.

Panacea for Healthcare

Blockchain is not directly the panacea for healthcare that will immediately help the entire sector with its greatest challenges. However, Frost & Sullivan claim that successfully applying the technology can save the sector many billions of dollars, mistakes, and human lives. The first thing it then really has to do is to make an effort in stopping the forming of data silos that currently are hardly shared and that, according to many experts, is already causing major problems. Just like in many other sectors, the time has come to fully experiment with and invest in technology, to ensure that healthcare is still affordable and effective in the coming years.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

I still remember this amazing moment. When I was 6 years old (in 1993), my father got his first computer from work. A device that took half the desk, but soon won my heart because of the 3D racing game “Stunts”. Four years later, I was introduced to the Worldwide Web by a friend, who had the Veronica website open and at the age of 14, I started managing the first community pages of one of the first websites in the Netherlands; Startpagina.nl. I can hardly imagine how much effort I had to make at that time, to connect to the internet and surf on it. The sounds of clicking floppies and creaking 56k dial-up modems are still well engraved on my memory.

“I think there is a world market for maybe five computers.”
Thomas Watson, president of IBM, 1943

Dependent On Blockchain As On The Internet

How different it is today, where we are constantly connected to the internet with our mobile phones and where I already hear people sigh if they happen to have a 3G instead of 4G connection. Although technological developments are going very fast at the moment, the run-up to the development of the internet has taken quite a long time. The precursor, ARPAnet, was developed already in the 1960s by the US-military as a means to allow computers from a few researchers to communicate with each other and to exchange documents. The development of technology took a long time; only in 1991 did the first website come online and in 1994 the first web store. Although Amsterdam was the first European junction to be connected in 1982, Dutch users could only surf the Internet publicly from 1991 onwards.

What started as a mere exchange of information between a handful of research institutes has now become an integral part of our lives. Who could have realized at the time that we became so dependent on the internet? From communicating, banking and listening to music to shopping. It is very funny to hear all skeptics talk about things like encyclopedias, CDs and route maps that the internet could never replace. Wikipedia, Spotify and Google Maps have proven the opposite, not to mention the many other everyday items.

By 2005 or so, it will become clear that the Internet’s impact on the economy has no greater than the fax machines. ”
 — Paul Krugman

Rise of Blockchain Technology

The current rise of blockchain technology is often compared to that of the internet. Not only its long duration but also the first anxious and rejecting attitude of consumers, companies, and governments, the cracked “bubble” and predictions about the insane impact on our society in the long term. According to the Gartner Hypecyle, blockchain technology is currently in the “trough of disillusionment”; experiments fail and companies see investments being burned. Developers within the industry exit rapidly and the press eagerly writes about the negative experiences. Why would we do so much effort for a Bitcoin payment within an online store, if it is also easy and safe with Paypal? Why would we spend so much time sending a tip via the Lightning network, if this can also be done quickly via a Tikkie (Dutch Whatsapp payment solution)? Convincing the crowd for adoption is clearly not successful yet.

Cryptocurrency Hype

Bubbles are, in my opinion, great for separating the wheat from the chaff, removing the hype from something and focusing on real problems that technology can tackle. Last year I was, at the height of the cryptocurrency hype, in New York at a large congress, where a startup came to talk about how they would reward housewives with their own cryptocurrency for creating content. For me, this sheer start-up was the confirmation that we were in a bubble and that it had to burst really fast, to take the press out of the sails and to get serious investors interested.

The internet had the same bubble development, in which many silly internet companies with millions of investments were set up between 1995–2000, resulting in the big ‘dot-com crash’ of 2000. The American Nasdaq fell 83%, shares of companies such as Apple and Amazon even 90% and the entire internet industry was put away as a big ‘Ponzi-scheme’.

Technology Development

What happened afterward in different areas has laid the foundation for the internet as we know it today. The technology developed rapidly, problems with scalability, speed, and security were tackled rapidly and the “mainstream” use followed quickly and grew exponentially for a long time. Blockchain technology is currently going through the same phase, where hard work is being done on a number of dilemmas raised by the use of first versions; safety, speed, and scalability. In addition, issues such as conflicting regulations and standardization.

Where, according to various founders of the internet, governments are late with certain laws and regulations concerning the internet, people are already very pro-active about blockchain technology. Consortia, such as R3 (financial institutions), B3i (Insurers) and Hyperledger (under the leadership of the Linux Foundation) are working on much-needed standards and issues such as certificates and education for the industry. There are hundreds of cool applications, but many are made in their own scripting language, working with one of the no less than 55 available consensus protocols, which makes working together complex.

Underlying Technology

Where ARPAnet introduced the underlying technology (TCP / IP), Bitcoin now does this with the underlying blockchain technology. In the beginning, ARPAnet was intended purely for communication, Bitcoin purely for transactions. ARPAnet provided freedom of information, Bitcoin freedom of value and transactions. Both also cross borders. With both technology emergencies, you saw the existing and endangered industries struggle against in the beginning and governments tried to curb the emergence with laws and regulations. As with any technology, the use of criminals was initially regarded as the reason why it should be banned, and both were initially a technology, not an entire industry.

As I wrote in a previous blog, we now have to wait for the big “Killer App”, which will make blockchain known, familiar and usable for the general public. Just like Netscape did with its browser for the internet. The development of technology under the internet; TCP / IP lasted no less than 30 years before it became known, loved and used worldwide. In the years that followed, it ensured that our society was completely transformed, billions of people came online and that new things were still being built every day that could not exist before. Where would Instagram be without the iPhone? Amazon without the internet? All technology that is further developed on previous technology.

Blockchain Training

Often when I give keynotes or training about blockchain, I can’t answer “where we are going” with this technology. It is impossible to predict because I do not know what developments we can expect after the developments that are currently taking place. It is certain that in the coming years we will soon see products and services that will be simplified and accelerated by blockchain technology. Not only in the financial sector, but in many sectors worldwide. As long as companies focus on solving problems, possibly with blockchain, instead of looking for problems that they can solve with blockchain, support will be broader and investments will be more effective. Just like with great interest I followed all developments in the field of the development of computers and the internet, I will also do this in the field of blockchain in the coming years. we have only just begun!

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

That was not was the intention!

The fact that Satoshi published the white paper just a few weeks after the major financial crash was related to his initial idea of using the decentralized nature of the Bitcoin blockchain to remove power from financial intermediaries such as banks and return it to the citizens. That fact that one of the companies that can be very much blamed for the financial crisis, the JP Morgan bank, recently introduced its own “coin” is a development that can best be described as “special” — especially as this is used for a closed, so-called “permissioned” blockchain that can only be accessed by JP Morgen and selected customers. This is something that completely goes against the open and transparent ideology that has been used for designing blockchain technology.

The same applies to the Facebook “coin”. Experts refer to it as “regaining control over your own data” (or “killer app”, which I discussed in a previous post) which is one of the biggest advantages of the blockchain technology. The fact that Facebook, the company that has been so controversial in recent times due to its disproportionate slurping and abusing of data, is developing its own “coin” has led to many experts ringing the alarm bells; will the decentralized character of blockchain not be lost again, because of a few large companies who will run away with the technology? It is not a thought that scares everybody immediately; when a small percentage of Facebook users use the “coin”, the number of worldwide crypto users would double immediately. That sounds positive for the adoption and further development of the ecosystem.

Further Developments

The most recent research from the European Union seems to confirm this. The study shows that it is precisely the private (often corporate) platforms that drive the adoption, rather than the open ones, such as Bitcoin. This is mainly because the developers of the closed platforms have much more freedom over the further development in the field of safety and speed, where open platform developers discuss and decide these kinds of further developments in a decentralized manner, which often requires a lot of time.

According to the definition, decentralization includes the distribution of various functionalities, power, people and all sorts of things from a central point. This ideology was initially witnessed at various large technology companies such as Spotify, who took away the distribution of music from the major distributors and placed it back with the musicians themselves. Uber did the same as it took away the power from large taxi companies and placed it with the drivers, and Paypal did so too by transferring bank transactions from the banks to the owners of the money. Unfortunately, we see many of this kind of company centralizing power in all kinds of ways themselves by, for example, buying up innovative startups, increasing entry barriers for competitors to a sector, or simply increasing their often almost monopolistic market share.

Blockchain Technology

The same is currently happening with blockchain technology, especially in the area of maintenance (“mining”) of the blockchain networks and ownership of the most important cryptocurrency. The top 6 largest maintainers of the Bitcoin blockchain, the so-called “miners”, control 75% of the global network because of their computer power. Some 75% of all this global mining capacity hails from China. What about the ownership of the coveted Bitcoins? The top 1,000 addresses own 40% of the total number of circulating Bitcoins.

Whereas the so-called “Initial Coin Offerings” (the blockchain alternative of the IPO of a company) contained many beautiful, decentralized properties, the so-called “Security Token Offering” (which I referred to in my previous post as the most-hyped cryptocurrency of 2019) has again had a lot of dealings with central authorities. Stablecoins too (which I previously described as a very important development in the field of cryptocurrency) remove the important, decentralized properties such as executing transactions without an intermediary while it is exactly these properties that made cryptocurrency so popular and practical.

Dutch Central Bank

Someone from the Dutch Central Bank recently asked me about the impact of blockchain during my keynote and “whether you want to decentralize everything”, whether it is good to remove authority where possible and place the power back with the citizen. Various platforms that aimed to do this with via the Internet in the past few years suddenly faced their social limits in many ways, after which everyone turned to the central governments for measures. It’s nice that they are still around, isn’t it?

Personally, I do not believe that every part of society is better off decentralized. However, I do already see many groundbreaking applications of the blockchain technology that, by means of decentralization, can have a tremendous impact on our society, and that would not have emerged if they were governed centrally. And this is despite the fact that we have only just begun development….

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Housewives generating content, Geert Wilders, bananas and managing your own grave. These are just some bizarre examples of focus areas of the many thousands of so-called “Initial Coin Offerings” (ICOs) that took place in 2017 and 2018. Although many blockchain experts initially saw ICOs as a way of setting up a community around an organization, most organizations mainly used their ICO to quickly and easily raise money from investors. Therefore it has become a form of crowdfunding for blockchain projects, where investors can participate for small amounts and receive “coins” or “tokens” in return. According to research from PWC, ICOs raised $10 billion in 2017 and $11 billion in 2018, which amounts to an average of $25 million per ICO. The largest ICO, EOS, raised no less than $4.2 billion.

The combination of the ease with which organizations collected money, the poor due diligence from (mostly new and inexperienced) investors, and the lack of regulation from governments lead to an enormous amount of fraud. Of the many thousands of projects, 81% ultimately turned out to be scams and always almost left the investors empty-handed. Many large investors are calling for measures to prevent scams and to restore confidence in the cryptocurrency market. Many studies confirm this and indicate that regulating the market will also result in a significant increase in investment. This would not only be from current investors, but also from the large established financial service providers that currently wait for this to take place.

The Next Step In Cryptocurrency: STOs

One of the most frequently-cited trends in cryptocurrency for 2019 is the Security Token Offerings (STO), which is also referred to as the solution to the above-mentioned problems and which is expected to facilitate $10 trillion in transactions in 2020. The concept was introduced by PolyMatch and there are now around 150 STOs active worldwide.

When talking about obtaining crypto or token in exchange for financial investment, Security Token offerings are very similar to the well-known ICOs. However, where an ICO does not have any voting rights, has no underlying value and is mainly used for access to an application or speculation on future growth, an STO makes you the owner of a real investment product, which is linked to an underlying asset, such as a share.

Performing an STO is a lot more complex since you have to comply with a lot of regulations and have to go through all sorts of complex procedures in order to comply with these regulations. This is also the main reason why most startups convert their plans for an ICO into an STO. It also prevents a lot of scams as the many background checks almost make it impossible for a scam to survive such procedures.

Why Not A Regular IPO?

Many traditional financial experts wonder aloud why STOs are needed instead of simply continuing to work with regular IPOs that have been used successfully for decades. I personally consider ICOs a great step towards more financial inclusiveness. Where regular IPOs, such as those of Adyen, can only be entered into by large institutional investors, most ICOs can already be supported with just a couple of tens. In addition, it makes it a lot easier for startups to raise money and grow a community, without having to search long for the right Venture Capitalist or bank.

There are a number of differences between IPOs and STOs, which make the latter very interesting. STOs can be traded 24/7 and are settled almost immediately, whereas IPOs can only be traded only during opening hours of the stock exchanges and, as a result, it sometimes takes days before the transaction is settled. By using so-called “smart contracts”, it is possible to pay out dividends and acquire treasury shares automatically. In addition, smart contracts remove many intermediaries and their work, which in turn saves a lot of time and money.

But Why Don’t We Immediately Switch Completely To STOs?

During the training sessions on blockchain and cryptocurrency that I am allowed to give, financial experts often ask me why STOs are not already more well-known and why they are not being used more often. I find Security Token offerings a very interesting tool for protecting the sector from scammers, making it a lot healthier and more trusted. However, it completely contradicts the decentralization for which blockchain was originally conceived. As STOs are under the strict supervision of the financial authorities, such as the AFM in the Netherlands and SEC in the United States, Security Token offerings are a no-go for many blockchain enthusiasts. One of the best-known cryptocurrency exchanges, Binance, has announced that they will not support STOs.

Other big names in the industry, such as Coinbase, state that they will start doing so from the end of this year. Some countries, such as China, have prohibited STOs because they see them as “illegal financial activity”: “I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it. You can only engage in such activities with the approval of the government” (Huo Xuewen — Hoofd Financial Bureau Beijing)

What Are The Next Steps?

The first Dutch STOs have already been announced, such as van Ockel and Blockport (update: the last one was aborted). Various sites show in easy step-by-step plans how you can establish an STO, such as that of the “inventor” of STOs, Polymath. There are also several nice overviews of STO projects worldwide. Ultimately the investor is the smiling third; they can invest in companies easier, faster, safer and cheaper.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

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