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Blockchain Breakfast Summer Series, Part 4: Implementing Blockchain Solutions

September 3, 2019   |   By Lacey Shrum

My friend Michael Lewellen joined me for the fourth and final Blockchain Breakfast of our summer series to discuss implementing blockchain solutions. Fun fact – Michael and I won a few prizes together at the Wyohackathon last year; we built a blockchain solution to represent cattle ownership through a token.

If you build it, they (may not) come

Even blockchain cannot solve that pesky startup problem: solutions must actually be used. Michael discussed building a business that is not only solving a problem but is also useful, from both a user experience and integration perspective. In the past, we’ve seen a lot of companies start out building large “blockchain companies” that worked in a silo. Because they could not integrate with other products or existing solutions or parties, once out of the box, the software was relatively useless.

For example, controlling our own health records using blockchain technology is an amazing idea – but our doctors, our insurance company, our pharmacy, and others must plug into this data in order to use it and we must be able to personally maintain the access to these records from nefarious actors (key pair security borders on “don’t try this at home” for most people). Simply building the storage and access infrastructure is not enough.

In other words, don’t build a blockchain company; build a tech solution using blockchain to solve a certain solution. Michael thinks a blockchain solution works best when there is a state that multiple parties need to rely upon (as our last guest Cole talked about). For most, blockchain is simply a new tool that traditional SaaS companies can use to solve their problems.

Michael also warned that blockchain is a new technology, and the use cases, boundaries, and abilities are still unknown. Most of the infrastructure, languages, and details are fragile. This, combined with the slowness of the system, has limited our ability to fully utilize blockchain and cryptocurrencies so far.

Risky Business

Implementing blockchain solutions is risky business. Because smart contracts are run on an immutable ledger, once cast, they are very difficult to amend or pull back. The language that smart contracts are written in is a new coding language and many “common” features are not yet built. This requires developers to build these features and then test them on the mainnet, with limited ability to control them after they are cast. In other words, they must build the language and speak it at the same time, on a widely public and permanent platform. This carries an extreme risk, especially when dealing with assets and money.

Bullish on Libra

It is no surprise that from a currency and privacy standpoint, Michael has serious concerns with Facebook’s new project Libra. He is excited about it from a technology standpoint, however, in that Libra may give developers easier, better, and safer tools to develop and cast smart contracts. Facebook has developed industry-wide standards in the past (that can be used on and off the Facebook platform) and Michael is hoping they do it again here. He’s also happy to have a large player like Facebook take a few hits from the regulators on behalf of the rest of the industry.

Quick Takes

  • Best Blockchain Use Case: Assets title and ownership representation through tokens
  • Worst Blockchain Use Case: Storing an entire movie on the blockchain #becauseblockchain
  • 10-Year Prediction: Companies will have integrated and readily adopted blockchain as a solution, and accessing blockchain’s quality features will be easily done with little back-end development.

Many thanks to all of our Blockchain Breakfast guests and attendees. If you would like to see a particular topic featured here on our blog or at upcoming blockchain events, please contact me at lshrum@velawoodlaw.com.

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Posted in Blockchain
Lacey Shrum
Lacey is an associate attorney at Vela Wood where she serves businesses that use blockchain technology and cryptocurrencies, helping clients identify and mitigate particular risks arising out of this new technology – including blockchain strategy and use cases, capital raises and security issuances through alternative forms, code-as-a-legal-contract drafting, and ethics. For a primer on the why’s of blockchain, always start with the OG whitepaper.