Davos, Switzerland – This year at Davos there are a dozen sessions on and off the formal agenda talking about blockchain – the underlying technology of cryptocurrencies like bitcoin.
I’m personally involved in half a dozen of these, including a session where I’m speaking to the heads of central banks and Ministers of Finance. Blockchains are a big deal. The Internet today connects billions of people around the world, and certainly it’s great for communicating and collaborating online. But because it’s built for moving and storing information (and not value) it has done little to change the way we do business. When you send information to someone, like an email, word document, PDF or Powerpoint, you’re really sending a copy not the original. It’s OK (and indeed advantageous) for people to print a copy of their powerpoint file, but not OK to print money.
With the Internet of Information, we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook all do the work of establishing our identity, helping us own and transfer assets, and settle transactions.
What if there was an Internet of Value – A global, distributed, highly secure platform, ledger or database where value could be stored and exchanged and we could all trust each other without these powerful intermediaries? Collective self-interest, hard-coded into this new native digital medium for value, would ensure the safety, security, and reliability of commerce online.
Today at Davos I participated in a world first: The digital signing of a physical book. Book signings are a standard part of an author’s life, and most view it as a chore. Readers also find the experience less than thrilling. They stand in line to get an autograph and perhaps share ten words with the author.
But in Davos the digital signing my new book, Blockchain Revolution, was raised to a completely new experience. As soon as each book was signed, the book turned from pulp and paper into a digital gateway to a community of blockchain enthusiasts around the world.
Blockchain – the underlying technology behind digital currencies like Bitcoin is being discussed everywhere at Davos. And as I learned today, books will never be the same. I had agreed to give a speech for the security company Wisekey. Unbenounced to me, they created a chip that can be attached to my book and read with a mobile phone to measure its authenticity, setting me and the purchaser up to be part of a community. Let me explain.
Think of the book as a credit card. When you sign up for a credit card you get a piece of plastic with numbers. But that’s not the credit card’s appeal. It’s the services that the company can offer you as a card member, such as air miles and preferential access to concert tickets.
Now the same sort of benefits can be done to inanimate objects. Makers of luxury items have already started embedding chips into their products to guarantee the authenticity of a product. It is estimated that counterfeit goods cost the global economy more than $600 billion annually.
Right now, if you buy a world-renowned Canada Goose parka you have to be wary of buying a counterfeit knockoff. The Canada Goose website currently gives you all sorts of tips on how to spot a phony parka. A real Canada Goose parka will have a hologram that can’t (so far) be duplicated by the counterfeiters. But this is low tech. It doesn’t bring you benefits other than knowing parka is genuine.
So makers of very expensive luxury goods such as watches have started to embed chips into their products than can talk to a buyer’s cell phone. Hold the watch close to the phone and your phone will tell you if the watch is genuine. The watch becomes a node on the global Internet of Things. The watchmaker then can also establish a connection with you and offer additional services.
Now imagine books becoming nodes on that same network by giving each book a digital signature. If the author chooses, they can allow the reader to give them feedback or ask questions. Similarly, the author can allow readers to speak to one another. Suddenly a book is turned from an inanimate object into a community of people.
Now the author can restrict the interaction to readers that have actually purchased a genuine copy of the book, and not a knockoff or photocopy. The author can offer the reader additional services. They can alert the readers to special events in their area. They can send the readers other articles by the author, subsequent to the book’s publication. The author can do this for free or for a fee.
Rather than a one-shot proposition, the author can convert the book from a single purchase into an ongoing relationship with the reader. It is more like an interactive magazine subscription.
Some authors already do this by creating a Facebook page for the book. But then Facebook owns the relationship, and dictates what can and cannot be done with that connection. Facebook makes money from selling advertisements to the readers.
Some authors create their own website for a book so they have freedom to do what they want. But the author has no way to restrict this to only readers than bought a legitimate copy of the book.