Korea and China may be tightening regulations to keep the cryptocurrency craze under control, but Japan next door continues to host one of the most bitcoin-happy economies of the world. The epitome of this movement can be found in Kasotsuka Shojo, or the Virtual Currency Girls, a Japanese girl band determined to harness the power of J-pop to spread the word about virtual currencies. Donning masks, knee-high socks, maid uniforms and cryptocurrency symbols, the members sang with a kawaii fervor at their debut live concert, performing songs like “It’s hell if you buy at a high price!” and “Don’t underestimate the Market.” Fans could buy merchandise – and even photos with their favorite performer – but only if they paid in bitcoin. Add to that the government’s lax attitude about virtual currencies and you have an entire generation creating a no-holds-barred speculative bubble.
Kasotsuka Shojo’s debut single The Moon and Virtual Currencies and Me is eerily reminiscent of Pussy Riot’s Punk Prayer. Be it feminism or virtual currencies, both their members, like modern missionaries, gained notoriety for singing hymns to the gods they praise.
But as disciples don’t we have a question or two for those who preach the gospel? What is bitcoin? How does it relate to other virtual currencies? And how does it differ from blockchain?
Just hearing the words “nodes” or “miners” makes my eyes glaze over, but as it turns out, blockchain is like the internet. We don’t actually have to know how it works to be able to use it. All the average bitcoin enthusiast needs to know about blockchain technology is what it does: Ease the transfer of payments and other kinds of information.
It’s a ledger that protects and encrypts each transaction by connecting it with nearby transactions. That way, no single part is susceptible to hacking or copying. Identical “blocks” of information are spread across a network and cannot be controlled by any single entity, making the system robust. Because the network maintains and grows these “blocks” of transactions by sharing and continuously updating them, it’s as quick and collaborative as a Google spreadsheet.
Paging Harry Potter, I can’t help but think of blockchain’s blocks as digital Horcruxes. The way Lord Voldemort would divide his soul into pieces and embed them into unique objects to avoid being completely destroyed is not unlike the way blockchain splits our data to maintain its integrity. The database also is decentralized, so it removes the need for middle agents to convey the information. “Not too shabby,” the Dark Lord might say. Welcome to digital anarchy.
Australia’s primary securities exchange, which recently brought in blockchain to clear and settle trades, might potentially be saving millions of dollars by removing middlemen from transactions. Even a major financial service corporation like MasterCard is slowly inching toward a new world order with its “MasterCard Blockchain API” – that, after Ethereum’s co-founder posited that blockchain might eventually replace credit cards. And the latest phenomenon sweeping the cryptocurrency market off its feet? CryptoKitties. These one-of-a-kind breed-able collectibles are like Pokémon cards, except that an average kitten would cost you ~50 ETH (based on the Ethereum blockchain), or nearly $23,000 in actual money.
Initially used only to support the exchange of virtual currency, blockchain technology has quickly started to lend its robustness and security to myriad other uses. It’s already transcending the world of finance to impact healthcare, food safety, diplomacy and education.
Last year some of the world’s biggest food companies like Walmart, Nestle and Unilever tapped IBM’s new blockchain platform for their supply chains. Now that each shipped product is attached to a unique tag, its origins, storage temperatures and expiration dates can be instantly monitored at every checkpoint. For instance, outbreaks of foodborne illnesses can easily be tracked back to the source, resulting in smaller batches recalled and limited financial losses.
In a slightly more bizarre case of blockchain use, chickens get to try out facial recognition. A Chinese online insurance company came up with “GoGo Chicken,” a program for conscious eaters who’d like to track their own pre-purchased chickens to see if they are truly farm-to-table.
And there’s more. Blockchain has led to the proliferation of “smart contracts,” or programs that self-execute only upon meeting your specified conditions. Imagine a world where your bank account only got charged if your Seamless order came with no anchovies and extra sauce per your request, and really did deliver in 40 minutes as promised.
At the same time though, many blockchain-related innovations are starting to seem increasingly superficial. Iced tea and lemonade brand Long Island Iced Tea Corp. changed its name to Long Blockchain. Former photography heavyweight Eastman Kodak Co. launched Kodakcoin. Both were instantly rewarded with ridiculous stock surges. When investors find themselves latching onto the blockchain wave through the most farfetched of connections, it’s probably time to revisit the fundamentals. Cartoonist Tom Fishburne hits the nail on the head when he says, “In the long run, if we want to market iced tea and burgers, we can’t stray too far away from the iced tea and burgers.”
Nor does the insanity stop there. Long Blockchain’s name change is part of a larger trend where businesses are lapping up the craze by adding bit-, -coin and -chain as affixes to their names. Trouble is, frenzies eventually fade. It’s like getting your brand-new boyfriend’s name tattooed on your arm. You might just be better off sticking to cards and gifts.
Blockchain is the result of big data, AI and the Internet of Things finally coming together to give rise to decentralized systems and communication platforms of the future. But in an era when everyone from the Winklevoss Twins to a Japanese girl band waxes poetic about the power of blockchain, brands would be wise to keep the late ‘90s dot-com bubble in their rearview mirror as they evaluate blockchain’s opportunities, challenges and applications. Sooner or later this bubble is bound to burst. Or one day, we’ll probably have to change our name to CoinMatter.