The rise of cryptocurrencies has shone the spotlight on their underlying technology, which is known as the blockchain.
A wide number of startups are now pitching services using the technology, which is often touted as the next major development since the internet.
This trend was visible at a two-day blockchain conference in Tokyo last week that attracted nearly 100 firms, including many from overseas, who showcased a variety of products. Their offerings ranged from job matching platforms and cosplay ecosystems to health care services and even a smartphone handset.
Blockchains work using a peer-to-peer network that links people’s computers directly, without a central server, and keep a record of all transaction data from their creation. The data can be monitored by individuals, and people are incentivized to process transactions on the blockchain by contributing their computer processing power through the chance to earn cryptocurrencies, also known as tokens or coins, which are issued as a reward. The resulting transaction record makes falsification impossible in practice.
The technology is often seen as innovative due to its immunity from data falsification and the complete traceability of transactions, while the fact that it does not use a central server, it is argued, prevents a small number of gigantic firms from taking control over users’ personal data.
The startup Beepnow was introducing at the conference a blockchain-based platform to help freelancers and clients find appropriate jobs and workers.
With the existing systems used by job matching services, there is the risk that some freelancers might reset their account to eliminate bad evaluations. So “applying blockchain technology would improve the reliability on the (matching) platform,” said Beepnow CEO Alex Tsai.
From this fall Beepnow will issue its own digital token for sale, not only to raise funds for application development but also to realize a “token economy” — where payments between client firms and self-employed workers connected on the Beepnow blockchain can be completed within the platform, in the same way people exchange other cryptocurrencies.
Tokyo-based Cure Inc., which runs a cosplay community site called Cure WorldCosplay used by 720,000 cosplayers worldwide, is also aiming to utilize digital tokens to create a community-scale economy on a blockchain. In this case, it wants to create a virtual currency for cosplayers and fans.
The firm is preparing to offer Cosplay Tokens that cosplayers can receive as payment for their work, or which fans can use to support their favorite cosplayers.
Daisuke Nakagawa at Cure said the firm already has a user base numbering in the tens of thousands, so issuing its own token should fit well with its existing global cosplay community because the blockchain facilitates easy cross-border transactions.
The issuing of original digital tokens by companies has become a popular fundraising method known as an initial coin offering, or ICO. In such an offering investors use major cryptocurrencies such as bitcoins to purchase the company-issued original tokens, and the companies can then sell the more widely used coins to get cash. The method has become a money-making machine for blockchain startups, but has not been without its downside, with many such offerings turning out to be less than trustworthy.
For this reason, Nakagawa said, the trend may shift and firms that already have a user base of a certain size “will be more likely to offer tokens to incorporate and enhance their services with the blockchain technology” rather than just trying to raise funds.
Arda, a project by New Zealand-based Performance Lab, which has supported athletes for over 25 years with wearable devices, artificial intelligence and other technologies, will see the introduction of a token for wellness.
“Just because it’s a cryptocurrency doesn’t mean people want to use them,” said Angus Blair, chief product officer at the firm, emphasizing the importance of improving the user experience when applying blockchain technology.
Its fitness app, scheduled to debut this fall, seeks to motivate users to achieve their exercise goals by rewarding them with digital tokens, and they can also choose to sell their health data to other parties, such as insurance companies.
Blockchain technology is often hard for general consumers to understand, so the Israeli development team Sirin Labs is taking a different approach.
It came up with what they’ve called the world’s first blockchain smartphone, named Finney, which is scheduled to be released globally in October.
Powered by a custom-made operating system, apps for Finney — including communications functions — work with a blockchain to ensure greater security and prevent data leakage and hacking.
As well as including a built-in wallet function for major cryptocurrencies, the app store for the operating system will not charge fees to developers. By contrast, Apple and Google’s smartphone app stores take about 30 percent from app sales.
“The idea of Finney is to bridge the gap between the blockchain economy and the mass market,” said Nimrod May, chief marketing officer at Sirin Labs, adding that providing a device like a smartphone, which people use regularly, can bring them closer to the technology.
The two-day Tokyo conference, which ran through June 27, was one of the biggest blockchain events to be held in Japan.
By showcasing firms that are developing blockchain-related products other than cryptocurrencies, it was anticipated the event would “help promote understanding of the blockchain technology in Japan,” said Shinichiro Yoshida, representative of the event organizer, Global Blockchain Council.
According to Yoshida, nearly 70 of the around 100 enterprises gathered for the conference were from overseas.
Asked why he participated in the conference, Blair of Performance Lab said, “Tokyo is one of the most mature investment markets for cryptocurrency … We’re here to connect a community more, to understand more about their needs, so we can deliver a better product to the market.”