Foreword

About 2 years ago, I told my husband that instead of pursuing the usual path for a thirty-something general counsel at a start-up—toward the next bigger and better company—I would dive headfirst into the blockchain business world. He was … surprised. And I am certain that, as he politely smiled and asked “why?” he was wondering if I had hit my midlife crisis earlier than expected.

“Imagine that there’s a new candy store in town, with the best candies ever from all over the world,” I began my explanation, watching his expression change from shock to confusion.

Everyone is racing to the candy store, eager to get and gorge on the candy. Well, I have two choices here. I can stay general counsel and keep telling everyone how to optimize their candy enjoyment while reminding them of the various sugar-related risks, all the while secretly salivating with my hands and mouth pressed against the window of the candy store. Or I can get in and gorge on the candy. So I decided to do the latter. I’ll get in early, help build the blockchain industry, and enjoy the process firsthand, instead of vicariously through the experiences of my colleagues.

He responded: “Sounds good.”

And so, it happened! For the last 2 years, I have been on the front lines of this incredibly exciting and promising new industry. If you’ve kept up with the news at all, you might already know that the highs have been very high, and the lows have been, well, very low.

I have seen snake oil salesmen capitalize on the boom by deceiving the general public and obfuscating the technology. And I have seen the industry professionalize and filter out the phonies. I have met many so-called experts who ooze confidence but lack competence, but I have seen an increasing number of high-integrity professionals learn together and persistently develop use cases for this very complicated technology.

It is an experimental field. Doing is the only way to gain expertise.

The word “blockchain” has become a catnip for investors. At first, they were giving five, ten, twenty million dollars to any early-stage company, with no product and hardly anything to show beyond an idea—just an allegedly “amazing team” and the word “blockchain” thrown in there somewhere.

I talked to a few investors as I considered joining a few of these mysterious start-ups. I wanted to know what I was missing, what they were seeing that I wasn’t. I watched highly successful, grown men behave like my 8-year-old daughters do in Claire’s when they are overwhelmed by shiny objects. Thankfully, this unsustainable enthusiasm ended. We’re back to a much more prudent approach to investing.

I have seen companies use “blockchain” as a marketing tool to signal novelty and innovation. And I have increasingly seen companies put a serious effort into developing the technology and ecosystem. I have had many conversations about what is possible. And I have even seen several pilots and proof of concepts enter production and materialize in the real world.

Interestingly, blockchain is not geographically limited to Silicon Valley. It is a global phenomenon. Switzerland, Estonia, and Israel are often leading the developments in this field.

Enterprises and start-ups are finally building products that are meaningful on blockchain. We are finally solving problems and building what our customers may need.

Finally, I have witnessed highly regarded professionals debate, in full seriousness, whether Hyperledger, Ethereum, or some other blockchain platform is the best. Even ignoring the seeming convergence of platforms, this debate is a bit like asking whether a fork or a spoon is a better tool. The answer is obvious: it depends on what you’re eating. And sometimes chopsticks enhance the experience even more.

And, yes, blockchain, just like any other technology, can be misused or at least used for unintended purposes or can have unintended consequences.

Yet I remain highly optimistic about blockchain technologies and their potential. I am convinced that blockchain technologies will transform our lives in our lifetime. The changes will grow but at first will be small and focused on efficiencies—bigger, stronger, better, faster, and cheaper.

Eventually, when we finally understand the full potential of this tool, other technologies mature, and the regulatory dust settles, we will focus on building a more functional, beautiful, and just world. Remember in the Disney film The Little Mermaid when Ariel uses the fork to brush her hair? She explores the potential of the tool before she can optimize its use. Once we discover the proper use of this tool called blockchain, we will start solving problems that have historically seemed unsolvable. Right now, we’re still brushing our hair with a fork.

This will, of course, lead to broad innovation in business models. I remember when I started practicing law, everyone was looking for “SaaS lawyers.” To be clear, “SaaS lawyers” is not a thing, at least not anymore! SaaS (software as a service) was an innovation caused by the emergence of new technology at the time. Most people didn’t know much about it, so everybody was looking for SaaS lawyers to draft SaaS agreements.

Of course, in the short term, nobody could find an experienced SaaS lawyer. We had to train a generation of lawyers to negotiate and draft SaaS agreements. I am happy to report that most technology attorneys are well trained and proficient in SaaS agreements. These days “SaaS lawyers” are no longer a hot commodity; they are everywhere technology companies operate.

There’s a lesson to learn here. New technology leads to new business models, which, in turn, lead to demand for new skills.

That’s what I expect to happen with blockchain—new technologies, new business models, and demands for new skills. The question of business models can be broken down into two distinct questions.

The first question is what new value is created? Through research and numerous interviews, I identify seven prominent values that seem to be developing using blockchain technologies. The seven values are not exhaustive even today. They are merely those that I deem to be most promising. I expect that other values will develop over time.

The second question is, who, if anybody, can monetize this value? In this book, I primarily focus on the first question. You may think that it is premature to answer the second question, especially because the answer to the first question is still developing. Throughout the book I point out opportunities for enterprises and start-ups, though how we monetize blockchain technology will evolve in the next 5 to 10 years. So, keep an open mind and stay tuned!

New technologies and industries, like children, need time to mature. They start out reckless, at times irresponsible, and often confused—but full of potential. After all, the naïve investors throwing millions of dollars at a product they know nothing about and the snake oil salesmen deceiving them all see something in blockchain. It’s a highly exciting, though admittedly imperfect, emerging industry, but I strongly believe that as it matures, it will be harnessed to solve problems that we haven’t ever even tried to solve, problems we didn’t think could be solved. It will just require discipline, creative thinking, and persistence on the part of those developing it.