Is Blockchain the Ultimate Open Source Disruptive Technology?

Is blockchain an even more disruptive technology than the web?  Could IOT be the best place for blockchain to take off?

Fred Wilson of Union Square Ventures has been talking a lot about the blockchain recently, so I decided to learn more about it.  I read the Marketing the Blockchain e-book, watched The Grand Vision of a Crypto-Tech Economy video and the video keynote of Overstock CEO Patrick Byrne at the Bitcoin 2014 conference, and did some more research on my own.  While far from an expert, I do see some interesting parallels to the adoption of open source software.  Here’s what I’ve learned — please comment and tell me if I’m wrong:

What’s the Big Deal about the Blockchain?

Blockchain is a distributed ledger system using crytography and open source software.  The goal of the blockchain is to allow anonymous and secure record-keeping.  Record-keeping not of the mundane, high speed data in databases, but more critical information like money, transactions, and identities.

But here’s the big thing: instead of those records being kept in one central, allegedly secure place, it is kept distributed in a peer to peer way, while also being (allegedly?) secure.

Ok, that’s nice.  So what?

Now stop for a moment.  Think about this: What does every institution in our society do?

What does your bank do?

What does the Federal Reserve, European Central Bank, Bank of England, or any other central bank do?

What does your local registrar/recorder do?

What do eBay, etsy, Paypal, uber, airbnb, Facebook, Amazon, Yelp do?

What does every business, big or small, do?

They all keep records in a central, allegedly secure, place.

So what if there was a technology (open source no less!) that could replace every single centrally kept source of information with a peer-to-peer distributed alternative?

The internet is a big deal because it fundamentally replaced centralized information repositories such as newspapers, TV, and encyclopedias with distributed, peer-to-peer alternatives.  If the blockchain could replace all these other parts of our society, right down to our monetary and banking systems, wouldn’t it be a 10x, 100x, 1000x more powerful force for change than the internet?

IF.

Could it Really Happen?

Blockchain enthusiasts would tell you that it is already happening: Openbazaar is out to replace eBay, Amazon, and etsy.  Steemit is out to replace reddit, twitter, and Facebook.  And then, there’s bitcoin, out to replace your money with a digital currency outside the control of any government!  Not only is it accepted at Overstock now, but there’s actually an impressive list of places that take bitcoin for payment, including Expedia, Microsoft, Whole Foods, Dell, Home Depot, and Sears.

But here’s the catch: These places are accepting bitcoin based on its spot exchange rate to mainstream currencies.  For example, when you checkout at Overstock, your shopping cart is quoted in dollars, and then Coinbase will quote you a bitcoin price based on the current bitcoin/dollar exchange rate.  This bitcoin price is good only for a short period of time (10 minutes from when I tried it.)

So in reality, “accepting bitcoin” today is like accepting the Discover card.  It’s certainly a necessary step if bitcoin is to go mainstream, but it doesn’t mean that bitcoin is replacing established currencies.  For that to happen, we’d actually have to see an economy that’s priced in bitcoins.  This means a group of people must be willing to take a relatively fixed amount of bitcoins for their goods or services, instead of pricing them in dollars, euros, or another established currency.  Usually, that means other people must be willing to take their bitcoins in turn.

For example, you might bill $100 per hour for your services.  You probably wouldn’t change that rate as the dollar fluctuates from $1.05 to $1.2, $1.3, or even $1.6 to the euro.  Would you similarly accept 0.1 bitcoins instead of $100 per hour, whether 1 bitcoin was worth $700, $1,000, or $1,300?  That depends on what you can do with it, doesn’t it?  If you live in the United States and pay rent, buy groceries, and go to restaurants and movies with dollars, it won’t matter to you what the dollar to euro exchange rate was, because all your expenses are still (more or less) the same in dollars.  Similarly, until you could buy all sorts of stuff at relatively stable bitcoin prices, you’re taking quite a risk fixing your price in bitcoins.

Hence we have the classic adoption problem for new technologies: Until we get a large group of people to adopt it, most people wouldn’t want to adopt it.

Lessons from the Quiet Revolution

Most blockchain advocates deeply believe that a de-centralized economy is a fundamental virtue, but they also realize that the rest of the world won’t care.  They know that for the blockchain to take off, it must be an invisible part of the apps that power regular people’s lives.

Which sounds just like open source software: Most open source developers believe that software freedom is fundamentally good, and software copyrights and patents are fundamentally evil.  Richard Stallman’s The GNU Manifesto could practically be translated into a manifesto for blockchain just by changing some words.  Yet that’s not what drove the adoption of open source software in the end.  We did not, as a society, all rise up to overthrow the shackles of commercial software.  Instead, open source is a quiet revolution: When you open your smartphone, check some reviews, surf the web, play a game, or buy something online, you’ve probably used at least a dozen different open source technologies.  But most people don’t even know what “open source” means (although it sounds nice.)

What drove this quiet revolution?  In retrospect, open source software has been most successful when three conditions are met:

  1. The market space has no dominant commercial incumbent.
  2. The market space was not deemed mission critical.
  3. Open source was the easiest, lowest friction option available.

For example, Linux, Apache (actually just the httpd web server), MySQL, and PHP (aka “LAMP”) were all successful because they were used for building web-based applications in the early 2000’s.  Commercial alternatives like Solaris, Microsoft IIS, Oracle, and ASP .NET were not dominant the way Microsoft Windows and Office or SAP were.  Funnily enough, back then websites weren’t considered mission critical by most companies, so it wasn’t a big deal to let the geeks try out some new technologies.  And it was much easier for those geeks to download and install LAMP and start making a website than go through the long procurement process with Oracle, Sun, or Microsoft.  So open source took off.

What Don’t You Like About Establishment?

Contrast this with the blockchain today, and we see that in all the niches we’ve talked about, there is a dominant player: Our currencies and banks, major corporations, and social networks are very much established.  Furthermore, they are very much mission-critical.  We get paid with dollars and know that we can pay our rent or buy groceries.  We put it in the bank and trust it’ll be there tomorrow, and we don’t have to worry about losing all our money if our hard drive crashed and we lost our bitcoin keys.  We trust the reviews on Amazon and eBay and know that when we buy something, the goods would get to us.  We trust that uber will send us a driver who is not going to hijack us, and the driver trusts that uber will pay them for our trip.

We may not like everything about them, but how many people are ready for a peer-to-peer, de-centralized alternative?  And if anything went wrong with that alternative, “who would I sue?”

So can we find some non-mission-critical applications where there are no dominant incumbents?

We might think that blockchain is a natural fit for places that fall outside the established monetary and banking system, for example in countries with failing currencies.  But the dominant incumbent currency in those countries is usually the US dollar: there are apparently more dollar bills in circulation outside the United States than inside for that very reason.

We might think that technologically, the blockchain is a natural fit for peer-to-peer transactions, like eBay or uber.  But those are very mission-critical applications.  There are plenty of eBay sellers whose livelihood depends on getting paid and getting good reviews.  They’ve learned how to get those through eBay and Paypal.  Would they trust that livelihood to someone else easily?  As for uber, it’s the driver’s livelihood and the rider’s life that are literally at stake.

And then there’s health care.  Here’s a great one: Our health care system is antiquated.  Records are not even kept electronically.  We don’t trust our doctors, hospitals, and especially insurance companies and government health departments.  There is no dominant incumbent.  Wouldn’t it be great to be able to keep all my health records in the blockchain, so I can share them with doctors and insurers and even other physicians at my choice?

But what if something happened to my health records?  What if they got stolen, tampered with, or simply lost?  It could be life or death.  Talk about mission critical.  So would most people trust Google or a peer-to-peer distributed ledger?

One interesting blockchain application is micro-payments.  Today’s payment networks, such as Paypal and credit cards, have a minimum threshold below which the costs are just too great.  It’s not worth it to send someone $0.05 electronically, but it is with blockchain.  So can we have an economy where blockchain is used to transact in such small amounts?  Perhaps.  I don’t know of anybody who does.

But what if micro-payments is paired up with smart contracts like Ethereum, which allows transactions to happen automatically based on rules.  And then tiny payments, perhaps even smaller than $0.01, could be sent between computers and devices as they connect and work together.  By 2020, we’re supposed to have 20 billion (according to Gartner) to 38 billion (according to Juniper) Internet-Of-Things (IOT) devices in the world.  Maybe all these devices could just accumulate small amounts of money for us on the side, and this could be a new, non-mission-critical field without an incumbent technology.  Hmm….

As you can see, I haven’t figured out a break out application for blockchain.  But then again, like I said at the beginning, I’m far from an expert–not even much of a beginner in fact.  If you think of something, please let me know in the comments.

 

Uniqlo’s New Mobile e-Commerce Business Model

Watch this video — it might just be the future of mobile commerce:

Did you notice

  • A cool mobile app
  • Creating DIY art

Did you also notice that it’s a business model without

  • Upfront design
  • Inventory
  • Advertising

Uniqlo is not just thinking, Gee how do we get more Instagram followers to sell the same old T-shirts?

They’re creating a whole new business model by taking the mobile platform to its logical conclusion.  Their app, which does a lot more than Instagram’s simple filters, works hand-in-hand with a business model to turn a T-shirt (commodity) into your own work of art (priceless.)

If little Instagram could build a billion-dollar business by turning the mobile phone into the ultimate device of self-expression, why couldn’t Uniqlo…or you?

Was Microsoft the Greatest Open Source Business of All Times?

Before you flame, take a look at this ad:

MS-DOS Emerges, courtesy RegMedia.co.uk

MS-DOS Emerges, 1983, courtesy RegMedia.co.uk

This is a historic document that shows the exact moment when Microsoft began taking over the world.  Its main products at the time were BASIC and DOS, but DOS was the indispensable layer of the Personal Computer (PC) industry.   It sat between the hardware and software of the IBM PC and its myriad of compatible clones.

What’s most amazing about Microsoft and DOS, though, is that everything above and below them were open sourced.  If you wanted to build an IBM-compatible PC (like Compaq and Dell), the architecture was openly available, as long as you built it for DOS.  If you wanted to write software for IBM PC’s and compatibles (like Ashton-Tate and Lotus), Microsoft and DOS provided you with open standards too.  As a result, millions of IBM-compatible PC’s were built and millions of programs were written for them — far more than ever was the case for Apple’s Macintosh.  They turned IBM and Microsoft into the standards of the industry and made companies like Dell, Lotus, and Intel wildly successful.

But not as successful as Microsoft.

Because through it all, Microsoft didn’t open source its products.  There were no DOS (or Windows) alternatives that a Compaq could package with its PC’s to run Lotus 1-2-3.   There was never an open “PC operating system standard” that would allow software and hardware vendors to write once (or build once) and run any operating system.   Competing operating systems like CP/M, Xenix, OS/2, and BeOS all failed because there wasn’t enough software written for them to attract hardware manufacturers, and not enough hardware manufacturers making computers to attract software developers.  As a result, Microsoft ended up controlling the entire PC industry, eventually even muscling giant IBM out.

Microsoft’s succeeded during the PC era came by making knowledge freely available, essentially open sourcing the architecture of PC hardware and software.  Decades later, Microsoft would stumble because it couldn’t make ASP.NET, Silverlight, and Windows Mobile the standards for web and mobile.  Today Google is trying the same strategy by making Android the platform of choice for both hardware manufacturers and software developers.  (Funnily enough, Apple didn’t play this game with Microsoft back then and doesn’t care to join Google now.  They just march to a different beat altogether.)

Moral of the story?

For open source developers: Open sourcing of software is just small potatoes.  There is so much information that, if made openly available, could create whole industries and make people’s lives better.  So isn’t it time we stopped thinking just about the code and started thinking about how to create openly available knowledge that could benefit the world — and build great businesses?

For everybody else: Do you still think open source is a charity?  Or are you thinking, “What kind of openly available knowledge could grow my business?”

A World of Possibilities for Open Source

Ten years ago we started with the (immodest?) goal of bringing open source to enterprise software.  Today, there are even greater opportunities for open source — not just in software, but as a fundamental force for positive change in the world.

Imagine a world where smart devices could be 3-d printed anywhere.  Further imagine all those devices connected, through the internet,  to every other person and organization in the world.  This should be a world where our homes could respond to our movements to turn appliances on and off.  We could grow food using less water because sensors would know when to turn the irrigation on and off.  Our physicians could know if we need to come in for a check up.

But will this be a world where a few large companies control all the devices, and only their chosen partners are allowed to provide us services?

Or will this be a world where the designs for smart devices will be openly available?  Where there are open API’s for many startups to innovate and create new business models?

That is the opportunity — and challenge — for open source.

Let’s Stop Imitating Amazon and Make E-Commerce Fun Again

Has online shopping become boring? Every website shows you grids of categories and products, with cross-sells and up-sells. Scroll down and you might see a few reviews. Somewhere are the same add coupons, sign up for our emails, and free shipping offers you’ve probably seen a hundred times already.

The sad truth is that there has been very little innovation in e-commerce. Online retailers seem content being electronic catalogs of products, competing with each other on pricing and fulfillment. (Save an additional 5% and get free next day shipping!) In other words, we’re all stuck imitating Amazon.com.

Does it have to be like this? May be not: there are actually other reasons why retailers exist in the first place. Imagine you just invented The Cool Gadget ™. Here are some good reasons for signing up resellers:

1. Distribution. Retailers get your product to the end consumer by putting it online or in a store, warehousing, fulfilling the orders, and collecting payments. It’s a lot of mundane yet important steps.

2. Support. The retailer helps answer your customers’ questions, so they could understand and use your product properly. Often this means answering the same questions over and over again.

3. Integration. Your product is great, but how does it help me look better, get connected, and stay cool? The retailer could show the consumer how to meet these important life with your product, often by combining it with other products.

But today, most online retailers function solely as distributors and just list products and fulfill orders. Customer support is limited to basic order fulfillment information, and few online retailers even think of themselves as helping to meet their customers’ life needs. Hence the sad trend of “Showrooming”, where customers go research at local stores then try to find deals online.

Which is where we are today: After nearly 20 years, ecommerce is settling into middle age as a junior partner on the retail scene.

But it would be dangerous to get complacent: There is a new generation of online shoppers. They were born after the Internet, and to them, online is the first and best way to learn about…everything. They will want to use the web (and their phone) not just to buy products they’ve already seen in a retail store, but also help satisfy their deepest needs.

Would you be doing that for them?

Our Responsibility: Making the World Better with Technology and Open Communities

What do you say when people ask, “Why do you do your job?

Is it a mix of I’ve-done-it-for-years, I’m-good-at-it, and it-makes-me-money?

That’s all fine and good, but please take a moment to think about the bigger picture: Our world is heading to a peak population of 9 billion people within our lifetime.  More than two billion people have no access to drinking water.  Over a billion people live in urban slums.

The same skills that you already have — designing and building technology and online communities — could solve problems like these for billions of people.  So as important as your day job may be, think about how to use what you already know to make a bigger difference.  When you are part of something bigger than yourself, you’ll find it giving you a fresh sense of purpose and making you feel more alive as well.

That is what we are going to be doing as well.  Going forward, please go to opentaps.com to follow the development of our business application software.  Meanwhile, here we will be focusing on how technology — specifically open source software — and open communities could help solve some of the world’s bigger challenges, such as energy, water, and housing.

opentaps.com and the Next Generation of opentaps

When we started opentaps nine years ago, our goal was to create great business software from open source.  And have we ever!  Most people wouldn’t have believed that enterprise-class open source ERP and CRM was possible, but we did it — thanks to Linux, Apache, MySQL, PostgreSQL, OFBiz, JasperReports, and many others open source projects.

The world, meanwhile, has moved forward too.  It’s no secret that the future of software is mobile, social, and big data, and open source software is moving in those directions as well.

What does this mean for real businesses?

Imagine being able to capture all your interactions with customers as they happen: by email, on twitter/Facebook/pinterest, via text messages, or by phone.  Anywhere.  Any time.  Any how.

Then imagine being able to use that information to make your customers happier — and sell more.

That’s what we think a whole new generation of open source software could do for you.  And we’ve started by creating a whole new opentaps to do it.  Because it is built with a whole new different set of open source technologies and a different cloud-open source business model, we’ve created a new site at opentaps.com for this new product.  Meanwhile, the existing open source ERP and CRM lives on at opentaps.org and will continue to evolve.

We hope you’ll join for the next phase of our journey — the best is yet to come.

opentaps CRM2: A New Way To Do It

If you’ve ever thought, “There’s got to be a better way,” take a look at opentaps CRM2.

The new opentaps CRM2 takes a completely different approach to opentaps 1.x or any other major CRM system out there.  Instead of having all these screens and forms for you to come and enter data, we’re bringing opentaps CRM to you:  We’re automatically capturing the discussions, emails, and tasks that are the back bone of your relationships with your customers, bringing them into the cloud, and helping you manage them there.

Oh, also: We’re making it as easy as possible for you.  There’s no big software package to download or install.  No database to set up and maintain.  No code base to merge and upgrade.  You don’t even have to ask your users to stop using their favorite email program.  You just sign up for an account, plug a few simple widgets into your existing opentaps instance, and synch up your users and emails.

Then just sit back and relax.  Everybody just keeps working as before.   But from your web interface, you’ll see all the emails and discussions back and forth between your company, your customers, and your vendors:

opentaps CRM2 Dashboard

opentaps CRM2 will even help you find the emails related to your orders, invoices, and payments automatically (and it would be very easy to get it to do the same for quotes, production runs, etc. — whatever your company works around):

CRM2 Discussion Thread

Sounds pretty cool, doesn’t it?  Our beta users have thought so for about a year now.  Why don’t you give it a try and let us know how it goes?

Who’s the Real Social Network: Email, Text, Facebook, or Twitter?

Ever wonder how people really connect these days?  Here are the numbers:

Daily volume of email, facebook likes, text/sms, tweets

Daily volume of email, facebook likes, text/sms, tweets

  • Emails: 182.9 billion per day
  • Text: 6 billion (Note: this is declining.)
  • Facebook: 4.75 billion Likes
  • Twitter: 0.5 billion

Even with Facebook, Twitter, Pinterest, Instagram, Tumblr, old-fashioned email is still how most of us connect online most of the time.

Sources: radicati (emails), Expandable Ramblings/Facebook (Facebook), Forrester (text/SMS), Twitter (tweets).

 

A New Philosophy for opentaps

With the first widgets for opentaps 2 are some big changes: Not just a new look and feel or a new technical framework, but a whole new philosophy for building better software with open communities.   This philosophy could be summed up as:

Make opentaps Benefit the Maximum Number of People

Simple as it sounds, but unfortunately this is not how most business software is built: Most business software is very targeted to a small group of users, and their creators and consumers often focus more on features lists than actual usefulness.

For us, this philosophy required fundamental re-thinking about how we did things and three goals for opentaps:

1.  Make it Easy

opentaps should be easy: easy to set up, easy to use, and easy to extend.  It should be hosted so you don’t have to download and install anything.  It should work where and how you want to work.  Finally, if you know any programming, you should be able to extend it without learning a new framework or language.

2.  Make it Inclusive

We want as many people as possible using and extending opentaps.  This means no matter what your preferred tools — Java, .NET, PHP, Ruby, or Javascript, you should be able to work with opentaps.  To make this happen, opentaps needs to be more than just modular.  It needs to be independent, so that each part of it could be written and maintained by different developers in different languages.

3.  Make it Useful for Everybody

We’re not here just to build an ERP or a CRM.  We want to help any group, no matter how big or small, work together more effectively.  The first opentaps was good for big companies with teams of programmers or consultants.   We want the new opentaps to work for everybody.

Tell us how opentaps could make your organization work more effectively.  We’re listening.