How apps, digital trust and collaboration make blockchain a disruptor

8 June 2017

On Wednesday, 7 June 2017, at the base of Rockstart on the Herengracht in Amsterdam, the 49th Bitcoin Wednesday was held. Bitcoin Wednesday is an initiative to welcome everyone with an interest in the development of bitcoin and blockchain. This time around, with speakers from Loyal Garden, TNO and Coindash. What did we learn?


It is the application – not the technology – that is the “disruptor”

Chief Technology Officer Egbert-Jan Sol from TNO (and Programme Director for Smart Industry) primarily set out to define blockchain in concrete terms. We are only at the very beginning of the Gartner Hype cycle and not even ten years into it. Not long after the fall of the Lehman Brothers bank in 2008, Satoshi Nakamoto published his definitive paper on blockchain. Sol makes it clear that it is the application that is the real “disruptor” – not the technology. Since the rise of the internet thirty years ago, TCP/IP and DNS are the technology, whereas social media is the groundbreaking application. Now, blockchain is the technology, but bitcoin (the cryptocurrency) is the application, the “killer app” that could change society.



Blockchain is opening up a new financial world

The Marketing Director of Coindash, Ram Avissar also underlines the importance of the app. Coindash provides a platform that allows investors to manage a portfolio in cryptocurrency (e.g. bitcoin and ether). The reason for this being that investments are increasingly not being made through traditional stock market listings in conventional currencies, but online using digital currency. Initial Coin Offerings (ICOs) can be considered a variation of the classic Initial Public Offerings (IPOs) on the stock market. In practical terms, an ICO is the initial financing for investments in cryptocurrency.

A niche market? The market capitalisation of cryptocurrency overtook the USD 100 billion mark in 2017. That is twice what it was in 2014. During 2016, some USD 300 million were invested in cryptocurrency worldwide. That level was matched once again in the first quarter of 2017 alone. Investments are expected to surpass USD 1 billion this year. And if it still seems like a small field, the market is developing at an astonishing pace. The ICO of the company Matchpool raised an equivalent of USD 6 million in just one day. The ICO of the company BAT raised cryptocurrency worth USD 36 million in one minute. The bitcoin is now no longer the only one. Whilst a few years ago this “currency” was dominating ICOs at 85%, that number has fallen to 45%. Is bitcoin getting smaller? No, the cake is getting bigger. Due to benchmarks, price-tracking, directly copying investment strategies and a legal ecosystem, Coindash gives investors a scalable overview. Its ease-of-use should open up a larger pool of investors. Coindash also values having an ICO rather than an IPO too. Investors are familiar with the principles of cryptocurrency, so there will also be a group of Coindash users amongst the lenders. That matters because for benchmarking the service stands to benefit from user data. It goes without saying that the business model relies upon receiving a small payment for a user (investor) to follow another user on the platform.



Blockchain simplifies loyalty programmes

Ron Dijkstra (CEO) and Kiril Ivanov (CTO) for Loyal Garden have a different application. Loyal Garden brings together loyalty programmes from various providers via blockchain. It is surprising how many of these programmes there are. Between 2000 and 2017, the revenues from loyalty programmes tripled and they now represent a billion-dollar industry worldwide. And yet, only half of subscribers to loyalty programmes show any activity. Why don’t the programmes come together in a standardised way? Blockchain is opening the door to transactions on a global scale. Loyal Garden is a centralised wallet presented in a web-based application. Subscribers collect their points in the form of “coins” for each programme. For example, a coin from Albert Heijn is blue and a coin from Jumbo is yellow. You can then swap blue and yellow coins for each other in Loyal Garden. An underlying comparative relationship expressed in bitcoins or another currency determines the comparative value.
The participating companies themselves determine whether the points for their programme can be exchanged for the points of another company. Companies can get to grips with how their customers handle the points that they receive. A “back end” with analytics gives a company an overview of the “balance” a customer has: how many points does the customer have and how do they go about using or exchanging them? This creates further insight into the interaction with their own loyalty programmes. Parties where these loyalty points can be used (e.g. a SME company) can increase their visibility on Loyal Garden.

An average household is subscribed to between 14 and 20 loyalty programmes. With Loyal Garden, customers have all their points collected in one place. All transactions are recorded in blockchain using a “smart contract”. There is even a functionality in the pipeline which will enable users to buy loyalty points using MasterCard money on the platform.



Blockchain & co are facilitating digital trust

The reason we humans are ahead of animals, according to Egbert-Jan Sol, is our ability to communicate. Whereas groups of monkeys have a maximum communication range of a hundred other monkeys and dolphins a maximum of a thousand, humans are now able to connect with a billion fellow humans. And yet to this day we still have not managed to build trust in that enormous digital network: “On the internet, no one knows you’re a dog” (Peter Steiner, The New Yorker). Using PGP (pretty good privacy) technology involves two different asymmetric keys for encryption and decryption (encryption before transmission and decryption following receipt). In addition, the principle of Byzantine Tolerancy requires that all involved parties consent to a decision. And not – as history has taught us – to blindly follow the commands of a potentially malicious leader. PGP and Byzantine Tolerancy together make a good couple for increasing digital trust. On top of that, physical distance is also being obliterated as blockchain makes transactions into “blocks” and processes them every quarter of an hour at a random location in the world. If you are a stock trader, it matters how much distance there is between you and your computer – but in blockchain this effect is removed.


Blockchain is taking on the digital “middle men”

The modern internet is the place where the service providers (Uber, Airbnb) make the big money. Notably, these are platforms that do not have taxis and hotels of their own. Blockchain is decentralising the internet again. What if inter-company transactions for Uber and Airbnb were not recorded by their own servers but by a central blockchain? What if these platforms no longer owned their own data? In blockchain technology, everybody owns the data and every transaction is one hundred percent transparent. Centralisation of the administration takes the added value away from the middle man: in terms of the ownership of data. Blockchain can also give privacy back to the user. A key principle of the concept is to shield digital identity as much as possible and to actually keep as much data as possible out of consideration. For a transaction between people, only a unique ID and the properties of the transaction itself are required. The Coindash platform turns these words into actions: ICO portfolios of other investors are only displayed anonymously.


Blockchain is also taking on the traditional “middle men”

It makes sense that banks are first in the queue to become blockchain “adopters”. At the same time this is ironic, as the ultimate blockchain does not have any authority at all, just complete transparency and decentralisation. Blockchain is calling the future role of banks into question. In a perfect world of “smart contracts”, there would be no central function. Will financial institutions eventually just be server farms? Or will they develop alternative blockchain-related services, such as management and security of digital wallets?

An average day or night at the Port of Rotterdam is saturated with communication. Freight forwarders serving the rest of the chain, as well as insurers, banks and regulatory bodies, all make divergent, detailed arrangements. The uniting feature is that all of the participants in the process each have their own registration system. What if you could gather all of those flows into one standardised blockchain? What if all those arrangements were put together by smart contracts in our transparent system?


We need each other!

No matter how pioneering the ideas are, every initiative is marked by “together”. An individual bank in the blockchain is meaningless; the registration of transactions only becomes meaningful if other financial stakeholders join in. Coindash does not have a good benchmark if there are only two investors using the platform. Centralising your loyalty programme is pointless for Loyal Garden if only three of the twenty programmes have joined in. Egbert-Jan Sol argues that our history in the Netherlands as a country of interlocking polders gives us an advantage. Our tradition of making compromises helps with combining numerous systems into one blockchain. Plus the low extent of hierarchy (in contrast with somewhere like Germany) makes the transition to a centralised process smoother.

There is of course still a lot more to explore. Who should our government turn to under the new 2018 European GDPR legislation if for some reason data leaks from a blockchain? Just like any other big step forward, enthusiasm comes accompanied by big question marks. And for every success there is a big flop, conclude the hosts of Bitcoin Wednesday (“Sunlight is the best disinfectant”). However, no-one can deny anymore that something major is being unleashed and blockchain is giving society a thorough shaking up.



Do you want to know more about this subject? Please contact us on +31 (0)33 258 28 30 or

Latest news

Nachos Hackathon 2022

7 September 2022

We don’t know if you’ve heard already, but there is yet another crisis on our horizon:... read more

DDMA Customer Data Award Night on November 19th, 2020

29 April 2020

About the Award The field of data driven marketing is evolving fast. To honor these developments,... read more

Report meetup – Conversational Analytics: February 12th, 2020

18 February 2020

Meetup conversational analytics @ True Storm Ciara had only just receded, when our Meetup at True... read more

Subscribe to our newsletter

Never miss anything in the field of advanced analytics, data science and its application within organizations!