Does anyone really understand the blockchain’s distributed ledger system or the digital mechanisms of cryptocurrency? Even entrepreneurs knee-deep in technology’s latest emerging markets will confess they are still learning. Perhaps the potential for modern cryptography is best shown and not told. The pros and cons of crypto are beginning to come through as business and social use cases surface in the real world.

When Toni Lane (pictured), co-founder of CoinTelegraph and founder of Cultu.re, first waded into bitcoin, very few people she spoke with grokked its disruptive powers. Now, she favors demonstrations over conversations.

“People are not actually going to get it until it’s useful to them,” Lane said. Blockchain and cryptocurrencies are complex technologies that will have to be outfitted with a complete-idiot’s interface in order to break the mainstream, she added.

“Who made the money in the internet? It was the people who understood how to own the user interface,” Lane said. Case in point: How many people know the technical details behind the Google searches they perform with their eyes half closed daily?

Blockchain’s practical applications are manifesting along the gamut from scams to social good initiatives. As people learn or get burned from them, an appreciation of the technology’s capabilities will lead to more innovation and some guardrails against misuse, according to Lane. The almost anarchic nature of blockchain and cryptocurrency development is both fertile ground for excellent ideas to take shape and a potential minefield. Some examples from around the U.S. and beyond are scribbling out a dos and dont’s list for the industry.

Lane spoke with John Furrier (@furrier), host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, at the CoinAgenda event in San Juan, Puerto Rico. They discussed far-reaching business and economic and social potential of blockchain and cryptocurrency.

This week, theCUBE spotlights Toni Lane in our Women in Tech Feature.

Balancing ecosystem ledger

Regulators — like the Securities and Exchange Commission — are increasingly bearing down on cryptocurrency entrepreneurs, calling for an end to scams. Where is the rot coming from? Different crypto models provide a glimpse into how corruption can take hold. For instance, there are bitcoin cryptocurrency tokens and Ethereum — an open-source blockchain-based distributed computing platform with smart contract functionality. These two technologies feature different levels of governance by the network of people who operate within them, Lane explained.

“Ethereum created something that was adaptable and empowered people to be creative,” she said. “Yet they’re creating incentives for people to launch products that are I believe … could cause some serious harm to the ecosystem once the air is let out of that bubble.” The Ethereum framework allows users to experiment freely; this has led to some great achievements but also some very dodgy initial coin offerings; 46 percent of ICOs have already failed, Lane pointed out. 

Bitcoin, on the other hand, has developed a cryptography system that is more effective at sealing out bad actors. “Cryptography is not about let’s do some rapid prototyping; cryptography is about let’s put a lot of thought into this thing and have mathematical certainty that this is not exploitable,” Lane stated. Interdependence within the network is a huge part of how bitcoin thrives. Of all possible ways to shore up crypto integrity, an interdependent network is the best thing going for now, she added.

“The network is the most secure and the least corruptible,” Lane stated.

That said, cryptography isn’t perfect, and bitcoin users should always be on the lookout for scams, according to Lane. Just recently a number of would-be thieves stole Lane’s identity, posing as her to request bitcoin from her social media friends.

A frightening $9.1 billion per day is lost to bitcoin scams, according to research from Bitcoin.com.

Regulators and innovators right the crypto ship

We need “hardcore reputation systems” in the industry — not just social ones, Lane stated. She pointed to egregious abuses of social rep systems in China; for instance, being 30 seconds late to an Uber in that country could result in a hit to a person’s score. Cultu.re — a startup dedicated to blockchain governance and self-sovereignty — is working to build a rep system based on “restoration and humanization” to create a “collective norm,” Lane described.

Many believe the potential social benefits of blockchain and cryptocurrency are too great for nations to allow fear to strangle innovation. Switzerland, for one, is formulating guidelines that take a cool-headed approach to ICOs and cryptocurrency. “Our balanced approach to handling ICO projects and [inquiries] allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system,” the country’s Financial Market Supervisory Authority said in a statement.

Blockchain can give individuals sovereignty over their data — the same data that has made Facebook and Google monstrously rich, according to Lane. This could create universal basic income, she added.

Another potential application of blockchain might be to mediate disputes of a social or political nature. “It’s the idea that we’re all coming together to share context in a way that’s non-aggressive and non-accusatory, so two people can believe two totally different things and still develop enough mutual respect to live together peacefully in a society,” Lane concluded. 

Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of the CoinAgenda event.

Photo: SiliconANGLE