In the 1970s, the internet was used for local email networks within companies and the US military. Now it is a platform that hosts applications that have made us 10x more productive, if not more. In 1998, Amazon was an online bookstore. Now they own 30%+ of the global cloud computing market. The trend here is that when technologies are young, they are still finding their most useful applications. Crypto is one of those technologies that is incredible, and has many possible applications. One of those most important applications might be combating disinformation.
First of all, why does disinformation exist? Usually to benefit the party spreading the disinformation- and most commonly for financial or political gain. We’ve seen this over the past decade worldwide quite a bit- the internet and social media platforms have given conspiracy theorists and political radicals an efficient way to spread non-factual information- like Bill Gates having kids locked up in his basement that he uses for experimentation. What’s more, platforms like Facebook and Twitter have algorithms that are designed to maximize your engagement- and this often means promoting content that invokes feelings of rage and fear among its users. Facebook would prefer it if you got into an argument in the comments section of an article, because it means you’ll be engaged with the platform.
With the advancement of technology, disinformation has gotten a whole lot more convincing. AI techniques like General Adversarial Networks (GANs) can produce deep fakes- highly convincing videos, photos, or audio that are completely fraudulent. There’s even a website that lets you create your own deep fake video for free. In the most extreme of instances, deep fakes can cost a country their national election integrity, cost businesses tens of millions of dollars, or cost society’s knowledge of the truth about something that’s a global threat.
I am on the side of blockchain technology (strongly), but even after the investment gains I’ve made and the progress that crypto has made over the years, I still house my doubts and entertain them when I see FUD headlines about China cracking down on Bitcoin mining or the IRS investigating privacy cryptos like Monero. These doubts are heavily outweighed by my conviction that blockchain technology can solve real world problems and thus receive . It’s incredible how much like a Swiss-Army knife crypto can be, from being used for transferring money to storing value to referencing real-world information and now to preserve information integrity. I think it will take years for it to become fully integrated into business and finance, but it will happen. If you’re a crypto investor, you’ve got to wait- but it’ll be worth the while.
There is a strong potential use case for blockchain technology to be an authentication vehicle- after all, we’ve already seen plenty of successful use cases of blockchain for non-financial purposes, with platforms like Chainlink pulling real-world data into smart contracts. The problem today is that there are no consistent standards for media for identifying, labeling, and tracking digital media across platforms. With their distributed ledgers and immutable qualities, cryptos can help restore trust in media. The blockchain can create a registry of all of the articles, photos, copyrights, and dates of any media outlet’s content that can be immediately viewable by anyone. Imagine you’re scrolling through Facebook and see an article that says Bitcoin is going to be outlawed worldwide- but it’s from a news source you’re unfamiliar with. With the blockchain approach, you’d be able to see the entire history of this news source’s media, and check what the source of the information in the article was, and if that source had been changed. Algorithms could be built that assign accuracy scores to the publications of news outlets, so firms would have incentives to report accurately as opposed to only having incentives for clicks and profit.
Online media outlets need to be motivated to maintain integrity as well. News media has always been incentivized to promote headlines that are going to generate the most clicks.Online ads are optimized for engagement and not integrity as well- if Google lets the algorithms took over without throttle we’ll see the most racy, click-bait ads possible. Google and Facebook have beefed up their staff to combat disinformation, but keep in mind ad revenues are the cash cows for these companies so they’re not going to be too strict with censoring themselves. News headlines, even from reputable outlets, have similar incentives.
The cryptos that would solve this would most likely belong to the oracle crypto class, one of the six types of cryptos. Oracle cryptos aim to bring real-world data to the blockchain. Currently the largest crypto in the oracle class is Chainlink (LINK), a top-15 crypto with $8 billion of market capitalization. Another crypto that performs a similar function is VeChain (VET), a top-25 crypto with a $5 billion market cap. VeChain carries the same mission as the statements mentioned above- to deliver verified information, but its primary application is with supply chains and business processes, and maintaining that information with a distributed ledger. China (whose actions we typically associate with bearish headlines) is actually considering mandating the use of a distributed ledger for the sourcing of food products within its borders. This means that if this comes to pass every western corporation that operates in China and deals with food from Starbucks to McDonalds would need to adopt blockchain.
As with most of the proposed use cases of blockchain, the potential is enormous. The truth is that transactions and records have not kept pace with the digital transformation we’ve seen over the past 30 years, and blockchain aims to fix this. Blockchain can perform verification of records at fractions of the time and cost of current processes. It will likely take a while for businesses and media to come aboard, but the ball is already rolling. When we look at the fact that blockchain will take years to implement and become ubiquitous, it may sound a little depressing- but as an investor, the opposite is true. Since global transactions on the blockchain ($92 billion in 2016) are just fractions of a percent of all transactions worldwide ($411 trillion in 2016), we’re extremely early in this technology’s lifecycle and thus the most fantastic investment gains are yet to be made. My plan moving forward is and has been to dollar cost average into my crypto investments by buying with just a little money from each paycheck, and only an amount that I’m willing to lose because crypto is still so volatile.