Craig Wright Bitcoin Masterclass (London) – May: Day 1 Session 3
Dr Craig S. Wright, Chief Scientist at nChain, held another edition of his Masterclass series at an exclusive venue in London in May 2023.
The Masterclass course forms part of a monthly series aimed at helping attendees understand the fundamentals of Bitcoin and the technology behind it. The series will give you a comprehensive overview of Bitcoin’s history, theory and design. Wright discusses the future of Bitcoin and the unbounded scalability of nChain’s blockchain solutions, with potential use cases across several industries.
In this part of the series, the workshop establishes the utility of NFTs and why atomic swaps are necessary in this context. This part of the Masterclass is particularly interactive, as participants share and discuss their ideas.
Use-cases of NFTs with real utility
Wright discusses the potential applications of non-fungible tokens (NFTs) and blockchain technology. He mentions that when nChain filed their patents, they were not made for what they are most commonly known for. NFTs can be used for the exchange of goods and services. NFTs can represent real-world goods, enabling peer-to-peer exchanges without the need for centralised marketplaces.
The discussion emphasises the importance of setting terms between two parties in a peer-to-peer transaction, and how blockchain technology can support this using atomic swaps. Wright also discusses the benefits of NFTs in scenarios like ticket reselling, bartering, and tracking goods for tax purposes.
Wright goes on to discuss the potential applications of blockchain technology, particularly in tracing luxury goods and electronics. He mentions how blockchain can help verify the authenticity of products like Rolex watches, making it easier to combat counterfeit products. The discussion also touches on the traceability of second-hand phones and computers, which can be sold globally.
Furthermore, Wright introduces the idea of using blockchain technology to facilitate transactions in the futures exchange, such as oil trading. He highlights the importance of having a delivery date and conditions in futures contracts, emphasising the need for physical delivery. Wright then encourages participants to brainstorm various use cases for tokenisation.
The discussion following the brainstorming session in the workshop involved various ideas related to tokenisation and its applications. The key points can be summarised in three different categories.
NFTs and tokenisation in entertainment and creative industries
- NFTs for music albums: This idea involves tokenising music albums as NFTs, allowing fans to gain a percentage of royalties from album sales, access early concert sales, and engage socially. It aims to create a sense of ownership and connection between fans and their favourite artists.
- Pre-selling products via NFTs: This concept focuses on tokenising products like hats or concert tickets through NFTs, enabling advance sales to NFT holders. When handled correctly, this isn’t considered a security, but precautions against misrepresentation and fraud are necessary.
- Speculative trading of concert seats: The idea is to use NFTs to represent seats at concerts, allowing advance purchase and speculation on their value. It may involve trading fees and venue involvement, introducing a speculative element into the ticketing process.
- Tokenising customisable products: Tokenisation applies to customisable products, where users who design unique items can tokenise their designs and receive royalties if others use or adapt their designs in the future. This promotes creative collaboration and intellectual property rights.
Tokenisation in finance
- Crowdfunding and regulation: This discussion focuses on the regulatory aspects of crowdfunding, emphasising the need to follow rules when raising funds through crowdfunding. It mentions varying limits for crowdfunding amounts based on industry and location.
- Atomic swaps for payment efficiency: The proposed solution was to leverage atomic swaps, a feature of blockchain technology. Atomic swaps would allow customers to pay for services only when they are provided, reducing the need for refunds. This approach could potentially reduce the financial burden on companies and enhance transparency in payments.
- Tokenising returns: Participants explored tokenizing returns to discourage bad faith returns. Customers would receive tokens for good behaviour and trust-building with the platform. These tokens could be traded with other users, potentially impacting the user’s reputation.
- Overcoming challenges with current payment systems: Current payment systems often come with drawbacks, including chargebacks, disputes, and delays in receiving funds. Blockchain technology was proposed as a way to mitigate these issues.
- Digital cash and handling costs: Digital cash solutions were discussed as alternatives to traditional cash. While cash has handling costs and is susceptible to theft, digital cash can offer the benefits of cash transactions without these drawbacks.
Tokenisation for retail and small businesses
- Marketplace for wineries: This idea involves creating a marketplace for wineries, including producers, buyers, and the distribution network. Supply chain financing is a key financial product, allowing producers to sell invoices for products not yet produced, improving liquidity.
- Car rental services: Addressing payment issues in car rental services, especially regarding refunds and transparency. Offering future reservations with transparent pricing to customers in the car rental industry. Leveraging blockchain for insurance purposes, especially in determining accountability in case of accidents or damages.Exploring broader applications of blockchain technology beyond car rentals, including expense tracking and management.
- Example of olive oil cooperative: An example was given of an olive oil cooperative in which farmers could directly participate in profits based on their contributions, leading to more equitable distribution and fair compensation.
