Chasm Waxing: A Startup, Cyber-Thriller (10 page)

“
This is
a big
concept,
so I want to make sure I highlight it.
The right person can only add the right
amounts
. Once
it’s recorded, t
he transaction
can’t be modified.
Cryptography
and encryption
make the transaction tamper-proof. This
ensures
that the Blockchain is
trustworthy. No company has to guarantee that it’s trustworthy. I’m
concentrating on the business aspects of Bitcoin and the
Blockchain. I mean, the underlying technology is
sophisticated
—but I want you to get Blockchain from a business
perspective.

“
This is the
critical
point
. When the dry cleaner accepts
Bitcoin, they trust the Blockchain. They don’t have to
trust
a payment
processor. More importantly—they don’t have to pay a transaction
fee to a payment processor.

“
As the dry cleaner, I
trust that
you own the Bitcoins
that you are giving me,
and that you
haven’t spent them anywhere else. Then, your Bitcoins become mine.
Now, only I can use
them.
Or
anyone else that has access to my
passcode—but that’s a separate issue. The Blockchain records all of
this. And again, encryption and cryptography allow you to trust
it.”

Watkins
stopped to take a breath. “Are you following
me?”

“
Yes,” said Samantha,
“enough at least. But we’re not so concerned with Bitcoin; we’re
using it ourselves to pay the Gamers. We want to make sure that
these Gamers can’t claim that Gamification Systems is their
employer. We not only
want
to avoid tax issues, but we don’t
want
to be
liable if the Gamers injure
themselves, like
if they trip and fall
during a VR session. The Pokemon Go lawsuits raised a lot of
eyebrows.”

“
Right,” replied Watkins.
“So hang
on
just a little longer. What I’ve just described is what’s been
going on for the last
10
years—let’s call it Blockchain
1.0—Blockchain
only
related to Bitcoin.

“
Most of the companies’
recently going public—BitSa, BitMents, the Bitcoin wallet
providers—those type of
businesses
are focused on Blockchain
1.0. BitSa processes payments for less than 1%. Credit card
companies typically charge a 3-5% per transaction fee. So that’s
pretty disruptive. The big banks are also heavily employing the
Blockchain to
clear
transactions.

“
Arguably, you can call
Bitcoin the first killer app that uses the Blockchain. I mean,
Bitcoin has had its ups and downs over the years. It had a massive
run up in
value, and then
it crashed. N
ow
that
the price of Bitcoin has
stabilized,
it’s
on a nice growth curve.

“
But, let’s talk about
Blockchain 2.0.
This is
the Blockchain applied to other ideas than
Bitcoin. And now, I’ll directly address your employment issue. Have
you guys heard of BlockHR?”

“
A little,” replied
Samantha. “I read a blurb about them in
Fortune
. They’re something like a
national employment agency?”

“
Samantha, when do you
find time to read?” teased the General.

Samantha replied coyly, “I find time
to do a lot of things.”

Even over the phone,
Watkins was uncomfortable. He returned to the Blockchain as quickly
as possible. “So, BlockHR is a like an employment agency and
payroll processing company. But, they’re completely
based
on
Blockchain 2.0 technology. They use the Blockchain to record
smart
contracts.
Unless both parties agree, the digital contracts are unalterable.
The smart contracts function just like an executed legal agreement.
In fact, I think you’ll see a lot
fewer
lawyers in the
future.
”

General Shields howled. “Insert lawyer
joke here.”

Watkins laughed, but only
because Shields was paying for his time. “BlockHR’s smart contracts
are agreements
among
the company, their employees, and their clients.
The software-based, smart contracts enforce those agreements—all
with minimal human intervention. Legally, BlockHR is a Distributed
Autonomous Company—almost like a robot company. They do have a
small management team, IT staff, and a sales force.

“
Samantha, as you know,
BlockHR is one of the fastest growing startups in the world. Their
initial growth was due to revenue from all the sharing companies.
Now, many other companies are using them. I think they just closed
another round of VC funding, for something crazy like over
$1B.

“
Back to Blockchain 2.0.
Anything that necessitates a
middleman
can either be made
more
efficient,
or eradicated by Blockchain 2.0. In my opinion,
Blockchain will be on par with the Internet as a force of
disruption. It’s going to change everything.

“
For example, I just
bought a new BMW. I didn’t talk to
a
single person. The dealership
bound
the car
title to me on the Blockchain. They did that with a cryptographic
hashing algorithm. When a hashing algorithm
runs
against a block of
data, like the car title, it returns a result. This
result
is a
series of characters called the hash. The hash is like a digital
fingerprint that uniquely identifies the document.

“
If the hash ever changes,
you know that something on the title has changed, even if it was
just a punctuation mark. So no one can steal the title of my car.
No modifications to the title can proceed without my approval.”
Watkins was so excited about
Blockchain
that he forgot who was on
the other end of the phone. He was explaining cryptography to the
boss of the best cryptographers in the world.

“
Oh, I’m sorry General. I
didn’t mean to talk down to you.” Certifying hashing algorithms for
the DoD also fell under the purview of the NSA.

“
Not a problem, Mr.
Watkins,” said Shields. “I’m sure they use a hashing algorithm from
the SHA-2 or SHA-3 family. By the way, did you know that
hashing
is the
best way to store passwords? When you create your password, the
hash should be stored, not the password. Later, when you log-on and
enter your password, the hashes are compared. Storing actual
passwords is a terrible security practice. Hackers can easily steal
them. If you ever call a company because you can’t remember your
password, and they give it to you, they didn’t hash the
passwords.
They’re
storing your password in plaintext.”

General Shields winked at
Samantha.

“
That’s fascinating
General. Thank
you,
” said Watkins, sounding
embarrassed. “So continuing, I can use the Blockchain to prove my
ownership of the BMW to anyone in the world. The BMW’s title
history will be on the Blockchain for everyone to
see—forever.
Because it reduces
the cost of so many types of transactions, Blockchain usage is
growing rapidly.
It’s cheap because it’s
transparent, efficient, and there’s no middleman to pay. Or, at the
very least, the
middleman
’s fees can
be reduced
.

“
Back to BlockHR.
Let’s
say; you
use an employment agency to pay your Gamers. Typical
employment agencies charge a hefty markup on the employees,
sometimes as much as 40-100%—or more. Because
software-based
smart
contracts and the Blockchain
automate everything, BlockHR takes a much smaller cut. BlockHR pays
the employees via Bitcoin, which is visible on the Blockchain. The
IRS is going to start processing tax returns and payroll taxes via
the Blockchain soon.

“
I see BlockHR as the
solution to your problem. There’s one more alternative. It’s a step
beyond
BlockHR. It’s 100%
automated. No humans are involved. I
t’s
a true
robot company. Legally, it’s known as a
Distributed Autonomous Trust. But it’s newer and unproven. I’m
concerned with who you’d sue in
a
dispute.
And, unlike BlockHR, they’re not
indemnifying their clients yet. So, I’d stick with
BlockHR.”

Samantha
was
pleased.
“Wow! You could have just said call BlockHR. But, thanks for the
background information and your counsel. I agree with you.
Blockchain is going to be huge. My mind is struggling to grasp all
the ramifications.” Samantha politely ended the call.

“
General,
” said Samantha, flirtatiously,
“we’re way ahead of schedule. I expected some serious work to solve
this problem. All I have to do is phone
BlockHR; so...we
have some time to
kill.”

Shields devilish smile
returned. “Before we
kill
that time, let’s go over your financials.” The
General glanced quickly at the cash flow statement.

Samantha let him digest
the report. “You can see why I’m so excited about Gecko. I’ve got
75 days of
cash
. All of my staff is critical. I don’t want to lay off
anyone. So, I’m a little stressed out right now.”

“
I know. I feel good about
Gecko. If they’re a no-
go,
or you can’t get the money from them in time,
then we’ll work on closing a new round of financing. I’ll urge the
investment team
to value
Gamification at a
higher
valuation,
so
that you don’t have to give up as much equity as last
time.”

Pressure released from
points all over Samantha’s body. She took her first satisfying
breath in
months.

The General continued,
“One
last
item before we start killing that time. Becca said the
Gamification Systems’ API
can
work with other games; games you
didn’t design. Right?”

“
Yes, that’s the idea.
Just like I don’t want us to be an AI company, I also don’t to be
in the business of developing video games. Becca did a great job
with Castle Gecko, but I’d rather have the company focus on
improving the core gamification software—G-Bridge. It’s just a
matter of meeting with the game manufacturer and determining what
gaming engine they’ve used.”

“
Outstanding,” replied
General Shields. “I’m going to introduce you to Velocity Game
Studios, the makers of
Fog of War.
It’s a blockbuster
first-person
shooter,
video
game.
Velocity has a contract with the US Special Operations
Command—SOCOM—to port
Fog of
War
.”

“
Port it for
what?”

“
Velocity created a
version of the game that incorporates classified information.
Special forces operators use if it for close-quarters combat
training. The Velocity team has
programmers
with TS/SCI clearances.
Your work with Velocity
is
a
TOP SECRET
project
code named, FOGGY. I need
you to pick one of your most trusted employees with a TS/SCI
clearance. This employee needs to make
Fog
of War
work in GAMESPACE. I suspect that’s
Saul?”

“
Yes, it’s
definitely
going
to be Saul. G-Bridge was my idea, but Saul was the brains behind
the architecture.”

“
Fine. Then, I’m going to
read you, Saul, and some Velocity employees into project FOGGY, as
well as Lin. The only SCIF
accredited
for FOGGY will be on your
floor. Also, I want you to expedite the integration with Prosthetic
Thought.”

“
Ok,
” said Samantha.
“We
’re
close to being integrated. Their stuff is a little buggy.
Thought-based control of VR is cool, but it doesn’t work all the
time.”

The General agreed.
“They’re improving their algorithms that understand brain
waves. I’ve been told that all the kinks
will be gone soon. Of course,
you can’t
discuss anything related to FOGGY with anyone at Gamification, but
Saul. Also, there’s a project that I can’t
discuss
yet. But, I’m going to
need your top REALSPACE talent.”

“
General, you’re
so mysterious.
That’s going to be Ali Asir
and Saul—”

“
Do you
absolutely
need
Saul? I’d rather compartmentalize FOGGY from the other
project.”