Today, I sat down with Forrest Marshall (Software Architect) and Mustafa Inamullah (Creative Director) of MIMIR Blockchain Solutions to discuss the current state of blockchain technology and their company. The intent of the interview was to uncover some of the key value drivers of the blockchain industry and separate fact from fiction after the recent popping of the cryptocurrency bubble.
For a quick summary of MIMIR Blockchain Solutions, please view the video located at the end of this blog post.
Thanks again for sitting down with us today. Given recent market dynamics (you end last paragraph with same phrase), we wanted to begin today by discussing some of the lessons from the Dot Com bubble and how they apply to blockchain. Could you discuss some of the learned themes that may have influenced your business model?
Our focus in researching the technology bubble was to answer a simple question: what companies survived and why? No matter if you look at the Dot Com bubble of the late 90s, the Railroad bubble of the 1880s or the Tulip mania of the 1630s, the lesson is that the underlying technology or asset still exists. Innovations from the technology bubble still power economic growth, railroads continue to connect and enable businesses, and tulips can still be found at your local supermarket.
The big takeaway was that companies focusing on infrastructure to improve and sustain the internet survived. Think about Amazon, Adobe, IBM, and Oracle. With the benefit of hindsight, we can see that (1) companies focused on short-term gains were severely challenged and many even failed, (2) investors can punish you fast, and (3) infrastructure-focused companies prevailed.
How does MIMIR apply some of these lessons to their own strategy?
Since the founding of the company in 2017, we have always focused on how to provide long standing value. Initially, we set out to create a particular decentralized application (a “DAPP”). We soon realized there were serious holes in the ability to create and deploy a successful DAPP. Specifically, the ability for end-users to seamlessly and securely acquire data from the blockchain presented itself as an immediate obstacle to adoption. Therefore, our mission at MIMIR was to solve the obvious infrastructure problem to make blockchain more accessible to everyone, including users of off-chain, edge-connected devices. We have gone to lengths to educate the general public, establish credibility, and form invaluable partnerships wherever applicable.
Not many people really understand the unique strengths and weaknesses of the blockchain security model, or when and how to leverage it effectively. It is our goal to change this.
Yes, but at the same time, there are numerous internet and database security companies out there and their services improve year after year. What should companies ask themselves if they are thinking about implementing a blockchain solution rather than today’s alternatives?
Before answering, we wanted to dispel a certain myth about blockchain technology. It isn’t a silver bullet. This technology won’t fully replace most information security systems, but it can greatly improve security and efficiency for certain mission-critical systems. There are many potential costs to consider including the limited throughput of most blockchain systems, and the limited availability of skilled blockchain developers. A quick litmus test for whether an information system really needs blockchain might be (1) is it handling mission critical information, (2) do the rules around modifying this information need to be strictly enforced, and (3) can you afford relatively low throughput for these modifications? If you didn’t answer yes to all three, there are probably better alternatives.
As a valuation firm, one of the focal points of our work is to isolate key performance indicators of a business to determine future performance and risk. One of the difficulties we have seen is that people often conflate cryptocurrency with DAPPs, with blockchain technology, with computer stuff. In addition, the categorization of blockchain technologies is still quite elementary — unless you know the industry, it is hard to understand the competitive landscape. Can you please describe how value is generated in the industry and, more specifically, by MIMIR?
One of the critical discrepancies we often note when discussing blockchain technology, and specifically its application in cryptocurrencies, is that tokens/coins themselves do not generate value. Just like a security, the underlying assets generate value. Ultimately, just as Apple stock is determined by the performance of Apple’s assets, a token or coin’s value is determined by their respective assets (if you discount some of the more behavioral based trading).
We consider ourselves a middle-ware company that adds a second layer of security to enable companies to develop DAPPs and implement them for your everyday end-user. Our mission is to build a DAPP interface to improve the security and scalability of interactions with blockchain services from resource-constrained environments. Today, there are approximately 30 million Ethereum accounts but only about 30,000 nodes serving those accounts (we note that the figures presented include multiple account ownership as well as smart contracts). This illustrates the huge discrepancy between the number of users directly interacting with the blockchain and those using third-party services.
Our system acts as a decentralized blockchain API and content-distribution network, connecting end-users with those who can serve the information they need. We will pay individuals to host blockchain data and supply it via specialized security protocols. The individuals that supply and secure the data buy into our platform via the B2i tokens (written as an Ethereum smart contract), which also acts as a contractual agreement between MIMIR and the individual. Individuals will only be able to ‘work’ up to an amount commensurate with the tokens they secured as collateral. If said individual attempts anything malicious, the collateral can be revoked and redistributed to honest parties.
Finally, in terms of categorization, you are correct in terms of the difficulty given the plethora of facts and fiction out there about the blockchain ecosystem. There are current projects aiming to figure out categorization. We recommend reviewing Tech Crunch’s classification framework as an example.
Touching more on the topic of value drivers, can these technologies contribute to an enhanced bottom line? How can companies utilize blockchain technology to improve operational efficiency?
We are positioned to capitalize on the rapid expansion expected in the DAPP industry. As the industry matures, we expect for specific applications to be developed that can enhance value. The key driver of value for this industry will be the ability for users to acquire the right information and secure it as well. Specifically, there will be large growth in IoT based devices, Decentralized Applications, and secure platforms needed for a digital identity. All of these could benefit greatly from blockchain technology, most importantly infrastructure.
Another example can be found in industries with complex supply chains. For example, let us assume an aeronautical products company like Airbus. Given the specialized requirements for each of the components that goes into building an airplane, they must be sourced from all over the world. The length of time it takes to build and ship components, risk in transporting the components, and order of units received will all play into how quickly a company can build their airplane. Also, this information goes into planning for the project, such as hiring the necessary number of workers and other financing decisions. This is a scenario where the accuracy and auditability of information is paramount, and the latency of a blockchain is inconsequential. Given the number of moving parts, the inherent fault-tolerance of blockchain data stores is a plus too. This has applicability to many global industries.
Taking a step back, could you explain how and why blockchain technology is the future? There can so much buzz about new technologies that it becomes difficult to isolate true disruptive potential from ephemeral investment fads.
In a world facing greater digital identity security needs, we believe that the blockchain technology offers enormous upside. This not going to happen soon given the lack of infrastructure (as well as security of that infrastructure). That is why this has become our primary focus to help create this “Netscape moment” — opportunity that brings about massive adoption through better user experience. Our goal is to help facilitate this Cambrian explosion of new Decentralized Applications, by providing the necessary tools and infrastructure needed.
To say it another way, we can relate this next technological wave to the advent of the internet. Initially, the internet was not as useful for commerce because you could not trust the other party. The advent of HTTPS added an extra layer of security. You could now securely verify the identities of the entities you interact with online. If the entity was reputable, you could choose to trust the information it gave you. Blockchain technology is the next step in the process. Where HTTPS allowed you to verify the identity of an entity, blockchains allow you to verify the state of a system. If we imagine a digital chess board, HTTPS can tell you who you are playing with, and blockchain can tell you where the pieces are.
Using another example, in Healthcare there is a known gap in electronic medical records and their ability to communicate with software across other clinics. If a patient wants to track their own records, it is a nearly impossible task to first aggregate the information and then store it for future use. Furthermore, these records are a form of intellectual property, but the value may not be fully realized given the information is often disorganized and incomplete. Adding a blockchain service to verify and secure this information would save time and hassle for both patients and businesses.
We are certainly looking forward to the vast possibility of blockchain infrastructure to be used in facilitating secure growth across industries. Some industries we are particularly excited about include: advertising, fintech, compliance, auto, voting, P2P markets, and more. Collectively it’s the vast potential for the use of blockchain infrastructure that MIMIR is excited to be a part of.
Mustafa and Forrest, thanks again for taking the time out of your schedule to talk with us. It was great to hear your insight into an early but rapidly growing field.
Chief Technology Officer
MIMIR Blockchain Solutions
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