Riggs Eckelberry, the CEO of OriginClear Inc., an oil and gas industry technology licensing firm, recently published a post on Forbes in which he revealed that his company is developing its own cryptocurrency.
In order to help his firm’s shareholders better understand cryptocurrencies and blockchain, Eckleberry used a “hypothetical” example called “Beyond Uber” which explains how these new technologies work.
The former president at CyberDefender Corporation, a cybersecurity software development company, noted that Uber disrupted the taxi industry by allowing users to easily book rides using their smartphones as its app utilizes “smart data systems for dispatch.”
Because of its innovative technology, Uber’s operations expanded considerably and to prevent its “monopoly” from becoming “vulnerable”, the ride hailing service decentralized its business model, Eckelberry wrote.
Uber Is Now A "Verb"
He then explained how Uber’s business operations have changed:
Uber decentralized the model by enabling anyone to get into the business, and Uber became a verb. Now we don’t grab a cab to the airport, we don’t drive and park, we don’t rent a car; we Uber, because it’s cheaper and easier.
However, Uber drivers do not earn much because a 20-minute ride costs only around $5 - Eckleberry noted. While this may be great for people using Uber for transportation, the drivers have to manage their expenses on very low wages.
Meanwhile, Uber - as a company - appears to be doing quite well as it’s valued at approximately $72 billion and all it seems to have done is provide a simple platform where users can book rides - Eckleberry wrote.
The OriginClear CEO then suggested using distributed decentralized applications (DApps) for each function, or operation, that Uber currently performs. He recommended there could be an independent DApp for “licensing” and other autonomous DApps for conducting background checks, verifying insurance claims, and for “bonding.”
DApp Creators Would Be "Certified Vendors"
Eckleberry also explained that his decentralized model for ride sharing would require that each DApp be launched by a “certified vendor.” This type of model would allow for the “driver to appear on the network as ‘available’ … [without any] human intervention.”
The official member of Forbes Los Angeles Business Council further noted that a DApp-powered and blockchain-based ride booking platform would eliminate the middleman who takes “huge slices of the profits.”
This way, the drivers and the customers would be directly connected to what Eckleberry described as “the RIDE network.” In order to conduct financial transactions on this decentralized network, the entrepreneur suggested that a cryptocurrency-based RIDE coin wallet be used.
Although Eckleberry acknowledged that his idea is “perhaps” a “fantasy”, he does seem to have a better understanding of how a proper blockchain-based network is implemented (compared to most).
Blockchain Only Stores "Pointers" To Data
He explained how the autonomous distributed ledger technology (DLT) platform would work as follows: “Blockchain … in this case … [is] really just a public registry. Each record [or entry] on [its distributed ledger would be a] single line with a pointer — it points to information” accessible through an external database, or even spreadsheet.
Eckleberry then gave a working example, or scenario, of how this type of design would actually work. He noted that “if you had somebody calling for a ride, that might be a blockchain entry that would be broadcast on the network. Blockchain manages the transactions and makes RIDE smart.”
While many crypto industry professionals, such as crowdfunding platform founder, Republic CEO, Kendrick Nguyen, believe similar use cases for blockchain may be effective, there might be a major potential drawback in Eckleberry’s proposed DApp-powered ride sharing model.
"Human Intervention" Required "To Scale"
His proposed model would not be completely autonomous because it would still require human intervention, or involvement - which he explained would be required because the system’s network still needs the appropriate “technology and engineering to scale to a point where [it could] run autonomously … [such as] the right infrastructure and security,”
In general, human intervention cannot be removed completely from almost every conceivable type of business activity. Delegated proof-of-stake (PoS) based cryptocurrency platforms such as EOS - which launched its mainnet this summer - has encountered numerous problems already.
As CryptoGlobe reported in June, the top 1.6% or EOS holders own 90% of the crypto’s coin supply. While these figures may have changed since then, EOS has several other issues because it still requires a significant amount of human intervention.
Also as CryptoGlobe covered, EOS block producers (BPs) - which are only 21 transaction validators - had reportedly been “colluding” as they had been engaging in “mutual voting” and had been receiving regular “payoffs.”
Same Problem All Over Again
Notably Eckleberry’s DApp-based ride sharing model requires:
a RIDE … [or an] ‘entity’ [that] would receive micropayments on each transaction, maybe a fraction of a penny, because they wouldn't be doing anything except the development and marketing of RIDE. Properly designed, it would simply run on its own. The vendors providing those DApps would have to buy in, of course.
Based on this type of design, it’s possible that the DApp vendors might begin to collude like EOS BPs are believed to have and “the RIDE issuer” could begin to create the same “protected monopoly” as we now see with Uber.