The document outlines nine essential building blocks required for a sustainable blockchain industry, including cross-chain bridges, effective governance, and usable security. It highlights the need for clear roles and responsibilities, identity verification, and the establishment of stable tokens to mitigate market volatility. Additionally, it addresses the challenges of decentralization, regulatory environments, and the ecological sustainability of blockchain processing.

1. 9 BUILDING BLOCKS
FOR SUCCESS
What’s required for a sustainable
blockchain industry
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2. 1. Cross-Chain Bridges
2. On / Off Ramps
3. Roles & Responsibilities
4. Identity
5. Reputation
6. Effective Governance
7. Stable token of exchange
8. Useable Security
9. Economically Viable Processing

3. • Growing ecosystem of blockchain‘S’
• Made up of both increasingly specialised
private blockchains designed for enterprise
grade solutions and customisations
• Or Sidechains off core bitcoin blockchain
protocol but that link in parallel
• Promises blend of private / public chains
• Need for ease of ‘cross-chain’ calls
1. Bridges

4. 2. On / Off Ramps
• Regulation highly localised / emotionally led (fear
of crypto / Bitcoin in particular)
• Encourages blockchains to start as decentralized
as possible then localise pragmatically
• Leverage friendly jurisdictions with history in
innovative financial services industries (e.g. Isle of
Man)
• Big opportunity for locales that move first to
become epicentre of physical economy

5. 3. Roles & Responsibilities
• No clear successful business models for
decentralized economy as yet
• If you don’t own code or data how do you
make money in a way you can protect?
• Ethical and legal requirement for clear
definitions and responsibilities
• Watch out for legal precedents and landmark
prosecutions that define space

6. 4. Identity
• Semi / Pseudo Anonymity as current basis of
blockchain is limiting for commercial use without
some linkage into real world
• Especially legal requirements like KYC (Know Your
Customer) #Finserv
• Identification currently a duplication-of-work for
blockchain start-ups
• ID with real world verification for people and
possessions a must
• As well as universal ID for DApps login

7. 5. Reputation
• Reputation in a ‘trust-less’ marketplace is a challenge
• Need strong incentives and disincentives for behaviour.
• Currently reputations siloed (best e.g. Dark markets)
• Questions around Smart Contracts & their real world
enforcement
• Universal reputation; individuals and collectives of
individuals beyond specific purpose
• White-listing (building trust networks) vs. black-listing
is central debate

8. 5. Governance
• Who drives core development of base layers such as
Ethereum or Bitcoin Blockchain and to what agenda?
• How is this financed and what transparency is offered?
• Balancing serving libertarian vs. commercial agendas
challenging
• How is core development aligned with niche vertical
interests and trade-offs
• Is there a role for est. trade organisations to lead dev of
industry side-chain
• Untangling Bitcoin 1% interests and broader more
diverse ecosystem

9. 6. Stable Token of Exchange
• 99% of Bitcoins are in the hands of 1% of people
making vulnerable to market manipulation
• Bitcoins exchanged largely for exchange itself
rather than utility. Increasingly so by VCs and
traders
• Price volatility exposes merchants treasuries to
too much risk to make viable means of exchange
• Need tokens that can be pegged to currency of
business costs at point of transaction

10. 7. Usable Security
• Basic tech is extremely secure but history is riddled with
hacks & theft
• Why? Largely centralisation. If Bitcoin exchange stores
private keys its Bitcoin addresses in a badly secured
database server bad actor obtains access to this server,
they can steal the Bitcoin funds.
• The weakest links are in the technologies surrounding the
blockchain and the people using them.
• Encrypting all interactions between components and
actors, and handling the encryption keys in a secure way.
• We expect to see more user-friendly security principles.
E.g. two-factor authentication, multisig transactions and
hardware cold storage wallets etc. will become more
mainstream.

11. 9. ECONOMICALLY VIABLE PROCESSING
• Economics of Bitcoin mining only make sense at a centralised
industrial scale
• Which is in direct opposition to Bitcoins algorithm which seeks
to cancel out these efficiencies
• In other words its deliberately wasteful. Which is unsustainable
both from a financial and ecological perspective.
• Pressure to reduce costs and increase output could result in
sweat shops.
• Possible solutions; 21s putting mining into everyday devices,
tapping into existing latent processing networks such as
gaming or replacing with P2P distributed systems of users

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