Where the Fishermen Ain't -- Phil Gomes' Thoughts on PR, Social Media, and Blockchain Applications

Blockchain: Securing the Narrative

When I talk to people in the communications, marketing, and public relations fields about the relevant implications of blockchain technology, I ask them the question "What do you think you and your stakeholders could do with a single, permanent, shared and survivable version of digital truth?"

To be honest, this question scares nearly as many people as it excites, which is usually a very good sign of an imminent, important shift.

It then becomes necessary to connect the dots between cryptofinance and storytelling, the latter of which is a lot closer to communications professional’s skillset. This is not only essential for explaining the core concepts, but it helps someone open up to the communications possibilities for this technology and movement.

Transactions as Narratives

When Alice, with $15, gives $2 to Bob (with $5), his cash is raised to $7 while Alice’s is lowered to $13. Bob may now take $6 and buy a cheeseburger from Carol. Burger now in hand, Bob now has $1 remaining and, hopefully, a very full stomach until he somehow acquires more cash.

Financial transactions, even ones as simple as this, tell a story in which the beginning, middle, and end flow together to deliver an idea or evoke an emotion. Even a first-year MBA student should be able to look at an income statement or balance sheet, compare them to previous ones, and reverse-engineer some story about what happened to that company during the fiscal period in question. Was the company’s management more or less effective than its peers in spinning revenue out of assets? What could it mean when profit suffered from ballooning R&D expenses? Did larger inventory mean a failure of sales, or does it point to a cache of raw material amassed in shrewd preparation for anticipated orders?

So, inherently, to talk about transactions is to talk about interactionsーthe basis of any good story.

Not Open, But Secure

Now, in typical practice, such financial narratives are “secured” (in this sense, meaning “recorded, agreed-upon, and made relatively immutable”) by third parties, which include corporations, banks, regulators, clearinghouses, industry groups, auditors, and so on. Frustratingly, some of these intertwined groups keep their own separate ledgersーtheir “versions of truth”ーand periodically reconcile or “settle” them. Most of the time, at least we hope, all of these parties serve as a check-and-balance on each other, which is why we’ve grown to rely on them despite the creakiness of the whole process.

In other words, these transactional narratives were achieved in a largely proprietary environment but, on balance, are pretty secure, at least in the sense that the parties involved have relatively high confidence that they know who gave what to whom, who holds how much, and for what period of time.

Open, But Not Secure

In the meantime, so much in digital media and communications, and the narratives told within, is almost infinitely malleable. When editors and publishers were no longer the gatekeepers to participating meaningfully in this ecosystem, we gained spectacular and vitally important levels of freedom while ascribing a bit less value to the perceived security that an established publishing brand provides. (A number of blogs and communities I follow, for example, have proven a bit more informative and reliable than some credentialed outlets, who sometimes appear to use such sites as tipsheets anyway.) This level of freedom has resulted in digital truth that is more or less negotiable, as anyone who has ever A/B-tested the handling of a current news item between Brietbart.Com (a right-wing news site) and ThinkProgress.Org (a leftward one) might experience.

Here, participation in the narrative is open and free (as in speech and, only a little less often, beer), however, it is not necessarily secure. If you have ever seen a published item on the web change over time (due to sinister intent, SEO jockeying, embarrassment over a mistake, or plain ol’ carelessness) you’ve witnessed this lack of security firsthand.

Then bitcoin came along, as well as the innovative blockchain technology that records these transactions, encasing them deeply in the digital amber of cryptography. This has, relatively speaking, introduced the world to the concept of digital permanence.

Moving Toward Digital Truth

Given all that, it makes sense to approach blockchain technology as inherently astorytelling one, with one block inextricably linked to the next, forming a secure narrative that can be both open and secure.

What might communicators expect in such an environment? I don’t pretend to have the precise technical answer, but it seems that the critical components for secure digital storytelling are already in place. Since the curb separating blockchain technology and the future-state of the communications trade is eroding rapidly, I can make a few predictions:

Emerging Social Networking Concepts May Show the Way: Various distributed social network projects have emerged (e.g. Twister, Yours, Steemit), focused on blunting censorship attempts (even by network creators) and/or exploring alternative economic models. Blockchain-related projects like OpenReputation and its commercial component, The World Table, seek to create a quantified reputation system. All of this adds up to the idea of a Web that holds trust, reputation, and verifiability at its centerーwhere cryptocurrency concepts and effective communications intersect.

The Classic "Prisoner's Dilemma": One of the most exciting non-financial applications for blockchain technology is in the supply chain space (e.g., EverLedger, Provenance.Org, Chronicled, SKUchain, etc.). It's quite right to ask why a large enterprise would, say, willingly encode proof-of-provenance information on a blockchain (or anywhere) and, as a further step, maybe make some of that information highly available. I predict that, in two-to-four years, consumers' demands to know the story behind what they are buying/eating will get to the point where one major player in a group of companies within a high-profile industry is going to “blink.” Consumers will be made to care about the concept of digital permanence because it will be the only practical way to achieve this goal.

“Blockchain Technology Makes Consortia Cool Again”: Dynamo’s Santosh Sankar made this claim during the Distributed:Trade conference in St. Louis last month, and I believe him. To make up the brand-trust gap in the scenario above, competitors will either follow the first-mover or, perhaps more interestingly, propose a consortium. This is an incredibly powerful concept: Imagine if a group of industry participants, independent auditors, and even NGOs collectively maintained a distributed ledger that formed the basis for communicating some kind of social-responsibility-significant narrative. It seems to me that such a group can still get pretty far with consumers and other stakeholders while still stopping well short of divulging proprietary information.

This brings us to the last point...

Making Good on the Promise of Self-Regulation: In the U.S., as elsewhere, we run the country based on rules and statutes written to restrain early-20th-century robber barons captains of industry. When these regulations fail, even when they are poorly conceived by their authors in a “do-something” panic, the default remedy is typically more regulation by the same body of authors. While it’s a lot of fun to theorize whether a HealthSouth-, Enron-, Worldcom- or Satyam-level scandal could have been arrested early or even prevented had blockchain technology been in widespread use, the fact is that a blockchain-based approach helps move the concept of effective self-regulation from trade-association hobbyhorse to actual possibility.

Obviously, using a blockchain doesn’t auto-magically mitigate fraud any more than a corporate blog delivers “transparency.” It does, however, hold the possibility of making it economically or practically infeasible to commit fraud and lie to stakeholders. Really, doing so would be just way too much work, whether the tool to engage in malfeasance is brute computational force or a carefully crafted Russian nesting doll of falsehoods.

Storytelling is the communications trade’s mandate and purpose. Too often, we’re satisfied with telling stories that are, at best, ephemeralーa brand promotion here, a crisis response there. The advent of blockchain technology will (or, rather, should) force us to think in terms of longer horizons for “tomorrow” and far greater consequences for “now.”

(Article cross-posted to Medium. Image credit:Yuri Samoilov; CC BY)

"Whaddya Think Of Blockchains Now, Gomes?"

So, I suppose this was inevitable. The mainstream press, joined by the odd technology publication that really ought to know better, has been quick to chronicle the impending death of bitcoin with an odd level of told-ya-so triumphalism. With it, you have plenty of FUD around blockchain technology or even the distributed ledger concept itself.

The triggering event for this latest sustained wave of negativism (and we have seen a few) started when noted bitcoin developer Mike Hearn gave his rage-quit to The New York Times as an exclusive, rather than just posting it to Medium like it seems everyone else is supposed to do these days. The article was brilliantly timed for maximum effect alongside a Brookings Institute panel on distributed ledger technology, where Hearn’s new bosses at the R3 consortium made absolutely sure that everyone knew about the NYT piece.

Then, scaling issues that have resulted in protracted confirmation times for bitcoin transactions have further shaken the digerati’s faith in not only bitcoin, but the entire category of distributed ledgers and even the process of how open-source software gets made.

Noting my longtime interest in blockchain technology and my public encouragement of the PR industry to take this overall trend seriously, the emails and IMs have already started coming in. I can only guess as to the motivations, but they include notes like “Now what do you have to say about this?” or, perhaps channeling Jeff Bezos, simply “?”

So, let me outline three important things you should know about the the relative impact of the recent coverage over the past month or so.  

“Bitcoin” is not “blockchain.”

Bitcoin may deservedly be the pre-emptive metaphor for blockchain technology, but it is by no means its only use case. Whether you’re deploying on a public blockchain, a permissioned one, or a hybrid of the two (there’s room for all approaches), there are plenty of ways to apply this technology—bitcoin was merely the first. Personally, I’ve been a big fan of the potential for Ethereum for some time now (long before its recent rally) as well as the exciting projects that it inspires.

This conflation is easy enough to do by accident, of course, but I also suspect that just as much of it is willful. There’s some media advantage to be had in reassuring people that fundamental changes in technology and society are just a fad and focusing on bitcoin’s issues is one way to try and dismiss blockchain concepts altogether. It’s an easy way to avoid addressing the issues at hand, while pretending to sound like “the adult in the room.” Hell, Paul Krugman has made a career out of it.

True peer-to-peer is the real trend.

Underlying all of this energy around blockchain technology and cryptocurrencies is a move to a digital world that is either truly peer-to-peer or, in any event, lacking in hierarchies the way people are used to understanding them. Understanding how blockchain technology works is the most useful and practical way to keep abreast of this trend.

In the rush to amplify and exaggerate bitcoin’s problems, people are less able or willing to grok these changes. This will be unfortunate, because the move to true peer-to-peer will survive any cryptocurrency and will likely require a blockchain as part of its software stack. For his part, Ryan X. Charles continues to stand behind bitcoin as the foundation for his DATT project and has an excellent argument for doing so.  

Most folks are seeing the open-source sausage get made for the first time.

None of the drama surrounding bitcoin should come as a surprise to anyone who has paid even cursory attention to the open-source movement. If bitcoin’s troubles were your first introduction to how debates in this community take place, I apologize on behalf of open-source enthusiasts everywhere. I also say, “Welcome!”

You don’t have to follow open-source community closely to acknowledge that you rely on open-source software every day, from the supercomputer that crunched the aerodynamic profile of the car you drove to work to the smartphone you may be using to read this article. Given all of that, I wonder if minds would change if more people followed any of the mailings lists for, say, Linux kernel development. Such communities are infamous for their flamewars, rage-quits, code forks, and good ol’ take-my-ball-and-go-home pouting.

Say what you want about this reality of open-source, but take comfort that at least so much of it takes place out in the open. Part of the miracle of open-source is that it has every reason to fly itself apart yet still manages to produce some of the world’s most reliable and stable software.

In other words, all of this is fairly normal and routine. The big difference is that “The Internet of Ideas” and “The Internet of Commerce” is becoming “The Internet of Money.” That changes things.

Image credit: Max Wolfe

My Explorations of Blockchain Technology, One Year In

(Versions of this piece originally ran on Medium and LinkedIn.)

As of today, I will have been writing about the promise of blockchain technology for corporate communications for exactly a year. I’m not a technologist, but I’m definitely tech-informed, passionate about open source, and I do know a thing or two about public relations, corporate communications, and reputation.

As I set out to write what has become the first draft of my industry’s explorations of this topic, I thought it best to do my thinking in public; Cunningham’s Law suggests a powerful, if humbling, paradigm for progress. Looking over the various pieces I’ve written, this anniversary marks a good opportunity to look at what I got right, what I got wrong, and what still shows some great promise.

“The Future of Trust is Decentralization” 

Since 2012, the [Edelman annual Trust Barometer survey] has pointed to “A Person Like Yourself” as among the most trusted individuals. Now, perhaps a new line of inquiry could be exploring the degree to which one might trust “Vast Numbers of People You Don’t Even Know and Might Even Hate If You Actually Met, United by Peer-to-Peer Technology.”

What I Got Right

This is the first time I started bringing cryptocurrency concepts into my writing. I also think that the article’s relationship to my employer’s renowned Trust Barometer study was not all that far-fetched, though I don’t anticipate Edelman will be asking future survey subjects about their trust in blockchains any time soon.

What Needs Work

Writing is the art of compression and, well, the description of how the bitcoin blockchain is maintained is mostly accurate… I guess.

A blockchain is a type of highly distributed transaction ledger that is (in the case of one such currency) maintained, verified and replicated through more than a thousand nodes across the global Internet as of this writing.

The “one such currency” wiggle language is due to a sensitivity that people back then (and now) link bitcoin to illegal activity. This doesn’t bother me as much as it once did and I probably made it too much of an issue then. This was a case of the PR guy suddenly asserting a bit too much control over the technology-and-open-source evangelist. When it came to exploring blockchain technology, it didn’t happen again.

“Blockchain, Inc.”

Public relations certainly had its teething issues while dealing with the advent of the Internet and, later, the social Web. Getting it to understand this highly transparent, massively distributed environment—and the movement that inspires it—will be full-on jaw surgery.

What I Got Right

I think I quoted people accurately. And the teething-to-jaw-surgery line was kind of cool. Maybe.

What Needs Work

Yes, I just damned myself with faint praise above. This is the one I wish I could just kind of scrap and/or rewrite. I conflated way too many ideas here, such as the notion of a distributed anonymous organization (DAO) and the far simpler ideas of company incorporation, notary, and that sort of thing. I should have just stuck with discussing the DAO concept.

It’s also nearly a third pullquotes. It’s like my Diver Down, the controversial Van Halen album that featured way more than its fair share of cover tunes.

“PR Must Lose Its Reliance on Hierarchy”

The evolutionary path that our industry has had trouble navigating is the seemingly simple one of moving from centralized todecentralized environments. Now, decentralized is flattening further to distributed, as we see with concepts like Bitcoin (for currency), OpenBazaar (commerce), Augur (prediction markets), Bitnation (DIY governance) and Ethereum (smart contracts and, perhaps at some point, a lot more).

What I Got Right

Having perhaps instinctively figured out that I swung-and-missed in the previous piece, I focused on what I actually know well—public relations and its tendency to comfort itself in understanding influence hierarchies. This is a common thread across all of my work, now going back twenty years.

Here, I managed to introduce people to core blockchain concepts, without actually throwing the term “blockchain” at the uninitiated until I referenced Fred Wilson of Union Square Ventures. This is a feature, rather than a bug, I think. The PR industry as a whole rarely accepts new concepts quickly or willingly until the merely possible becomes the well-past-inevitable. Here, the reader is eased more gracefully into the idea.

What Needs Work

That said, the link between “blockchain” and “decentralization” could have been explained a lot better, given the intended audience (PR professionals) who aren’t quite immersed in the concept. It kind of reads like “You think this is a far out idea? Just look at what Fred Wilson has to say!” In other words, the ending is a little too on-the-nose. I should have made that transition cleaner, even though the link to Reddit’s troubles at the time were necessary both in terms of timeliness and the audience’s frame of reference.

“Using the Blockchain and Smart Contracts for CSR”

As it becomes increasingly obvious that regulators cannot address the Internet Age with tools forged during the Great Depression, stakeholders may demand that the promise of self-regulation take the form of smart contracts.

What I Got Right

Whatever I got right here was wholly due to the selection of my collaborator,Sergey Nazarov of SmartContract.Com, who generously helped me stress-test the idea of digital contracts for corporate social responsibility. His contributions to the final paragraph, for example, get right to the point and summarize the thesis beautifully: "Companies that engage in CSR initiatives in this provable way can point to more than promises and vague numbers—they would have a clear and easily verifiable track record. They could show their investors, partners, regulators, employees and even customers conclusive proof of their commitment, in a format that all those parties would trust."

What Needs Work

Well, first off, there was some discussion between Sergey and I after the fact as to whether to post on Medium. Fixing that now, I suppose.

I still don’t think I quite nailed a company’s motivations for CSR-related smart contracts, here. That’s really on me since that topic falls into my field, not Sergey’s.

Imagining companies participating in something like this any time soon kind of reminds me of showing up to a meeting of a standards body on the first day and listening to all participants start with “Okay, you first…” at the same time.

That said, if companies are truly serious about self-regulation and the business-event records recorded on the blockchain can be assured by a quantity and quality of parties that stakeholders accept, then the McLuhanesque medium and message are both extremely powerful. All of the pieces are available today; it just takes a company with passionate stakeholders and a considerable amount of institutional will.

“Why I’m Focusing on Blockchain Applications for PR”

PR needs to figure out how to deal with hierarchy-averse environments—quickly. Far too many in our trade don’t know what to do with a media property that doesn’t have an editor-in-chief or a mailing address. So, imagine what happens when a reputation-significant online source or service exists merely as highly distributed software, perhaps even outside the control of its creators. That’s the world I want to be prepared for and help others to do the same.

What I Got Right

At this point, I needed to write a concrete statement of purpose and ask the question “Why does all this even matter?”

Of all of the pieces written, it was the most widely read, by a factor of two or three. I attribute this to two factors:

• Having thought about the blockchain concept publicly throughout the year, I was finally able to connect the dots better.
• I was able to show a simple use case by notarizing a PDF of the post.

To that last point, the folks behind Proof-of-Existence were very helpful in terms of letting me know what was possible (or, once executed, searchable) once I notarized the PDF of the piece on the bitcoin blockchain. Showing what was easily possible today without having to build something was essential to making the case.

What Needs Work

This is now on all of us in the communications marketing industry. We’re now presented with a new way of looking at the Internet and it’s one that most people in our profession are not going to be entirely comfortable with.

I say, “Get over it.” The stakes are now much higher than when we were infected with the childhood diseases of tilting up advertising billboards on Second Life islands and promoting ideas like (I grit my teeth as I write this) “the social media press release.” As I subtitled the third article listed above, “a truly peer-to-peer online environment will test how good we really are at what we do.” I welcome the challenge and embrace its possibilities. So should you.

Acknowledgements

In closing, I’d like to acknowledge some folks who have inspired me while writing the above articles, and whose work continues to reassure me that I’m not completely nuts:

• Manuel Aráoz: The developer of ProofOfExistence.Com, he was almost absurdly patient with my questions as I figured out how to use and evendescribe blockchain notary.
• Vitalik Buterin: For being so generous with his time as I was coming up to speed on his project, Ethereum.
• Sergey Nazarov: Founder of SmartContract.Com and my incredibly thoughtful collaborator on the CSR piece
• Luke Sully: Our discussion over lunch helped me understand the broader implications of blockchain technology, especially around the financial industry’s motivations to embrace a technology created to help topple it.
• Melanie Swan: Really. Just read her book.
• Susanne Tarkowski Tempelhof: Founder of one of the grandest visions in this area, Bitnation, she uniquely draws the through-line across the topics of technology, freedom, politics, governing systems, and history.
• Fred Wilson: Following his discussions of blockchain concepts really helps deliver a bigger picture on the use-cases and opportunities.

Looking forward to the next year.

Image Credit: Creativity103 (CC BY)

How Emerging Social Networks are Applying Economic Models to Attention and Content

(A version of this piece appeared on LinkedIn.)

One of the trends that I have been following involves how emerging social network experiments are applying economic models to determine how to surface and present user-generated content.

Here the term "economic" is very different from merely "money changing hands for paid amplification." At its very bottom, economics is the science of the choices you make and how you manage scarcity. In this instance, the scarce goods are 1) meaningful participation in a social network and 2) attention. Today, I'll offer three such ideas. 

 

DATT

Standing for "Decentralize All The Things," this is a project from Ryan X. Charles, a former Reddit employee who was originally hired to figure out Reddit's cryptocurrency strategy. It turns out that Reddit didn't need a cryptocurrency strategy as much as it perhaps thought it did, so out went Charles and the DATT concept was born. 

It was particularly good timing that all of this happened amid widespread dissatisfaction with Reddit's posture toward transparency and censorship. Charles imagines DATT as fully peer-to-peer, such that it would be difficult to censor content if someone--even DATT's developers--wanted to do so. Most interestingly, instead of merely "upvoting" content that you like, you would have to put your money where your mouse-clicks are... with small micro-fractions of bitcoin. (Keep in mind that, as of this writing, one bitcoin is worth US$370 and the minimum transferable unit is a "satoshi" or US$0.00000370.)

Obviously, it's easy to simply upvote something and even inspire some sizable number of like-button-minded people to do the same. Far fewer would pay money--even a tiny amount--to join such a mini-crusade. This makes for a higher-quality experience for everyone, in much the same way that prediction markets tend to match and eventually outperform polling. 

DATT is presently at the proof-of-concept stage and Charles is "seeking to find a technical co-founder who understands blockchain and web technologies." 

TARINGA!

Based in Argentina, the 75-million-member Taringa! social network shares its ad revenue with its top content-creating members. Each participant in the Taringa! Creadores program receives a bitcoin wallet from Xapo, where the money is transferred and the creators can buy from bitcoin-accepting merchants, exchange it for traditional currency, or tip other users on the site. 

In the first six months of the invite-only program, the site distributed $76,000 worth of bitcoin, with one participant receiving $2,000. Not surprisingly, Taringa! Creadores has had a strong effect on the site's growth while, according to Taringa!, keeping the quality of the content high. 

MINDS

One would imagine that any social network endorsed by the hacktivist collective Anonymous would have to be open-source, encrypted end-to-end, and fully dedicated to privacy. Minds is one such network. 

But what really makes it interesting is its economic model. From the site: "You earn a digital currency of points for every vote, comment, upload and share which can be exchanged directly for views on your content. ... These points can either be exchanged with Minds or directly p2p with other users in exchange for shares." Of course, points can be purchased as well. 

So what does this all tell us? 

Much of what we find valuable on the web has been built on the backs of unpaid volunteers, such as Wikipedia editors or the moderators of your favorite subreddit. Others are willing, consciously or otherwise, to give away personal data in order to access a useful service like Facebook. The various species of a "third way" as described above show that it could be easy and mutually beneficial for Internet users to accept greater control over their digital lives and truly be economic partners in the platforms that their attention helps build. The frictionless nature of cryptocurrency payments makes this possible in ways that more intermediary-reliant methods simply cannot. 

Also, in addition to earning one's access to a social media site via quality participation, Internet users might be able to supplement this personal fund by doing almost nothing at all. Innovations like the 21 computer might mean that media consumers might mine small amounts of their own bitcoin just to help support their media consumption habits, again, in a frictionless manner. 

The mainstream media has certainly learned volumes from social media in terms of how people seek out and share information. This new class of social networks, if even modestly successful, could show them a thing or two about monetizing content as well. 

Photo Credit: PhotoSteve101

Why I’m Focusing on Blockchain Applications for PR

I Suspect That Public Relations Largely Dismisses Blockchain Technology Because of Its Strong Association with Bitcoin. This is a Mistake.

In 2000 or so, I was introduced to the concept of the “weblog” by Dan Gillmor, then a columnist at the San Jose Mercury News. A new world opened up to me at a time when I was looking at my day-to-day work as a PR person in Silicon Valley and asking “Is this all there is?” In August 2001, I started blogging and writing about these and other developments. The rest of the story should be familiar to most of the people who read this; for everyone else, there’s LinkedIn. Suffice to say, it’s been an amazing time to be in this line of work.

Of course, a lot of innovation on the social web has happened since, to say nothing of the new and different ways companies continue to adapt, leverage, and at times struggle with it. However, granting at least one notable exception, very little has affected me in quite the way that my first personal discoveries of the social web did nearly a decade-and-a-half ago.

This is changing. As I continue to observe and engage with the community that is exploring blockchain-based concepts, I find this kernel of inspiration germinating once again. The signals are impossible to ignore and the possibilities for communications and community engagement are far too compelling.

Certainly, there are a lot of the usual signs:

• Venture capitalists are throwing money into this space.
• There’s an active enthusiast press.
• The business press has taken notice.
• Companies both small and large are doing interesting things.
• Global regulatory viewpoints are literally all over the map.
• We’ve seen a financial boom and bust that tracks against the Gartner Hype Cycle somewhat.
• There’s even the requisite amount of fear mongering.

All of this should be familiar territory: We saw it to roughly the same degree (though with considerably lower stakes) in the 2000s as the social web was coalescing.

So, why do I feel compelled to do explore blockchain applications for corporate communications now? There are five principal reasons:

• It’s Uncharted Territory for PR: As I’ve written earlier, PR needs to figure out how to deal with hierarchy-averse environments—quickly. Far too many in our trade don’t know what to do with a media property that doesn’t have an editor-in-chief or a mailing address. So, imagine what happens when a reputation-significant online source or service exists merely as highly distributed software, perhaps even outside the control of its creators. That’s the world I want to be prepared for and help others to do the same.
• It’s Where the Creativity Is: One cannot help but be in awe at what the communities who are building these technologies and applications are imagining and bringing to life.
• It Uniquely Addresses a Very Real Need: For any scenario that requires collusion-resistant verification, high levels of transparency, or a solid proof-of-performance, blockchain technology answers the challenge elegantly. The demands for corporate transparency are only going to increase and, now, companies have at least one tool that puts some real teeth in the oft-promised ideal of self-regulation.
• It Ticks All of the Right Boxes for Me: Open source? Voluntary collaboration? Peer-to-peer frameworks? Flummoxed government institutions? Consensus-driven approach? Corporate labs trying to make sense of it all? Everything about this screams “Phil.”
• The Advertising Industry Hasn’t Yet Figured Out a Way to Pollute It: I feel like somebody or a group of somebodies will make this all about who launches a new potato chip flavor on a blockchain first. I would consider that an abuse of the medium, especially at this stage. This is much bigger than that, and much bigger than social media was.

So what am I doing? At this early stage, I am:

• Walking the Walk: As a simple demonstration, the text of this post has been registered on the Bitcoin blockchain. The cryptographic summary of this text has been saved in PDF and submitted to ProofOfExistence.Com, where it has been notarized. There is now indelible proof that I published these thoughts today, no matter what happens to my blog, LinkedIn...or even ProofOfExistence.Com.
• Doing My Thinking In Public: As before, I’m writing. I’m thinking. Hard. Maybe years from now I’ll look about my early blockchain-related writings the way I now look at this impenetrably verbose stinker, but at least I’m investigating the possibilities. It’s Cunningham’s Law in action.
• Asking Questions of Smart People: I recently authored an article about smart contracts with the thoughtful and generous input of Sergey Nazarov, co-founder of SmartContract.Com. I’ve also been corresponding with Bitnation’s Susanne Tarkowski Tempelhof for some time now, discussing the broader issues of competitive governance, trustless verifiability, and individual freedom. I have a list of all the people I want to talk to across all different points of the value chain, from core development to commercialization. (If you think you should be on this list and would like to chat, you know where to find me. Coffee/drinks/nachos on me.)
• Sharing What I Know and Believe: Last week, I presented about bitcoin and blockchain technology for Edelman’s “Wisdom Wednesday” global internal education series. From what I can tell, it was well-received. At least one executive has expressed interest in receiving a briefing on this topic. Some of these efforts will undoubtedly spill into my public life at conferences and posts like this.

 Watch this space. I’m only going to be writing about this more often.

Photo Credit: Wikimedia Commons

Using the Blockchain and Smart Contracts for CSR

The Social Purpose Case for Using Bitcoin's Core Technology

(Sergey Nazarov, CEO and Co-Founder of SmartContract, contributed knowledge and insight to this post. Also available on LinkedIn.)

In public relations circles, corporate social responsibility (CSR) is often discussed in the narrow context of a communications discipline. However, its messages obviously ring hollow when they are not supported by action and accountability.

So, what if both the action and accountability were put in code, were made more or less automatic, and produced open, reliable, and indelible reporting? With the right company and no small amount of will, this is possible today--what some have called “code as law” rather than “code of law.”

As I’ve written in earlier posts, the promise for the blockchain or similar “cryptoledger” technologies is immense, stretching well beyond the maintenance of the highly distributed general ledger for cryptocurrencies like Bitcoin. I’ve lately been fascinated by the concept of so-called “smart contracts” (a digitized promise, in effect) and, in particular, how they might form a uniquely powerful foundation of hyper-transparent CSR.

The term “smart contracts” describes a distributed application that lives on a blockchain and can automate a business process. Thanks to the combination of peer-to-peer technology and open source, such a promise is public, survivable, and available for inspection. In other words, it’s the perfect platform for not only CSR communication but the actual activation and reporting of the entire CSR program’s initiatives.

By way of example, consider the following contract logic:

• IF the profitability of the firm is >[X]%, AND
• IF the firm's supply chain is certified by [insert reliable NGO here] as at least [Y]% fair trade, AND
• IF you are a holder of preferred stock as of [date], THEN
• Said shareholders will receive [$Z] per share in their electronic wallets within a day of the firm's quarterly earnings announcement.

The first condition establishes a minimum level of company performance that would trigger the special dividend. (Let’s not discount the value of profit and generating lots of it. A company must be able to invest in itself to survive.) The second condition establishes that a socially responsible goal has been achieved during the reporting period. The final condition is optional, but is intended to reward long-term investors who, in addition to seeking a return, supplied early capital by purchasing shares based on the promise of socially responsible investing.

Once the company and the NGO digitally “sign” the contract after the conditions are met for the quarter, the dividend is distributed automatically. For the sake of dispute resolution, one might even consider the additional condition of a third party’s signature (like an auditor’s), with the dividend triggered when at least two out of the three parties agree that the terms have been fulfilled. (Three parties should be enough to mitigate potential collusion for this particular contract, but could be a topic upon which reasonable folks might disagree. More parties could be added, of course.)

Why would a company do such a thing? To some degree, it’s an acceptance of the inevitable. As it becomes increasingly obvious that regulators cannot address the Internet Age with tools forged during the Great Depression, stakeholders may demand that the promise of self-regulation take the form of smart contracts. This approach also offers efficiency: Once set, the legal and accounting overhead required to run the smart contract is minimal if all parties agree to the dispute resolution mechanism.

Another point to consider: Tell shareholders that they won’t be getting their special dividend that quarter, and you have a very powerful group--above and beyond fair-trade activists--that will start asking a lot of questions about both social responsibility and managerial effectiveness. Such questions would include:

• Was profit missed because of a possibly vacant fair trade promise, made to the early investors who invested based on that pledge?
• More damningly, was profit maximized at the expense of fair trade procurement?
• Were there factors external to the smart contract, such as runaway expenses or executive pay?

The large upside of executing CSR agreements in the blockchain as described here is that everyone gets a highly trustworthy proof of performance, since the resources required to hack or corrupt a sufficiently well-supported blockchain are extreme. (It would take many times the combined computing power of the top 500 supercomputers to undo the Bitcoin blockchain, for example.) Companies that engage in CSR initiatives in this provable way can point to more than promises and vague numbers--they would have a clear and easily verifiable track record. They could show their investors, partners, regulators, employees and even customers conclusive proof of their commitment, in a format that all those parties would trust. This approach would make the impact of every CSR initiative far more meaningful.

Image: FutureAtlas.Com

PR Must Lose Its Reliance on Hierarchy

A Truly Peer-to-Peer Online Environment Will Test How Good We Really Are At What We Do

(To catch up, check out my previous pieces “Blockchain, Inc.” and “The Future of Trust is Decentralization.”)

I have been in the public relations field for nearly two decades. In retrospect, I’ve noticed that the most notable milestones during that time have had less to do with the evolution of the trade but, rather, moments that mark its sclerotic resistance to same. Most often, the problem lies with our industry’s reluctance to let go of comfortable, familiar hierarchies.

What does this mean? Changes in how programs and platforms use the Internet mean that, sooner than we think, meaningful hierarchies that communications professionals can reliably appeal to will be rare. Companies whose success in communications and reputation management largely depends on mastering those hierarchies will find themselves somewhat adrift.

By way of example, here are some representative, on-the-ground, quasi-hypothetical stories that describe three mini-epochs in our trade during that time:

Late 1990s: Executive suite calls, freaking out about a story on the website for The Chicago Herald-Investigator-Review-Argus-Gazette. PR person contacts reporter. Mutual stubbornness escalates the issue to the associate editor who, in turn, brings the issue to a managing editor and editor-in-chief. Factual errors are corrected and (far less often) perceived undue weight or misunderstandings of context are addressed. Executive suite says something like, “Well, thank God! It least it wasn’t in the print edition!”

Early-to-Mid-2000s: Product manager calls, freaking out about commenters in a blog post on WayTooMuchTech.Com. The tone of some of the comments is abusive and even involve potential invasions of an employee’s privacy. Many of these are from known trolls. PR person talks to blogger who, understanding the impact of these trolls, bans them and hides their comments. It’s a good thing, too -- what if the blogger agreed with the trolls? How would you address it?

Late-2000s-to-Early-2010s: Chief-of-Staff calls, freaking out about the Wikipedia article about the company’s CEO. PR person (who keeps up with such things) encourages discussion with Wikipedia volunteers. Chief-of-Staff asks “Can’t you just call Jimmy Wales?” PR person says it doesn’t work that way since Wales, though a co-founder, does not wield that many more privileges on the system than the average user and, besides, concerns himself with many other things these days. “How about donating to the Wikimedia Foundation?” No. And, so, Talk-page discussions with Wikipedia volunteer editors and admins ensue. Article gets adjusted closer to neutral (if slightly, and with any luck) after some amount of debate, discussion, Kafka-esque rule-quoting, and strong suspicion of motive.

See what’s happening? At each step, the hierarchies that the company representative could appeal to in order to ensure representation of the company’s point of view have flattened. Every single time, the public relations industry has exhibited rather public and highly embarrassing teething issues.

This particular pendulum isn’t going to swing back. In fact, it has a lot further yet to go. Take a look at how engineer Paul Baran (1926 - 2011) described the progressive topography of networks:

 

As described in the three stories above, the evolutionary path that our industry has had trouble navigating is the seemingly simple one of moving from centralized to decentralized environments. Now, decentralized is flattening further to distributed, as we see with concepts like Bitcoin (for currency), OpenBazaar (commerce), Augur (prediction markets), Bitnation (DIY governance) and Ethereum (smart contracts and, perhaps at some point, a lot more).

Think this has nothing to do with public relations or media? The recent set of dustups at Reddit are instructive, particularly regarding the controversial dismissal of its popular communications director. This resulted in administrators and moderators shutting down entire sections of the site in protest.

As venture capitalist Fred Wilson of Union Square Ventures said (emphasis mine):

We have also wondered what the first killer app of the blockchain is going to be. Is it going to be personal finance (bitcoin), is it going to be peer to peer connectivity (mesh networking), or is it going to be something else?

There’s a chance that the answer to the struggle that Reddit is going through will also answer this question. It may be that there is no viable middle ground between a centrally controlled media platform and an entirely decentralized media platform. You are either going to police the site or you are going to build something that cannot be policed even if you want to.

Is your organization prepared for such an environment? Is your team? Are your executives sufficiently briefed on the realities of a reputation environment where you probably can’t buy, sue, or “cute” your way to success?

As to what it may take to succeed as we move from decentralized to distributed influence environments, here are a few initial recommendations:

• You may need a really good programmer: Projects like OpenBazaar and Augur send the faint signal that we could be moving away from destinations and properties on the Internet as the first-order variable for digital PR. More fundamentally, communicators may have to understand the basics of distributed programs and protocols. It’s therefore not inconceivable that ensuring fair representation of your organization will have just as much to do with bringing on a skilled programmer as it does hiring a savvy media strategist.

• Uncertainty is a feature, not a bug: Skilled, experienced musicians, athletes, actors and other performers will tell you that they will always feel nervous just before going on stage. This means that they still care about their craft. You should feel the same, but use this anxiety as a source of inspiration rather than an excuse to stand still.

• Get your hands dirty: Since my early days in technology PR, it has always astounded me how many practitioners who reach a certain level of seniority start to believe that they are above understanding important details of the technology they promote. If you want to start seeing around corners, consider attending hacking meetups or participating in the sites that the world’s makers use. In my experience, it’s the rare one that will reject you for thinking that “garbage collection” is only the thing that happens on Tuesdays with the big truck. A sincere desire to understand a concept or movement, beyond the specific and immediate needs of a client or practice, is usually the price of admission.

• In the end, all you have is your ability to persuade: When you strip away the more blunt tools and worn concepts of our trade, you’re left with the core of what we are tasked to do--make a case and persuade an audience.

As you can tell from this essay and my previous writings, I am unapologetic in my enthusiasm for the emergence of truly distributed environments, and passionate about exploring what this means for public relations. In the next few years, we will know as a trade whether our industry’s talk and reassurances about its ability to innovate and adapt was a sincere call-to-action or just, well, spin.

(Banner image by Flickr user frankleleon, CC BY. Network topology picture via NetworkCultures.Org.)

Teaching for Kent State's Online Master's Program

(Above: My home office. L-R: Korean-made Gibson Explorer knockoff purchased by my Dad for my fourteenth birthday in the basement of an athletic shoe store in Cascais, Portugal; Bobby Rattlehead in pre-Halloween storage; custom Peavey Tracer with rendering of the banned flyer from my college radio show)

I'm proud to say that, starting the week before Halloween, I will be delivering unto this world probably one of the scariest things imaginable:

In addition to my Edelman duties, I will be teaching an online master's-level course for Kent State about PR and digital communities.

Basically, this is the closest I've yet come in terms of building the kind of overview course on this topic that I've always had in my head. It will be an exploration of online communities in all of their "best, worst, and, above all, most vital forms" to quote Katie Hafner's wonderful story about The WELL. (A required reading in the first week.)

Rather than treating online communities as a relatively sanitized place that will enable you to sell lots of t-shirts, this will be an attempt to look at these communities in a way that marketers, leaders, reputation managers, and many other audiences can build upon and adapt as they like.

Seven weeks will certainly test the art of compression, during which time I will throw everything at my poor learners from state-of-the-art analyses to seventy-year-old treatises from Austrian economists.

Many thanks to Bill Sledzik at Kent State for reaching out to me, and to the university for allowing me a remarkable amount of latitude my first time out.

Blockchain, Inc.

 

Over at LinkedIn and Edelman.Com, I have a piece about blockchains and distributed autonomous corporations:

Public relations certainly had its teething issues while dealing with the advent of the Internet and, later, the social Web. Getting it to understand this highly transparent, massively distributed environment – and the movement that inspires it – will be full-on jaw surgery. Bitcoin, or any of the efforts mentioned above, may or may not flame out spectacularly, but the blockchain is here to stay.

Photo Credit: Marc Smith

The Future of Trust is Decentralization

My latest post at Edelman.Com manages to somehow tie together the firm's annual Trust Barometer, cryptocurrencies, and my current favorite open-source project, Twister.

Since 2012, the Trust Barometer has pointed to “A Person Like Yourself” as among the most trusted individuals. Now, perhaps a new line of inquiry could be exploring the degree to which one might trust “Vast Numbers of People You Don’t Even Know and Might Even Hate If You Actually Met, United by Peer-to-Peer Technology.”

(Okay. Bear with me. I’m still working on the name and the above seriously struggles for an acronym.)

Sound outlandish? Technology is making the latter increasingly more trustworthy. 

More over at the day job.