The blockchain white paper is becoming the lingua franca of new ventures. These are usually PDFs littered with more economics principles than a college textbook and frequently illustrated with flow charts.  

As in our previous look at some of the more offbeat white papers in circulation, what’s striking is how these proposals offer revealing glimpses of blockchain’s potential as well as its potential pitfalls. This time around we’re also including a crypto business that lacks a white paper but has a FAQ section on its website that gets at the simplicity of blockchain’s benefits, and the present-day complexity of their execution. Lust on the Blockchain

Sex sells, and even Playboy is working with Global Blockchain Technologies to provide (additional) incentives for users to watch online video content. Now is proposing an (ahem) end-to-end blockchain payment solution, designed for and by the adult entertainment industry.”

What it is: A payments network that provides secure anonymous transactions, letting consumers breathe easy that their online pornography purchases won’t show up on credit card statements. It also includes mechanisms for reputation ratings to help prevent fraud, as well as verification of age and health (sexually transmitted disease status).

Blockchain-friendly quote: “Intimate will publish its code of conduct in the genesis block of the deployed chain, which will contain ethical rules for intimate users.”

What might work: “The adult industry has historically been a catalyst for expanding the demand for and knowledge of new technology and media,” the white paper declares, and that’s true. The popularity of home video and the internet got big boosts from the pornography industry. And as with cannabis-friendly cryptocurrencies, traditional financial institutions often are leery of working with the sector. Intimate also has already secured relationships with a number of “major adult companies” including Badoink, MojoHost and Lucas Entertainment, according to this release.

What might not: Submitting a picture ID to an “oracle” to prove you’re of age represents a leap of faith in a trustless world. Also, “intimate bootstrap incentivization” sounds like a service provided by one of Intimate’s customers.

Jargon overload: “Transaction fees are burned to build reputational capital for the parties involved in a transaction.”

Truth in advertising: “Clients do not want to volunteer information or payment details that could be used to expose them so it is difficult to establish trust.” Serving Up Crypto Spirits

What it is: A cryptocurrency-only online wine and spirits store. Prices are listed in dollars (a 750milliliter bottle of 25-year single barrel Balvenie whisky is listed at $498.87), but the site only accepts cryptocurrencies: bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and litecoin (LTC), to be precise. This is a business without a white paper, but who can resist the lure of mixing booze with bitcoin?

Blockchain-friendly quote: “Don’t HODL, buy a bottle! Remember to drink responsibly, don’t get REKT.” Token humor never gets old.

What might work: The website claims that by factoring out the transaction costs and fraud associated with accepting credit cards, it’s possible to offer lower prices to consumers. (That bottle of Balvenie is, in fact, significantly cheaper than current prices on a traditional online spirits site).

What might not: While the blockchain may ultimately lead to privacy advocates’ oft-voiced dream of providing independently verified proof-of-age without divulging other personal information, present-day shipping requirements mean that an adult over 21 must sign for deliveries.

Jargon overload: “Clicking [the place order button] will take you to coinbase commerce with a 15-minute window to complete the transaction. Please make sure you copy the exact currency amount and send address. Once the transaction is confirmed you can click the button to return to our site.”

Truth in advertising: “Due to alcohol shipping laws we currently do not ship to the following states: Alabama, Alaska, Arkansas, Delaware, Kentucky, Mississippi, New Hampshire, Oklahoma, Pennsylvania, Rhode Island. South Dakota, Texas, Utah and Vermont.”

HoweyCoins: Getting Taken for a Ride

What it is: A “universal medium of exchange for travel that will drive down costs,” according to its white paper, which also says that use of its token “is guaranteed to lead to higher valuations.”

Blockchain-friendly quote: “Cryptocurrencies and initial coin offerings are upending this monetary system and democratizing money for you and me… There will be no costs to you and hidden profits to banks and governments.”

What might work: While the travel sector has been significantly disrupted by the internet and firms like Airbnb — consider the last time you talked to a travel agent to book a flight or hotel — there are still plenty of middlemen, not to mention currency exchange fees and other cross-border transaction costs.

What won’t: The promised ICO is actually a fake on a site created by the Securities and Exchange Commission to educate would-be-investors about too-good-to-be-true claims. Even the name is a reference to the Howey Test, a phrase coined during a landmark U.S. Supreme Court case that has present-day relevance to the SEC’s efforts to regulate ICOs. Crafting this bogus white paper was probably the most fun the SEC staffers creating it have had in a long time.

The site drew media attention upon its launch, but what’s worth a second look is the extent to which the ersatz white paper’s language mirrors that of real ones, including promises of “finalizing” negotiations with a broad range of industry partners, celebrity endorsements and a lengthy discursive description of seigniorage and the nature of fiat money. It’s a good lesson to read carefully. As always, caveat emptor.

Jargon overload: “In order to generate greater value in HoweyCoins over time, we have also built into each HoweyCoins partner agreement a contractual mechanism that increases the discount on services and products for users of HoweyCoins as the valuation of HoweyCoins increase. This incentivizes the travel partner to further seek HoweyCoins as payment in order to increase their holdings of HoweyCoins as its value increase. In exchange, some of this value to the travel partner gets translated to you as higher discounts.”

Truth in advertising: “If you responded to an investment offer like this, you could have been scammed.”

Mark Toner
Mark Toner is a Washington, D.C., writer and editor. He has covered business, technology, media, education, and healthcare for a wide range of trade and industry publications.