Loyalty Rewards and Blockchain: the Conference

Last Wednesday and Thursday, the very first annual LoyaltyLive conference was held in Chicago. Large swaths of industry expertise were evident in the presentations given and the networking from within the crowd. While presenters drew from a variety of occupational backgrounds, including legal, corporate executive, small business, and engineering, the cast of presenters and attendees boiled down to one clear division: they were there with knowledge on blockchain or they were there with knowledge on loyalty rewards.

Before I go into some items, let me say that this conference is a true eye-opener to how fast this industry has evolved in a year's time when it comes to market validation.

This is by no measure the comprehensive list: just a few takeaways that I was able to document for further recall. Note that these are just some spare notes, and may not completely convey the full thought of what the presenter/panel was trying to say. As well, there are some topics and presenters omitted due to my just not being present during their presentation or just not having enough notes to fully represent their talk.

Day 1

Individuals

Jeff Pulver, Alchemist Group 

"Never ask permission for disruption"

• Made parallels between pioneering VoIP and the blockchain industry. Stressed acting now, because industry evolution won't wait. Presented that major considerations for him in evaluating a project is the strong conviction to an innovative idea that would make for a better future.                                      

Raul Jordan, ZK Capital

"ZKP obfuscate not only privacy, but also computation"

• Discussed the issues facing Ethereum currently (Ethereum 2.0) including: (1) lack of scalability due to Proof of Work; (2) privacy being disabled by default; (3) slow & expensive to transact; and (4) no built-in randomness mechanism for assured security. Discussed the remedies in Ethereum 3.0: (1) scaling through Proof of Stake; (2) privacy through zkSTARKS; (3) massive scalability through sharding; (4) built-in, strong, untraceable randomness. In regards to the privacy of current public ledger cryptocurrency tokens, he discussed that currently Bitcoin and Ethereum don't have privacy enabled by default, while coins like ZCash do. More on that point, he spoke on the ability of the RANDAO random number generator combined with Verifiable Delay Functions to provide a way of shielding both user's data as well as computation. He stated that it can be done using FPGAs for very little power usage. Discussed the architecture of Ethereum 3.0 (shown below).

Jason Barkeloo, Knowbella Tech

"Trading of security tokens doesn't exist yet: these guys are doing it"

• Spoke on the utility and progress made on security tokens from a blockchain startup point-of-view. Discussed how security tokens must be properly SEC-compliant and follow the proper ecosystem rules to enable trading in the future. Presented that the secondary market for security tokens should be coming into effect in the future, but does require ecosystem evolution to make that happen.

Al Burgio, Digital Bits

"Multihop (explained): 'A' wants this, 'B' wants that; move all the chips on the table and nobody has to be a day trader"

• Discussed the utility of Digital Bits as a blockchain to enable a transaction and trading layer for various tokenized assets. Elaborated that high throughput, multi-hop transfer, high availability & scalability, and the nature of it being a decentralized exchange, as well as many other features contribute to the viability of the platform.

Panel

David Feldman, Tonisha Hood, Jay Sorenson, Adeel Syed

"Loyalty programs cause people to fight over competitors in a sea of mediocrity"

"If you're going to ask about people's data, you had better use it"

"I shop at places where there aren't loyalty programs"

• Discussed the nature of the cutting edge of loyalty programs and how they need to adjust to the times. Brought up was how loyalty programs need to meet the needs of Internet buyers. Spoke on how large swaths of collected user data goes unused and poses not only security risk but also grievances for consumers.

Bradley Rotter, Brennan Nacol, Jeff Pulver, Nithin Eapen, Daniel Jiwoong Im

"Security tokens is a fancy name for a digital share certificate"

"Smart securities: programmable securities that incentivize customers to hold your tokens. Have to have accredited investors for the first year but that goes away after a year."

"T+3 [days], now T+3 milliseconds"

• Spoke on some of the key opportunities that will exist within financial trading spheres as distributed ledger continues to evolve and gain adoption. As a major opportunity the panel discussed that transaction settlement times could go from T+3 days to T+3 milliseconds in the future. Spoke on the different Eastern country vs Western country philosophies when it comes to compliance and investment in blockchain technology.

Al Burgio, Julie Lyle, Nadine Rubin, Don Sheluga, Ruth Plater

"Now is the time to get [your organization] involved with blockchain because some companies are footing the bill"

"Increased liquidity for reward points"

• This panel provided a high level discussion over the advantages and challenges of tokenizing loyalty reward points from a business perspective. During the panel, the comparison was made between gift cards and cryptocurrencies as they both function as quasi-currencies that can be used for purchases, but are not legally-classified as currency. The panel acknowledged that the concept of tokenizing loyalty reward points would lead allow them to be made more liquid, perhaps opening up the opportunity to secondary reward token markets. It was noted that the earning of brand-agnostic reward tokens would allow users more flexibility to redeem reward points tailored to their most immediate needs.

Day 2

Individuals

Jenna Pilgrim, Streambed Media

"If I give a pub in Chicago my passport, they don't need to know my name, age, or that I'm from Canada. They only need to know that I'm legally able to buy a drink."

• Discussed the problems her company Streambed media is looking to fix when it comes to user data. Discussed concept of "pseudonymous cohort data", a concept that draws similarities to zero-knowledge proofs, where you don't have to know someone to know that their data is valid.

Phillip Shelper, Loyalty & Reward Co

• Discussed the state of many of the loyalty-focused blockchain companies currently operating in the space. Companies included Rakuten, Cryptoback, and Loyyal. Made mention of his book and gave a few free copies.

Gregory Rocco, Consensys

• Discussed token creation and utilization from a software engineer's perspective. Listed 4 major functions of tokens: to give (payments); to vote (governance); to lock (staking); to represent (tokenized securities)

Panel

Carol von Kleef, Peter Nadimi, Adam Tracy, Phillip Fornaro

"Canada's sandbox- does that work?"

"Are we losing the battle with overseas? Talk to the SEC"

• Discussed the state of security token compliance from a legal perspective. Talked about how some countries are taking different models, such as Canada with a "sandbox" approach to fueling innovation. Made the note that the SEC realizes that they are in competition with foreign competitors and may be willing to listen more than most people believe. Developers and CTOs have to watch themselves in ensuring that they join a firm that has SEC-compliant products so that they don't become engulfed in cases like Liberty Reserve, where the founders, CTO, and innovation guys were brought up on charges due to willful ignorance of law abuse in code writing.

In a nutshell, the conference was filled with industry incumbents who brought a range of key business, legal, engineering, and investing experience to the table when speaking about the state of blockchain technology in loyalty rewards. Hats off to Untraceable and Digital Bits for hosting a very insightful and entertaining two-day event. It's safe to say that I've walked away from the event with some new perspectives on the way that the future will create opportunity for synergy between these retail and technical capacities.

NOTE: if you were at the conference as one of the speakers and have noticed that I have made an error about who a particular quote or sequence topic was attributed to, please let me know and I will change it. While I think I have it all just about correct, there were a few last minute presentation changes that aren't reflected on the conference agenda.