Sell me this idea! Blockchain and the rise of idea-driven economy

"Sell me this pen!" Jordan Belfort a.k.a The Wolf of Wall Street

If there's one constant rule in economics it is the fact that the price of an asset is what a buyer is willing to offer in exchange. No matter what the asset is, as long as there's a willing buyer, there will always be a price, and a value.

There is no doubt that ideas are assets, perhaps the most difficult to trade! That is why there are so many ways to value ideas and determine how much would they actually worth. Unlike a house, a stock or a piece of rare jewelry, an idea must conform with some extrinsic conditions to find buyers who are willing to exchange value to own the rights created by such an idea.

Having an idea protected by a patent is perhaps the most commonly accepted condition for ideas to acquire an exchange value. Having a well-protected trade secret with proven value-creation potential is another condition for valuing ideas. Startup founders work so hard to demonstrate the value of their ideas by many ways, including executing them first on a small scale to build initial value based on market actions and promises.

Trade secrets live much longer than patents. However, for a trade secret to be exchanged as an asset, it requires extensive market validation. Trade secrets require high levels of information security to keep them safe from competitors. From Coca Cola formula to Google Search Algorithm, trade secrets have to be well guarded and secured in order to claim high value for their rights. Coca-Cola claims its formula is the "world's most guarded secret." The recipe, the company says, is now kept in a purpose-built vault within the company's headquarters in Atlanta.

What if a 17 years old kid in Cuba comes up with a better formula than Coca Cola's? What if a computer engineer in Uganda designs a more robust search algorithms than Google's? What are their chances for capitalizing their ideas?

Is it easy for these remote inventors in marginalized economies to build startups based on their ideas? What if they just want to sell these ideas to companies that actually have the resources to turn their ideas to valuable trade secrets?

Blockchain comes in as a democratization framework to enable a global idea-driven economy. Decentralized ledgers can power secured digital vaults and marketplaces to let inventors secure and trade their ideas and designs.

Securing Trade Secrets and Safeguarding IP Rights

Unlike patents, trade secrets do not require uniqueness search and do not have to embody a record of existing relevant conceptions. A trade secret is basically any information that has inherent value because it is not generally known or readily ascertainable by others, and which the owner(s) takes necessary measures to keep secret.

A trade secret, therefore, requires a proof of ownership and measures to keep it secret. Bernstein.io is a blockchain-secured IP rights platform that offers both ownership proof and crypto-protection for trade secrets and other forms of IP. Bernstein allows anyone to record their innovation and creation processes using the Bitcoin blockchain and national timestamping authorities.

Ideas, represented by digital files of any size and format, can be quickly registered online to prove existence, ownership, and development over time, in real-time. Most importantly, all notarized data will remain perfectly private, thanks to a unique cryptographic layer.

Trading Ideas: What NFTs Can Offer

Non-Fungible Tokens (NFTs) are digital representations of unique assets created using blockchain smart contracts. For the past few years, NFTs has soared as a new layer of the blockchain economy with market cap reaching $ 315M in 2020 from $30M in 2017. So far NFTs are mostly used in the gaming industry and for trading digital art.

NFTs offer an efficient DeFi instrument to trade ideas and IP rights. Platforms like Opensea, Mintable and MintBase offer NFT minting workflows to let inventors convert their ideas and designs into a tradable digital asset. Minting is the process of creating and validating a data-block that contains the trade secret, idea or design on a blockchain. The process runs blockchain protocol(s) to store, encrypt and setup trading rules and royalties. Once minting is completed, the owner of the NFT can offer it for sale in exchange markets and make start monetizing.

Opportunities and Challenges

While blockchain offers the first opportunity in history to create a thriving idea-driven economy, it certainly still have to answer some of the main challenges facing the rise of idea-driven economy.

How to verify that an idea does in fact embody value? How to make sure that an idea is unique? How to make exchange contracts legally binding and enforceable nationally and globally?

It is certain that creative use-case scenarios and dynamic tokenomics can partially answer some of these questions. The XCAD Token project is an excellent example for how creative use-case scenarios can bypass some of these challenges and transform the classic ad-revenue monetization of media creation to a full idea-driven economy. Their platform generates value for ideas (in the form of videos) based on the dynamic interaction of viewers (audience / potential buyers) with the idea/content. Using privacy controls and NFT smart contracts, ideas and designs for VR apps and motion graphics can be easily offered for sale as trade secrets on this platform.

However, some challenges will require more than use-case scenarios to be resolved. Some technologies like text mining and deep learning will be necessary to establish uniqueness of an idea before having it minted on the blockchain. Human input, perhaps through c crowd-auditing, will definitely be required to establish value benchmark for ideas according to their addressable markets.

Our generation is witnessing the rise of idea-driven economy. Our generation is also witnessing unprecedented challenges in human history such as climate change, global pandemics and natural resources depletion. It is our responsibility, therefore, to ensure that it is the beginning of a better future, rather than allowing it to be the end of a great past.

-Sell me this idea! - It's NFT!