Why virtual reality and Blockchain will emerge in 2016

Graham Hann, partner and head of UK Technology, Media & Communications group at law firm Taylor Wessing, outlines his technology predictions for 2016.

Blockchain will emerge from Bitcoin’s shadow

Many commentators and investors have speculated on the value and future of Bitcoin. Less attention has been focused on the technology that underpins it, the Blockchain.

Somewhat ironically given some of the more negative associations linked with Bitcoin, the Blockchain may, in fact, provide a mechanism to verify transactions, ownership and to avoid fraud which is more reliable and less open to abuse than many of the systems widely used in business today.

2016 is likely to see the emergence of Blockchain-like public ledger technologies in multiple fields, providing a high degree of cutting out the middle man (disintermediation). The effect on the way asset ownership, and agreements between counterparties, is recorded and evidenced, could be significant. It might even reduce the need for lawyers, but let’s not be too rash in our predictions so early in this arena.

Data security will be the biggest issue in tech

Cyber insurance will play an ever more central role in businesses’ risk mitigation, and we predict the cyber insurance market will become a great deal more crowded during 2016, with policies that will offer not just compensation, but also coverage for legal implications as well as access to specialist PR providers.

Many businesses will prepare for a data breach on the assumption that it will happen one day, in some ways reminding us of the months leading up to the 'Millennium Bug' when we were all paranoid about the effects of a failure to be EMU compliant. Planes didn’t fall out of the sky at midnight on 1 January 2000 as was predicted by some then, but it’s easy to forget that that was largely due to the enormous amount of work and pre-planning undertaken in the last few years of the 1990s.

We believe the investment likely to be made into data security measures in 2016 will make those years look like a drop in the ocean.

Ad blockers unblocked?

This is widely referred to as the biggest arms race on the internet, and many platforms (such as 4OD) are now employing technology to detect ad blockers and disable content while they are in use. Some commentators argue this could turn out to be a storm in a teacup, and point out the worries that broadcasters had when VHS was first widely used (allowing for the possibility of fast forwarding through the ad break in a recorded programme).

The industry not only survived that technological breakthrough but has flourished since. Others argue that forcing ads onto users who are becoming tired of being pursued around the internet by programmatic ad platforms makes no commercial sense and that publishers and brands need to get smarter and more subtle in how they reach their users.

There is certainly the possibility of legal action – but attacking disruptive models popular with consumers would seem unlikely to be a long term solution (as the opponents of Uber are finding out, and as the film studios found out when they challenged video back in the day), and until there is a paradigm shift in the way advertisers target users, the ad blocking arms race is likely to continue unabated in 2016.

Virtual will become reality

Virtual reality has been a long time coming, but the last year or two has seen unprecedented investment and consolidation. Consequently, the technology is now poised to transform the entertainment industry, including gaming and video, over coming years whilst offering the potential to expand quickly into other markets such as industrial and healthcare.

The legal issues applicable to Virtual Reality games are in many ways no different to those applying to traditional 2D games, however if 2016 does indeed signal a new phase, then issues that have been explored but not necessarily resolved in the past would need considering: much was written about platforms like Second Life where users could 'own' virtual assets including real estate, and even advertise. What is the platform’s liability to users in respect of these assets? What if a user’s IP (such as their brand) is infringed in a virtual world? Would a user have any rights against the platform if it was unavailable? Can virtual currency be earned or purchased, can it be used outside the platform and does this raise any issues under Financial Services laws?

Technology will still outpace regulation

While what exactly 2016 will bring for the Tech, Media and Communications world is unpredictable, certain constants hold true - Gordon E. Moore, a co-founder of Intel, famously predicted that every two years the number of transistors on a chip will roughly double.

We predict that the gap between the laws governing technology, and the technology itself, will continue to double at about the same pace.

Image source: Shutterstock/Makistock