‘We Live in Exponential Times’: BLOCK CHAINS, DECENTRALIZATION AND THE FUTURE

This is the third and final part of our series “Beyond Currency.”

Part One: Bitcoin as a Disruptive Technology

Part Two: A Brief History of Disruptive Information Technology

It is conceivable that DApps for payments, data storage, bandwidth and cloud computing may one day surpass the valuation of multinational corporations like Visa, Dropbox, Comcast, and Amazon that are are currently active in the space. 

- from The General Theory of Decentralized Applications

Some people have recognized the value of Bitcoin as a decentralized application, and they are working to apply its blockchain protocol to a number of systems outside of the realm of payments and currency. David A. Johnston (quoted above) is one such person, as are the developers at Ethereum:

Bitcoin as an application can be described as a first-to-file system: if one entity has 50 BTC, and simultaneously sends the same 50 BTC to A and to B, only the transaction that gets confirmed first will process. There is no intrinsic way of determining from two transactions which came earlier, and for decades this stymied the development of decentralized digital currency. Satoshi's blockchain was the first credible decentralized solution. And now, attention is rapidly starting to shift toward this second part of Bitcoin's technology, and how the blockchain concept can be used for more than just money.

- from the Ethereum white paper

This is a difficult concept for many people, especially as cryptocurrencies themselves are a relatively new idea. But consider the way most of people use the Internet: We have some combination of a machine on which we store files and cloud storage, and both rely on some level of trust in a third party (backups aside, I still currently have to trust the MacBook I’m typing on won’t crash, and that Amazon won’t distribute some vacation photos I have stored on Cloud Drive).

Bitcoin showed us that instead of trust, we could develop a network in which files are broken up and dispersed (just like your “Game of Thrones” torrents), and those chunks of files can be encrypted so that we hold our own private keys. Jeff Bezos wouldn’t be able to look at your files, nor would Mark Zuckerberg, nor would the US Customs Agents who have confiscated your laptop. This is part of what the people at MaidSafe are working on.