Receive all Cointelegraph news immediately in Telegram.
This is the third and final part of our series “Beyond Currency.”
bitcoin, blockchain, cryptocurrency, ethereum
This is the third andfinal 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 thatDApps for payments, data storage, bandwidth and cloud computing may one daysurpass 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 decentralizedapplication, and they are working to apply its blockchain protocol to a numberof 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 bedescribed as a first-to-file system: if one entity has 50 BTC, andsimultaneously sends the same 50 BTC to A and to B, only the transaction thatgets confirmed first will process. There is no intrinsic way of determiningfrom two transactions which came earlier, and for decades this stymied thedevelopment of decentralized digital currency. Satoshi's blockchain was thefirst credible decentralized solution. And now, attention is rapidly startingto shift toward this second part of Bitcoin's technology, and how theblockchain concept can be used for more than just money.
- from the Ethereum white paper
This is a difficult concept for many people, especially as cryptocurrenciesthemselves are a relatively new idea. But consider the way most of people usethe Internet: We have some combination of a machine on which we store files andcloud storage, and both rely on some level of trust in a third party (backupsaside, 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 CloudDrive).
Bitcoin showed us that instead of trust, we could develop anetwork in which files are broken up and dispersed (just like your “Game ofThrones” torrents), and those chunks of files can be encrypted so that we holdour own private keys. Jeff Bezos wouldn’t be able to look at your files, norwould Mark Zuckerberg, nor would the US Customs Agents who have confiscatedyour laptop. This is part of what the people at MaidSafe are working on.
The Ethereum white paper lists a number ofexamples of potential decentralized applications we could see emerge. Theseinclude peer-to-peer gambling, decentralized data feeds and marketplaces thatrely on a blockchain to prove the identities and reputations of both buyer andseller.
Besides Ethereum and MaidSafe, here are a few more projectsinvolving DApps:
Who is Threatened?
A decentralized Internet is threatening to any big Internetservice provider because commercial ISPs control and charge money for access toonline content. With that control stripped away and given to individuals,companies such as Comcast would find one of their primary revenue generatorsobsolete.
The folks who are already fighting Net Neutrality have plentyof incentive to fight a decentralized Internet.
Then, consider what organizations benefit from theirentrenched positions in data storage, bandwidth and cloud computing. These arethe ones for whom decentralized apps will initially be existentiallydisruptive. These established players will fight this technology tooth andnail, and the fight could get ugly.
The Future ofDecentralized Applications
We reached out to a couple of experts in the field to gettheir takes on the potential impact decentralized applications could have.
David Irvine, CEO MaidSafe:
I think [MaidSafe] willgive everyone free access to the world’s data and data resources. This meanseducation will flourish. The benefits of easier trade and communicationsbetween all the people of the world will allow us to move forward as a speciesin an inclusive manner.
I used to talk aboutthis while raising investment. When asked about returns, I would answer thatengineers can count, and we are creating something that will disrupt trillionsof dollars of business, so financial returns should be simple. More importantlythough is that if we give everyone free computing and somebody jumps frombehind a bush in the developing world with a cure for cancer, let’s say, thenwhat is the return? To me, this is what we can achieve with fair and inclusivesystems.
Removing the requirementfor humans to do work and replacing this by math is very obvious. Math iscorrect and repeatable, and there are not many equations that become greedy andcorrupt. The simplification of complex systems is a never-ending job and one weshould all welcome. I find corruption, greed, ego and ownership of systems tobe a very dangerous issue and one that does lead to death, starvation andmistreatment of people.
From David Lio of CoinHeavy:
Let me begin by sayingthat I am just a guy who believes in the principles and technology ofcryptocurrency. I work in the industry each day because it is simultaneouslythe most interesting field and the one with the greatest potential to changethe world for the better. If folks are interested in what the future holds, Iwould recommend going directly to the source by listening to genius-levelthought leaders like Stefan Molyneux, Vitalik Buterin and Andreas Antonopoulos.That being said, I am happy to paraphrase the most exciting ideas I haveencountered and to speculate a bit myself.
The potential fordecentralized applications is limitless. Johnston's Law holds that “Everythingthat can be decentralized, will be decentralized” (David A. Johnston). We haveall of these crucial systems underpinning our economy and our society, systemsthat are intensely centralized and hierarchical, simply because until now wedid not have the technology to implement them in any other manner.
One of the areas wherethe archaic nature of such centralization and hierarchy is already quiteapparent is the financial industry. Clearly, most people do not feel that theyare being financially served in proportion to the amount of their economyconsumed and controlled by the financial services industry. As billions ofunbanked people continue to leapfrog traditional network infrastructures —skipping wires for wireless — we should sincerely hope that they also leapfrogtraditional financial systems — skipping banks for Bitcoin.
Currency, however, isjust the first application of the technology behind Bitcoin. Now that adistributed ledger is possible, so too are exciting concepts like smartproperty and cryptofinance. Second-generation platforms like Ethereum will makepossible decentralized exchanges, decentralized stock markets, anddecentralized financial contracts as simple or as complex as anyone wishes toprogram. Once cryptofinance is a reality, every single industry and businesswill be affected. Traditional banking and financial overhead will become acompetitive disadvantage as decentralized, low-to-no-fee, open source solutionsemerge and evolve.
Another interestingdecentralized application is distributed cloud storage. In this model, userscan rent fully encrypted, massively decentralized cloud storage space.Alternatively, individuals can also provide storage to the network and earn thefees of those renting space via a process called “proof of resource.” Suchnovel decentralized applications mean new ways for people to enter thecryptocurrency economy. Mining bitcoin or other cryptocurrencies can betechnically challenging. Connecting a computer with one or more hard drives tothe Internet, however, is something most of us already do each day.
More significant thanall of this, however, is the potential for the end of war. Stefan Molyneuxrecently gave the most important philosophical speech that has ever been given,in which he outlines how worldwide adoption of bitcoin would render war funding infeasible. I implore every person who values thoughtand truth and human life to seriously consider Stefan's ideas.
I would be a fool tospeculate specific timeframes but I will say this: When I first read theBitcoin whitepaper back in early 2011, I was fascinated. However, I dismissedthe idea of cryptocurrency in the near term, expecting the time horizon forsignificant adoption to be on the order of 25+ years. Clearly, I was completelywrong. The world is ready for new solutions to money and finance not in somedistant future, but now. And this is just the beginning.
We live in exponentialtimes; it's a pleasure each day just trying to keep up.
Follow us on Facebook
For updates and exclusive offers, enter your e-mail below.
One fine body…
Thank you for contacting us! We will reply to you as soon as possible.
Thank you for your interest in our franchise program.
We are considering your request and will contact you in due course. If you have any further queries, please contact:
Reset letter sent.
Please checkout your mailbox for password reset details