Blockchains: Going Mainstream, Still Revolutionary
Even if you haven’t seen The Graduate, you’ve likely heard some ham recite Mr. McGuire’s pitch to Ben Braddock, immortalized as #42 on the American Film Institute’s list of most famous film quotes:
“I just want to say one word to you. Just one word. Are you listening? Plastics.”
Probably good career advice for a newly minted college graduate circa the mid-1960s.
I suspect that 50 years later, newly minted college graduates are finding themselves cornered poolside to hear the other one word of another Mr. McGuire: “Blockchain.” Probably good career advice for them, too.
Born less than a decade ago as the backbone of a then-novel electronic currency scheme, Bitcoin, and the darling of crypto-anarchists like myself, the blockchain concept now finds itself the spoiled pre-teen adoptee of the big business and entrepreneur sets alike. It’s a simple and seductive idea:
Blockchains store information in databases distributed around the world instead of in single locations with perhaps an off-site backup or two at most. The integrity of that information is protected both by the redundancy of distribution and by strong cryptography. It’s very difficult to destroy or illicitly modify information stored in a well-designed blockchain. The blockchain is maintained by “miners” whose computers do the work of storing and constantly updating the database. The miners are paid in bits of cryptocurrency created by their own work.
How big is the block chain market? There are more cryptocurrencies out there than you can shake a stick at, but the top five alone (Bitcoin, Ethereum, Ripple, Steem and Litecoin), as I write this, boast a combined market capitalization of nearly US $10.5 billion.
There’s money in blockchains. More importantly, there’s opportunity in blockchains. While the first and most obviously killer app is processing financial transactions (and, done rightly, keeping the details opaque to busybodies), new ways of using the idea pop up daily.
Schemes like “smart contracts” and “Digital Autonomous Organizations” are emerging as tools for moving law and corporate governance standards out of the hands of states and into the more objective universe of (theoretically) unalterable, (hopefully) ineradicable digital code.
Steem, currently fluctuating between third and fourth in cryptocurrency market cap, is a social media project built around the interactions of three cryptocurrencies. Not only “miners,” but content creators and curators as well, receive rewards from the blockchain process. Think of it as something like getting paid to use Reddit or Facebook.
Years ago, I wrote that Bitcoin might or might not be the killer cryptocurrency app, but that the idea was here to stay. I had no idea how right I was. Bitcoin is still top dog and some of its progeny will certainly fail (some of them spectacularly). But blockchains are going all kinds of places, and society will go with them.
Will blockchains replace state control and regulation of markets? I’m less optimistic about that than I used to be. Worried bureaucrats and big business power players are are working overtime to co-opt the technology and suppress that aspiration. But we can hope.
Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
Originally published at The William Lloyd Garrison Center for Libertarian Advocacy Journalism.