While Bitcoin has received the lion’s share of attention since its conception, recently the Blockchain — the distributed public database used to record Bitcoin transactions — has just begun entering the spotlight for enabling some important capabilities outside of Bitcoin.
“It’s my belief that Blockchain technology will be as important to the world as Gutenberg’s printing press,” Nic Cary, cofounder of Blockchain.info, told me recently. “For the first time in the history of the world we can reimagine how the world transacts without relying on an intermediary.”
Here are eight unexpected ways the Blockchain might change the world:
1. Distributed Cloud Storage
The Blockchain has already been manipulated to store information in unscalable ways. A niche storage trick is sending small amounts of Bitcoin to addresses that represent information when converted into a Unicode format. For example, the above image of Nelson Mandela is recorded in this transaction.
Besides being a hobby for techies, Blockchain data storage could be disruptive. Current cloud storage services are centralized — thus users must place trust in a single storage provider. With the Blockchain, this can become decentralized. For instance, Storj is beta-testing cloud storage using a Blockchain-powered network to improve security and decrease dependency. Additionally users can rent out their excess storage capacity, Airbnb-style, creating new marketplaces.
“Simply using excess hard drive space, users could store the traditional cloud 300 times over,” Storj founder Shawn Wilkinson told me. “Considering the world spends $22 billion + on cloud storage alone, this could open a revenue stream for average users, while significantly reducing the cost to store data for companies and personal users.”
2. Unbreakable Contracts
Smart contracts are contracts that are self-enforcing or self-executing. The Blockchain’s role in the contract is to replace a third party required to resolve a legal dispute. Known as “smart properties” or “colored coins,” a token could be used to represent any asset, from stocks to cars. The ability to hard-code transfer of ownership when trading these assets can potentially create “unbreakable” contracts.
For example, imagine a red-widget factory receives an order from a new customer to produce 100 of a new type of blue widget. This requires the factory to invest in a new machine and they will only recoup this investment if the customer follows through on their order.
Instead of trusting the customer or hiring an expensive lawyer, the company could create a smart property with a self-executing contract. Such a contract might look like this: For every blue widget delivered, transfer price per item from the customer’s bank account to the factory’s bank account. Not only does this eliminate the need for a deposit or escrow — which places trust in a third party — the customer is protected from the factory under-delivering.
Although this remains mostly theory, platforms like Ethereum are bringing smart contracts closer to reality. Additionally, because data stored in the Blockchain cannot be tampered with, basic contracts like marriages have already been recorded in code.
3. The End of Patents
Unlike smart contract platforms, ProofOfExistence.com (PoE) has launched basic legal services that can be used today. As one of the first non-financial uses of the Blockchain, PoE stores encrypted information on the Blockchain. This enables an irreplicable transaction hash to be associated with a unique document that is stored off the Blockchain.
The best use-case for this could be replacing patents. A company such as Apple might want to prove it created a technology at a certain date without filing for a publically-known patent. If anyone challenges its ownership of a technology, it could later reveal internal documents that are linked to the transaction hash, thus proving existence at the date specified on the Blockchain.
PoE may be one of the few working Blockchain use-cases, back in 2015 founder Manuel Araoz said, “I hope to see many new apps leveraging the non-financial decentralized consensus platform Bitcoin provides in 2015.”
4. Encrypted Personal Profiles on the Blockchain
The social media phenomena has created a tremendous privacy issue all around the world. New decentralized profiles controlled by the the individual will replace existing login requirements and data collection.
5. Decentralized Personal Banking with no borders
Since the invention of the internet the idea of decentralization has always been at the forefront. Few people seem to know that the internet was originally developed by the American military and one of the goals was for the network to be survivable. Even if the worst case scenario were to arrive, the military wanted the predecessor of the internet to be able to continue functioning — even if it were in a diminished capacity.
So, from the very start decentralization was critical to the development of the internet. Centralized structures and hierarchical network architecture would make the young internet far too easy to cripple or destroy. So the military engineers developed a system where there was a bare minimum of centralization and everything that could be decentralized was decentralized.
However, the internet was only a military instrument for a short period of time.
The fire goes out of control and the flames are rising
First picked up by scientists and then later by tech enthusiasts and hobbyists, the internet remained the domain of people committed to decentralization and the easy spread of knowledge and communication. And as more industries moved online the very nature of the internet began to decentralize them.
One of the first things to be totally decentralized was communication. IRC, USENET, and more provided the freest space for communication the world has ever known. Following communication came the news.
What did these two things have in common? They were constantly oppressed and controlled by governments the world over. However, the internet has proven to be a tough bull to wrangle and people that want to speak freely and report freely moved online.
Communication and reporting in general have both profited heavily and are slowly becoming as decentralized as possible (much news nowadays is reported first on social media and hours later by the ‘real media.’)
But in this era of decentralization, when everything important that had been for so long oppressed is finally escaping the cunning clutches of oppressive regimes, they hold one last bastion.
Storming the Castle treasury
Personal banking still remains heavily centralized and controlled by relatively few players. One of the reasons is because governments so effectively hold onto control of finance, money, and assets within their borders.
And the only reason they retain this control is because the government issues money and the government backs money. Without the government, (fiat) money is worthless as it isn’t actually backed by anything of real value, (once upon a time, there was Gold). And so long as the nation controls the currency, the nations control the finances of all citizens and non-citizen residents.
And because the nation needs this money to stay inside the country so it can be taxed, finance tends to be one of the most restrictive areas insofar as individual rights.
But with cryptocurrency this is changing and personal banking is finally decentralizing. Why? Because it cuts the control structure off at the root.
When currency is decentralized, finance is decentralized.
- Decentralized banking puts you in charge
Cryptocurrency has caused a seat change in banking. Because people can remain anonymous and secure, it requires a whole new kind of system to manage crypto finance. This has led to something spectacular — the new system, (crypto banking), frees you completely from the restrictions of the old one.
Borders are meaningless with cryptocurrency as they don’t exist online. A transaction between a user in NYC and another in LA is no different from a transaction between one in Beijing and another in Frankfurt. The system is totally decentralized and the power rests with the person holding the money not the person printing it.
In the case of national cryptocurrencies, the blockchain technology will supplant the clearing process now handled by commercial banks, undermining an important revenue stream. Banks would likely retain their role issuing mortgages and other forms of credit for another few decades. Blockchain banking is still in its infancy stage.
6. Nation Currencies will migrate to run on the Blockchain
Regulating the money supply through changes in interest rates — i.e. monetary policy — would be much more direct, which could mean it’s more effective and cost-efficient. Governments could crack down on tax evasion, since transactions will be traceable. Plus, for the same reason Bitcoin is so popular among people looking to circumvent government control of currency, converting to a digital currency will be the ultimate solution to any government that doesn’t like how it’s being treated by the global financial system. That includes governments facing international sanctions. If Chen’s London Trust Media is correct, if governments become successful in creating cashless societies worldwide, this may result in a single globally accepted digital currency where nations may no longer be able to trade with each other through one nation merely printing more money and putting their own currency into circulation to offset their national debt or trade deficit — as in the case of the America’s handling its multi-trillion dollar indebtedness.
A single, decentralized global currency would force nations to sell off their natural resources [instead of just printing money] to purchase cyber currency (purchased perhaps from the 1% elite group that owns 40% of the world’s wealth), to be put into national circulation — a dramatic geo-political game changer.
7. Electronic Voting
The automation of counting paper votes is a no-brainer for cost, time, and accuracy improvements. However, previous systems have been riddled with technical issues. The main problems are the inability to verify a machine’s accuracy during recounts and being prime targets for hackers. It is not surprising that political parties have already turned to the Blockchain for their internal voting.
The Blockchain is a secure network because each transaction is encrypted with a hash that is used to verify the succeeding hash. Simply put, this means that changing one vote requires millions of votes to be changed before another vote is cast. The network is protected by the simple fact that no hacker has enough computing power to rewrite so many votes that quickly. A hacker would actually need more computing power than the top 500 supercomputers combined, 256 times over.
On the accuracy front, Blockchain’s pseudonymity allows each vote to be publicly shared without identifying the voter. Hence, each voter could check their vote has been counted from public records. This may one day eliminate election corruption in the undeveloped world.
8. InterGalactic Credits to replace Earth money (Finally)
Sorry baby… no dollars for goods on Mars.
There are almost endless applications of the Blockchain. However, most of these applications are at a pre-alpha development stage. With $61.4 billion invested to date in Bitcoin and Blockchain startups, do not be surprised to see the Blockchain slowly creeping into your life.
Nic Cary of Blockchain.info commented, ‘”Check it on the Blockchain” will be the phrase of the 21st century. It will be as commonplace as people saying “Google that.”
Abstract:In some corners of the Human race exist few curious homosapien,
that still want to calculate the value of π!
- Be one of the curious!
- Never stop asking why or why not?