4/Extensions of the Bitcoin Protocol
It was only five and half years ago, that Satoshi Nakamoto introduced the world to Bitcoin, in a paper which lay the framework for what was to be a “peer-to-peer cash exchange system”. But since then, the open source nature of the Bitcoin protocol coupled with a fast-growing community of users have sparked a flurry of experimentation in the crypto-community, leading to new and unexpected uses for the Bitcoin protocol. By dissecting the features of bitcoin, people around the world have demonstrated that the Bitcoin protocol’s potential applications are not merely limited to the world of finance and commerce. Several use cases include voting, time-stamping, and managing just about any kind of data over a globally distributed network.
The Expressive Power of the Blockchain
The first two cases, voting and time-stamping, are made possible by incorporating the technology at the heart of the Bitcoin protocol, the blockchain — a distributed public ledger.
In the event of voting, the blockchain could be used to ensure the integrity of votes during an election, since tampering with them without being noticed would be difficult to do with the existence of a public ledger. Whereas in comparison, it has been demonstrated that existing voting terminals can be hacked using materials bought for less than $30. Though a decentralized voting protocol adapted for large scale use has yet to be ironed out, projects like The V-Initiative and BitCongress are working to make it a reality.
Time-stamping on the other hand has gained notable traction through sites like proofofexistence.com. The site currently allows you to timestamp a document, certifying without a doubt that it had existed at a certain point in time. This is done by putting the file through a cryptographic hash function that digests the file into an identifying alphanumerical series of characters — never having to reveal the actual content along the process. The main setback is that there is currently no foolproof way of proving authorship of files, though for use cases like patents, publicly revealing the digest would accomplish this to a certain degree.
Ultimately, both of these applications exploit the fact that transactions that are recorded in the blockchain have a lot of expressive power built into them in the form of a scripting language. A step-by-step look into coding information into the blockchain, using time-stamping as an example can be read here.
Globally Distributed Solutions
There is huge potential to use the Bitcoin protocol to solve all sorts of problems in a globally distributed fashion, and one application that appears to be taking off is the storage of data. Earlier this year, MaidSafe (Massive Array of Internet Disks) debuted its peer-to-peer decentralized platform for the internet with the sale of its complimentary cryptocurrency, the SafeCoin, and raised $6 million USD in just under 48 hours.
MaidSafe seeks to address a global problem: the vulnerability of today’s data. The weaknesses lie in the fact that much of our data is stored on a single computer and accessed through a local network connected to a single provider. In the MaidSafe system on the other hand, data is shredded and stored globally in thoroughly encrypted code, as multiple copies in several time zones. All that is needed to use the system is to give up any unused space on your hard drive and download the requisite software, removing any additional third-party from the equation. However, iron-clad data-storage is only the most basic application of the MaidSafe system. CEO of MaidSafe David Irvine drives home the vision of his firm in the bold claim, “What Bitcoin is doing for decentralizing money, Safecoin will do for decentralizing all Internet services, including enterprise data centers.” Further confirmation of the vast opportunities in utilizing the decentralized Bitcoin protocol is found in the appearance of other startups like Ethereum which, among other things, seeks to handle financial transaction automation.
The future for crypto is extremely exciting as entrepreneurs are continuously coming up with creative ways to utilize various features of the Bitcoin protocol. And private equity support from VC firms like Andreessen Horowitz, are further enabling greater strides to be made in the space. At this rate, it is evident that even if the great social experiment of institutionalizing Bitcoin as a currency may fail, its core technical underpinnings, the Blockchain and an effective decentralized network, are here to stay.
