Blockchain For The Greater Good And Not For Profit
By Katelyn Perna on ALTCOIN MAGAZINE
The future of mass blockchain adoption is dependent on how we showcase blockchain capabilities in our implementations today.
Blockchain Capability
Originally created for the digital currency, Bitcoin, blockchain has proven itself useful across different industries and use cases. Over the last three years, we have seen enterprise blockchain transform from science experiments and proofs-of-concept to pilots, and even production-grade implementations. Some of which have been very successful. Blockchain implementations that started as permissioned and closed networks are now expanding to hybrid models of permissionless networks with privacy considerations and permissionless all-together. New ecosystems are being created everywhere.
A blockchain is simply a distributed database or ledger comprised of a time-stamped series of immutable records of data. Blockchains are managed by a cluster of computers that are not owned by a single entity. The blocks of data are secured and bound to each other using cryptography, making the integrity of the information secure. Blocks are verified by the other computers in the network via consensus algorithms, creating unique records that have a unique and verifiable history. The most common implementation of blockchains are happening in the financial sector, but as we have seen, this is valuable in many other instances and industries.
Why is this so great? No central authority. This is by far one of the most disruptive features of blockchain technology and a big reason why the technology has the ability to impact and change our world.
Blockchains carry zero transaction costs. In passing information from party A to B in an automated safe manner, one does not have to pay a thing. Think about sending payments today and the 1–5% transaction fees that can be imposed by the central authority to you, just for sending someone something that you in fact own. Blockchains can transfer and store money, but they can also replace processes and businesses that rely on charging small fees for transactions. This is just one area of applicability. You can eliminate the middlemen and central authorities all over the spectrum. This is the key disrupting feature.
The significance of blockchain technology is the ability to allow people to interact with who they need to interact with at no cost. Businesses everywhere have made millions and billions of dollars capitalizing on the fact that people need them to do what they need to do. Blockchain changes this in a big way and opens up a whole new world of a potential and new way to generate wealth among us. The land of big banks and big tech is at risk, but I think that is a good thing and something to look forward to.
Silicon Valley In A Panic
Silicon Valley (and other) companies have made applications for everything. The two examples below are also at risk for blockchain disruption.
- Uber/Lyft — ride share apps that charge a fee to provide on-demand car service anywhere. At a high level have essentially made the lives of the rich and privileged that much easier
- AirBnB — a home sharing app that allows owners to rent out their homes for a short or extended period of time for profit
You can easily encode the transactional information for rides or stays and boop, these guys are gone.
Our favorite SV startups are rapidly working to figure out how to disrupt the disrupter.
And, no, I didn’t forget about Facebook.
Facebook Libra And Big Tech Implementations Of Blockchain
For months we knew Facebook was working on a blockchain project as news of hiring a blockchain team, littered our daily readings. Yesterday, it was announced that Facebook has launched its own cryptocurrency — Libra.
The intent of Libra is to be a new digital currency that will be available to people without bank accounts or credit cards. The premise is that many people overseas and in developing countries do not have banks, but do have phones and internet. Money can be received in the form of Libra, and then spent as Libra as well. Likely users will pay fees, although it will be cheaper than other non-bank options and discounts for paying in Libra are likely.
Let’s pull on this thread for a second thought. Sounds a lot like PayPal, Venmo, and other centrally managed payment mechanisms. Well, that is because it is.
What we have here is a centralized payment system. The transactions are maintained by a permissioned (centralized) database that cannot freely transact with non-whitelisted endpoints or fiat gateways in any truly meaningful way. The backend is similar to a money market fund, while the front end is a payment processor.
AliPay and WeChat have already done this and facilitate true Bitcoin liquidity, without creating their own token, because creating a token or currency isn’t necessary.
Facebook is using blockchain in a centralized way, which defeats the purpose of a decentralized future. Why though? Facebook and other companies make their money off of their users and their information. This is another way for them to gain more access to that information and sell it for profit as they have always done. Their true business model has not changed. This is their attempt to disrupt the disrupter but in an unoriginal way.
Facebook is plagued with privacy issues over the last decade regarding users’ information, so naturally, their next step in their journey is to proceed as a centralized custodian of digital assets. Whispers about clauses and carve-outs around users’ personal data are everywhere, likely meaning that anything you do on Libra can be shared with Facebook with their use and ultimately profit.
The outward premise seems good, providing a means for unbanked people to have access to money, however, the core premise is another way for Facebook to make money off its users and their information.
We can save the fact that is not government backed or regulated in any way for another time.
Why It Is Important To Consider How We Show The World The Viability Of Blockchain
Using blockchain in a centralized way, and for-profit defeats the purpose of using blockchain, to begin with. Any negativity that surrounds in-genuine use of the technology only hurts the process of mass adoption and the way for a decentralized future. Granted, this has the potential to increase Bitcoin usage and awareness, but at what risk to the users? At the end of the day, that is who all of this is about.
It is important for the companies and individuals implementing blockchain solutions and initiatives to really stop and think about if the use cases, and applications, and industries are truly doing the technology service. It is not just another way to do something that is similar to the way we already do it. Solving business problems is essential for the vision, but it should not be the focus. Blockchain gives way to the people and can create a new generation of wealth and prosperity, where we are not at the mercy of large corporations that profit off of us. Technology is cool, but only if we use to help humanity.
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