“Talent hits a target others can’t hit, Genius hits a target others can’t see.”
– Arthur Schopenhauer
The sentiment surrounding Bitcoin has transformed. It has gone from being known as the anonymous payment mechanism to facilitate illegal transactions, to a speculative digital bubble with no intrinsic value, to what industry leaders are now calling the greatest and most disruptive technological breakthrough since the Internet.
The paradigm has shifted; entrepreneurs and world-class venture capitalist firms are teaming up to improve the efficiency and effectiveness of this new payment ecosystem through:
• online exchanges
• single-signature wallets
• multi-signature wallets
• merchant integration services
• B2B enterprise solutions
• mobile user applications
So far, what has been built is a secure and effective means to “pay” someone else without the need for a third party. It is simply a global transfer of ownership mechanism using a mathematically distributed digital asset that is growing in scarcity because of an increase in the awareness of its namespace and purposiveness. It is a decentralized peer-to-peer (P2P) transfer of ownership protocol using a timestamping mechanism, and ultimately, it works.
The underlying technology that facilitates the transfer of Bitcoins, the blockchain, the namespace not in the headlines, is what will transform almost every domestic and international vertical market. The blockchain is intrinsically powerful in that it is the backbone of this new type of open source, verifiable, distributed mechanism of transfer and record. It is the “third-party” that is needed in so many of our current trust base models for various services. It is the “universal balance sheet” used to record and verify the most recent state of various digital ownerships.
The blockchain is the foundation for so much more than just a payment network the same way the Internet is the foundation for so much more than just e-mail. If the blockchain is what’s important, then “Bitcoin” is simply the global onloading mechanism. It is the first tier, an introduction to a new age of what is possible through decentralized networking and computing.
Tier 1: A Decentralized Digital Currency and Payment Network
• Why is Bitcoin being developed in the form of multiple online exchanges and wallets based on geographical location and currency?
• What if there was one was global exchange that allowed anyone to buy and sell any form of digital or physical asset regardless of location in world?
• How could a global asset exchange such as this increase the security, transparency, and efficiency of global finance and trade?
Tier 2: Decentralized Networks and Development Platforms
• Why are digital currencies the only things being built up on top of this blockchain technology?
• What if anything that could logically be expressed in code could be implemented on a blockchain?
• How could this type of network and platform be adopted by the global economy?
This concept has the namespace of “Ethereum”, “Eris” (on Ethereum), “Colored Coins”, “Smart Contracts”, “Bitcoin 2.0″, and “Sidechains”.
The crux of this whole phenomenon is that “Bitcoin” is a currency application to the blockchain.
Ethereum wants to make it so ANY type of deal, organization, service, or system, can be decentralized. It just requires the parties involved to set the parameters expressed in code. So what will be built on top of the Ethereum network for consensus verification?
Third-party Trust Models
• Real Estate escrow between parties can be implemented using multi signature contracts
• Insurance Policies can be engrained in the blockchain
Digital Commodity Pricing
• Commodities pegged at consensus-aggregated value
Weather Based Contracts
• Contract premiums based on season conditions
• A Farmer makes an insurance agreement based upon rainfall data
File and Data Storage
• Proof of Existence on Bitcoin Blockchain
• Dropbox / Box type cloud storage
• Enterprise storage, buy space from others on the network
Smart Contracts and Escrow
• Hedging accountability
• No option of default
• Multisignature to set proportional abilities on access to assets given certain number of keys
Private Keys to Share Economy Assets
• Home and Apartment Leases
• Home and Apartment Keys
• Hotel Keys
• Car and Ride Leases
• Car and Ride Keys
• Autonomous Vehicles
• Autonomous Vehicles
• Safety Deposit Box Keys
• Package Delivery Keys
Permits to Controlled Assets
• Timestamped verifiable access
Audit and Financial Services
Gambling and Betting
• Proof of a Bet
APIs with Global Mobile Banking
• Timestamped Verification
Patents, Copyrights, and Trademarks
• Timestamped Intellectual Property Rights
DAOs (Decentralized Autonomous Organizations)
• An organization run and bound by code
• First to exist
• ICANN Replacement
• Laws consensus driven
Voting Systems and Records
Online Identification Systems and Records
Incentivized Truth Consensus Crowdsourcing
• Range of n inputs for a sought after accurate condition or state of n, correct answers is rewarded x
What is actually enabling individuals to trade any amount of Bitcoin regardless of their location in the world is… “mining”. The cryptographic time-stamping mechanism that replaces centralized authority with community consensus. The blockchain needs miners to survive. It needs nodes to verify valid blocks with valid transactions. But what if the mining becomes centralized thus, Bitcoin becomes centralized? It is now self-evident to anyone who has been following the development of this cryptocurrency that the “mining” and “the blockchain” is what really matters.
The incentivized mining mechanism is what should make this ecosystem thrive, not the companies building a new type of wallet or security feature. User adoption isn’t people buying up, holding and dumping after a price increase, it’s about people mining, becoming another node therefore increasing the security and transaction volume capacity of the network. It’s them realizing they can be part of a truly empowering decentralized global network. The network effect is what makes this technology powerful, its functionality as a type of distributed consensus technology increases overtime.
So the Bitcoin blockchain is being “mined” for a currency because it’s catching on, people are starting to accept it, online and offline. There is incentive. For all of these other future blockchain applications to work, you need people to mine “ether” from the Ethereum blockchain. I don’t know if I will be able to spend “ether” anytime around the corner but the important thing is that if given the right incentives, a blockchain has the potential to become very powerful.
Create incentive for people to decentralize a type of process:
Create a platform that allows people to decentralize any type of process:
Additional Reading on this: