The following opinion piece on blockchain technology was written by Alexander Borodich, CEO Universa.io, futurologist, and Forbes contributor
Just like any other phenomenon that happened to be in the public eye or the subject of hype, the blockchain has been fleshed out with legends and interpretations and they are often far separated from reality. Many still think that blockchain and Bitcoin are synonyms and that they are just another pyramid investment scheme not worth paying attention to.
A conservative approach is a natural defense mechanism against everything that’s new, even if it helps to save energy, time and resources. But what if that approach is wrong? There are those who believe in the blockchain and think of it as progressive a technology as smartphones once were. What if they’re right? What if this technology will change our lives as Internet once did?
There’s no need to get down to brass tacks. Some general insight into the blockchain and its advantages is enough. There is an analogy between the blockchain and The Matrix movie from 1999: “Welcome to the real world, Neo.”
Different nations have tried to come up with various solutions for the exchange of goods that were necessary for trade. While the advantages of gold and silver ensured their supremacy for millennia, the cultures that had no access to them managed to find some extraordinary solutions. For example, in Micronesia, they considered Rai stones (huge stone discs) a currency. Verbal legends about origin and history of the stones’ owners were often attributed to them. Deals were conducted verbally and did not require relocation of the stones. Every new owner had to mark a stone as his, so the whole history of ownership was on the stone.
The stones are often called prototypes of the blockchain. But of course, that’s quite an assumption. The true conditions for the advent of the blockchain included the development of the Internet and growing computing capacity of modern devices. Of course, the invention of the idea required someone who would come up with it and be able to bring it to life. Alas, the true creator of the blockchain is shrouded in mystery, just like the names of those who turned Rai stones into currency.
For some time after its invention, the blockchain was popular with a very tiny number of people. These people were not taken seriously. They were laughed at. But they never gave up believing in the technology, and they kept developing it and promoting it. In fact, there was an understanding of the intrinsic possibilities of the blockchain from the beginning. So it wasn’t some irrational belief but was, rather, common sense.
Our everyday life is tied to documents and data. In our world, we need people or organizations that can manage money and documents, verify our identities, manage copies, and verify those. Imagine the world without these services. That is a world without banks, notary officers, state agents to register different events, election committees, broker’s offices, and lots of others. It is a world where we can trust a system built on a proven technology and not on the human element.
It’s probably not your first time hearing the blockchain is a distributed database on bitcoin.com, but we can put it even more simply: the blockchain is a database that is stored on a great number of separate Internet-connected computers at a time. This technology was first implemented with Bitcoin, but it has now traveled and expanded far from the cryptocurrency. Tens, hundreds, even millions of computers all over the world, as well as cryptographic security systems, ensure the reliability and safety of the data.
The blockchain is based on three key principles: distribution, transparency, and security. It allows the storage of data relating to ownership, credits, marriage registrations, traffic offenses, and all other more or less meaningful events. Among the obvious advantages of the blockchain are cost, speed, and simplicity.
Cryptocurrency as the Killer App
The first and probably the most provocative sphere of application for the blockchain is cryptocurrency. Winter 2017 Bitcoin futures appeared on several leading U.S. stock markets and inspired Wall Street’s investors. That means cryptocurrencies became an investment tool. Many conservative investors believe that cryptocurrencies are a kind of bubble and that the bubble’s growth puts the consistency of the entire world financial system at risk. However, one can’t deny the fact that this has already happened. The cryptocurrencies are now accepted by millions of people and lots of organizations, including the world’s leading corporations.
Blockchain Use Cases
The blockchain is being triggered by investors and crypto-enthusiasts:
1) in the granting of loans, excluding the risks of scam and mortgage fraud.
2) in the field of deal registration with real estate, vehicles, and everything that has to do with documents, certificates, and rights.
3) during the elections. Public blockchain can be analyzed by a user to track his vote.
4) in smart contracts in various fields, including logistics, retail, management, and justice, which allows people not only to increase the trustworthiness of payments and deal confirmations, but also to reduce the timeframe of all these processes. It sounds complicated, but it can be understood by anyone. Just imagine that you enter a shop in Manhattan to buy an iPhone X. If the shop’s logistics are blockchain-based, you’ll only need to scan a barcode to see the whole chain of the product’s movement on your phone screen all the way up to the store shelf. The data in the blockchain cannot be changed. The same process can be used for any other type of goods. Isn’t it great?
5) for providing a country with government services. Estonia has already launched the blockchain-based electronic citizenship system. Finland employs the blockchain to identify refugees.
6) In gaming ecosystems with Blockchain-based technologies, users will be able to buy and sell various in-game items with tokens, which will make it easier to buy and sell items from different gaming projects. You know if you want to sell or exchange an item you purchased, this is going to be an issue. Gamers will sell, exchange, or buy items they need with universal tokens. This will offer truly exciting possibilities for millions of users all over the world. Experienced gamers will be able to have their own business and regular income and make the time spent in front of a computer, or console, or with a mobile device work on them right.
During the year 2017, the cryptocurrencies’ worth has grown from $17 up to $750 billion. One of the founders of Ripple, Chris Larsen, became richer than Mark Zuckerberg and Sergey Brin. We can see how the blockchain, which cannot be controlled or influenced, turns from an abstraction into reality right in front of us, changing the world financial system as it evolves. Cryptocurrencies take away the monopoly on emitting fiat money from national banks, creating a revolution compared to the transition from gold and silver to paper currency and to e-payments afterward.
More likely, we are in the process of some kind of a mental revolution, because we can already observe a reality previously considered impossible. Cryptocurrencies challenged the world financial system, and no restrictions can make them extinct anymore. Legislators in different countries have to choose their seats in the new matrix. If you take the blue pill, the story ends, you wake up in your bed, and you can believe whatever you want to believe. If you take the red pill, you can stay in Wonderland and see how deep the Blockchain hole goes…
Do you think people will awaken to the new matrix? Will we begin undermining the fiat system and grow this new decentralized money system? Let us know in the comments section below.
Image courtesy of the author.
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