Have you heard of the blockchain? Chances are you have not and you should.
This technology is likely to have the greatest impact on the future of technology. It is the underlying technology of currencies like the Bitcoin. Bitcoin is an asset and can be speculated upon, it is a crytocurrency and not a fiat currency controlled by a state.
The internet has democratized information by affording us the ability to send copies of information to anyone who needs it and has access. Fantastic for documents, bad idea for assets, or art, or votes, identity, energy…hopefully you get the idea.
Middlemen like banks and intermediaries perform functions to keep us from sending duplicates of ‘money’ and that is a good thing, however, those institutions are prone to hacks, corruption, and privacy violations. These institutions have appropriated the instruments of wealth distribution. We have wealth creation but growing social inequality. Here is where an internet of information becomes an internet of value.
If we removed the intermediaries and created a native platform for value, we could conduct transactions without a third party. Trust is established in peer-to-peer transactions through crytography, collaboration and clever code. Digital assets are distributed across a global ledger, with copies existing on millions of computers called ‘miners’, many times more powerful than all of Google. Transactions become part of a block time stamped and entered into a chain of other blocks – thus, the blockchain. Hacking becomes impossible because any manipulation requires changing all the blocks preceding the initial transaction, across millions of computers using the highest level of encryption.
Other applications include replacing the stock market and creating accountability for politicians.
The first generation of the internet brought us wealth but not shared prosperity. Don Tapscott thinks this is the next generation of the internet.
Corruption may be on its way out with blockchain. For example, land titles are frequently usurped by corrupt governments but once registered on the blockchain, that title is held in perpetuity. Shared economic services like Uber or Air BnB may also be disrupted as the block chain can handle payments and information. Remittance offices like Western Union charge an obscene amount to make transfers that often people of little means use to send money to their loved ones. The blockchain can move value at as little as 2 percent.
Working like breadcrumbs, the virtual perpetual memory of the blockchain can remember your virtual identity and to do it all anonymously.
Privacy is the foundation of a free society. Let’s also make it a fair one.