So what’s the deal with blockchain? I hear news about blockchain technologies in fits and starts but what is it really all about? And is blockchain really as important as some of the claims being made against it? For example, is blockchain as important a technology as the Internet itself? According to the IBM blog, “blockchain is poised to change how people do business by offering trust.”
By design, anything recorded on a blockchain cannot be altered, and there are records of where each asset has been. So, while participants in a business network might not be able to trust each other, they can trust the blockchain. The benefits of blockchain for business are numerous, including reduced time (for finding information, settling disputes and verifying transactions), decreased costs (for overhead and intermediaries) and alleviated risk (of collusion, tampering and fraud).
This post is part one in a series. I’m posting my research as an outlet to teach myself and others about blockchain technology. If you have any recommendations for resources I should consider please leave a comment below.
I just signed up for earn.com which is being touted as a replacement for email. It appears that I can use the platform to earn money via blockchain, which is a method of recording transactions that’s inherently secure by design.
The platform does seem fundamentally different than email however as you can use it to charge people for your time and professional advice. For example I could charge somebody $20 to review a proposal or reply to a request. That being said, the platform is marketed towards business professionals.
Earn hopes to tackle spam by bouncing unsolicited emails back to the original sender and giving marketers the opportunity to pay to reach you. Currently there’s a Gmail integration feature available that allows one click to bounce emails.
The feature does seem a little convoluted and I may end up disabling since I cannot locate the “earn” folder in Gmail that claims to have been set up already.
So what exactly is blockchain then? I watched a number of videos on YouTube and read several whitepapers and found that it generally works like this:
- Blockchain is a technology that drives Bitcoin and is based on creating digitial signatures or hashes.
- Blockchain is in its infancy and won’t be fully accepted into our economic and government structures for about a decade.
- Blockchain facilitates trade and at the same time removes the middleman. For example think eBay whereby two parties can negotiate directly.
- Blockchain is essentially a ledger that keeps track of transactions. The ledger entries are stored on hundreds, thousands or tens of thousands of computers.
- Blockchain uses cryptography at its core to link and secure records, AKA blocks.
- Each block contains a hash value (digital signature) and also contains the has value from the previous block. Each block also contains a timestamp and the actual transaction data.
- If an attempt to change the data is made the entire blockchain will have issue with that as this means the modified data would now have a new digital signature (hash value).
There is a great deal of promise around Blockchain in ways we cannot yet fathom. Think of what’s happened over the past decade. In 2007 things were much different than they are today. In fact smartphones weren’t widely accepted until sometime after 2010.
Ethereum Blockchain Platform
Ethereum is a blockchain app platform invented by Vitalik Buterin. And according to the site’s description, “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”
Developers and computer programmers can use the Ethereum platform to build applications with blockchain as the foundation. Developers could create markets, store registries of debt or promises, move fund in accordance with instructions given long in the past (for example a will).
Not only could businesses leverage the Ethereum platform but democratic organizations could be formed here that are essentially run by robots that are immune to outside influences. I really like the idea that I could build my own country with an unchangeable constitution! I might start a little smaller and build my own city first though. I find city politics and legislation to be more dynamic and personal in nature.
Dubai is already thinking to the future and seriously considering blockchain to manage government services. A report from WSJ states that “the goal of Dubai’s government is to conduct a majority of the emirate’s business using blockchain, which it expects will make government services more efficient and help promote enterprise in Dubai as it will become easier to do business there.” As part of their smart city initiatives, the goal is to make Dubai the first blockchain-powered government in the world by 2020.
The Ethereum site recommends checking out another site called State of the DApps. Now what exactly is a DApp — you’re probably asking. Well the D stands for decentralized so its a decentralized application so basically one built with blockchain in mind on a decentralized peer to peer network. The State of the DApps site boasts 877 decentralized apps right now. Anyway that’s a lot of apps in its own right so I’ll leave you all to it to browse through that one.
And fast forward a couple of days and I’m back to earn.com to take a look and to be honest I don’t see much going on nor much of a reason for me to return to the platform in the future: read “tumbleweeds”.
Bitcoin is considered to be the first decentralized digital currency. With Bitcoin two parties can complete a transaction without the presence of a middleman such as a bank. According to Wikipedia, “these transactions are verified by network nodes and recorded in an immutable public distributed ledger called a blockchain.” Lately you may have been hearing a lot of speculative hype about Bitcoin with the valuation sitting at $300 billion according to Coin Market Cap
Now there’s a lot of hype around Bitcoin over the past few weeks so that being said it’s probably not the best time to buy when that’s the case. I would recommend waiting for the next crash as the old adage applies to this just like any other asset – “buy low – sell high”.