Blockchain and Revolution
There exists in this world today a certain technology that is expected to have the greatest impact on industries as we know them in the next few decades. It is not social media, big data or even AI. You will be surprised to learn that digital currencies like Bitcoin are at the heart of this technology. This particularly technology has only recently gotten popular and is known by the name, “blockchain”. It is not the most melodious sounding word ever, however, it is what will be taking the Internet, as we know it, forward and onward onto new ventures. It holds a great promise for every business, society and the people that live in it. We have had the internet of information for the last few decades and everyone knows that when an email or a PowerPoint file is sent, for example, it is not the actual file that is being sent but merely a copy. This is known as democratized information and is a great step forward when it comes to assets such as money, financial assets such as stocks and bonds, loyalty points, intellectual property, music, art, voting, carbon credit and other assets that work with the sending of copies. This, however, is a very bad idea. When one sends a hundred dollars, it is really important that one does not have the money anymore and can not send it to someone else. This has, for a long time, been called the problem of ” double spending ” by cryptographers. Today, we rely entirely on large intermediaries such as banks, government, large social media companies, credit card companies, etc. to build confidence in our economy. These intermediaries facilitate all business and transactions of all types of trade, from authentication and identification of persons to clearing, settlement and registration. They do a pretty good job hand in hand.
There are, however, increasing problems. They’re centralized first and foremost. This means that they can be hacked, and JP Morgan, the US Federal Government, LinkedIn, Home Depot and others have recently found this difficult. In addition, billions of people, for example, who do not have enough money to have a bank account, are excluded from the global economy. They’re also slowing things down. It may take a second for an email to go around the world, but it may take days or weeks for money to move across a city through the banking system. In addition, they take a large part of the action, especially between 10 and 20 percent, just to send money to another country. They collect our data and that means that we can not monetize or use it to manage our lives better. Our privacy is undermined, and the biggest problem is that they have asymmetrically appropriated the vastness of the digital age: we create wealth, but social inequality is growing. So what if there was not only an information internet, what if there was a valuable internet, a vast, global, distributed library that runs on millions of computers and is available to everyone. Where can every asset be stored, moved, transacted, exchanged and managed without powerful intermediaries, from money to music? What if there was a native value medium? Well, in 2008, the financial industry crashed and perhaps an anonymous person or individual named Satoshi Nakamoto created a paper in which he developed a digital cash protocol using a cryptocurrency called Bitcoin. And this cryptocurrency allowed people to trust and trade without a third party. And this seemingly simple act created a spark that set the world on fire, that everybody was excited or frightened or interested in many places.
Now, don’t be mistaken for bitcoin. Bitcoin is an asset; it goes up and down, and if you are a speculator, you should be interested in it. Generally speaking, it’s a cryptocurrency. It is not a fiat currency that a nation state controls. And that’s more interesting. But the real pony here is the technology behind it. Blockchain, it’s called. So people can trust each other and act peer-to-peer for the first time in human history. And trust is established, not by a large institution, but through collaboration, cryptography and a clever code. Now, you probably ask: how does this work? Fair enough, fair enough. Assets like money for music and everything between them are not stored in a central place, but distributed over a global library using the highest cryptographic level. And if a transaction is carried out, it is posted on millions and millions of computers worldwide. And there, around the world, there’s a group of people called ” miners. ” They are miners of Bitcoin. They have a massive computer power, 10 to 100 times greater than all Google in the world. These miners work a lot. And every 10 minutes, like a network’s heartbeat, a block is created that contains all the transactions of the last 10 minutes. The miners then work to solve some difficult problems. And they compete: in the case of the Bitcoin blockchain, the first miner to find out the truth and validate the block is rewarded with Bitcoin in the digital currency. And then, this is the key part, the block is connected to the previous block and the previous block to create a block chain. And everybody is timed like a digital waxed seal. So if I wanted to go and hack a block and, say, pay you and you with the same money, I would have to hack that block, plus all the previous blocks, the entire history of trade on that blockchain, not just on one computer, but on millions of computers at the same time, all using the highest levels of encryption, in the light of the world’s most powerful computer resource. This is infinitely safer than our computer systems today.
So there’s not just one Bitcoin blockchain. There are many of them. The Ethereum blockchain has been developed by Vitalik Buterin, a Canadian. He ‘s 22 years old and this blockchain has some great skills. One is that you can build intelligent contracts. It’s something like what it sounds like. It is a contract that carries out itself and the contract handles enforcement, management, performance and payment-the type of contract also has a bank account-agreements between people. And today, on the Ethereum blockchain, projects are underway to do everything from creating a new stock market replacement to creating a new model of democracy in which politicians are accountable to citizens. Let us look at one industry, the financial services, to understand what a radical change this will bring. Goldberg Rube machine is a ridiculously complicated machine, like cracking an egg or shutting a door. Well, it reminds me, honestly, of the financial services industry. I mean, you tap your card in the corner store, and a bitstream travels through a dozen companies, each with its own computer system, some of which are 1970s mainframes older than many in this room, and a settlement takes place three days later. There would be no settlement with a blockchain financial industry, because payment and settlement are the same activity, it’s just a change in the stock market.So Wall Street and the financial industry around the world are in a great upheaval about this, wondering whether we can be replaced or how do we use this technology to succeed?