Blockchain will destroy your Industry and take you with it

The Internet of Information is Dead. Long Live the Internet of Value.

There is one thing I dislike more than anything is ignorance in people that look for problems to every solution or trash an idea or new concept without bothering to find out and learn… Jumping to conclusions on limited data and coming up with the wrong answer…

We are entering a phase that no matter how ignorant people, organisations, industries with or without them we will see a profoundly impact the way we do business, interact and broader society…

Blockchain isn’t a fad (it is the next coming) and it is in fact heading to mainstream very fast where things like The Internet of Things, Artificial Intelligence, Machine Learning and Augmented Reality and Virtual Reality are starting to accelerate the use of Blockchain as the Record of Everything allowing the entire world to be programmed.

I really like the expression Certainty as a Service…which is why Governments, Central Banks, Trading Exchanges and consortia (R3, Consensys, Chain) are on the Blockchain journey… Only this week the Bank of England set up a Lab, The Dutch Government announced a commitment to Blockchain and Nasdaq have extended their relationship with Blockchain to handling post trading activities amongst many others.

We are stuck in the 1970’s…

Although I am one of the few who love the 70’s, especially the rock music, coloured denim, California dreaming, it is time to move on… Many people marvel at the perceived technology progress of the past 20 years without realising it could be so much better, faster, easier, cheaper and change our relationship to things. To and with other people and enlarging events as an enabler to get so much more from our very existence, to get more out of life itself...

Marc Andreeson of Andreessen Horowitz mentions how Moore’s Law is not only inverting as technology (processing) is essentially becoming free, rather than every 18 months processors double in performance at the same cost. As a successful investor he argues we already get processing for free, iCloud, DropBox and Google all provide storage and computing for free and this trend will accelerate the impact…I will discuss later.

The Internet is currently the basis of how most people do business, in a sense it is the backbone of 21st century commerce. And yet it is old, antiquated and presents a far greater risk to us all. The Internet of Information arrived after a slow start in 1994… It is time for a re-boot of the OS!

The problem is this...

Not only is the Internet and most of our computing based on 1970’s architecture it (the Internet) is far too open and allows the publishing and copying of content (stealing in some cases) that destroys value and negatively impacts peoples lives. Think music industry where artists get screwed by everyone and lose control of their ‘value’…

On the Internet it is impossible to establish Who, accurately identifying the people we are really dealing with, as the architecture does not allow transparency and privacy always at risk. Built as Client and Server with mostly centralised technology systems the Internet is controlled and manipulated by people, large organisations and governments and global trust between people and nation states is now an all time low.

Hacking, Phishing, Cyber Crime is a global multi billion business as our personal information is freely copied, sold or stolen as organisations are not accountable to protecting it… Most organisations are incapable of protecting our information as new avatars of use appear online controlled by the likes of Facebook, Amazon and Google…

The Internet’s limitations spawns inefficiency requiring business processes to spend huge time and effort to identify people on each end of a transaction, and as a consequence entire industries comprise layers of middlemen provide this service, creating friction, increased cost and time delays. Think Banking, Insurance, Music, Travel, Healthcare and and…

Well its all about to change, the Internet is being Upgraded, it is called the BLOCKCHAIN…

It has been long overdue but the Internet is getting an Operating System upgrade and will emerge as the Internet of Value or what many call the Second coming of the Internet…

Others including Joseph Lupin founder at Consensys mentions that Blockchain is the biggest advance in Computer Science in 60 years…a breakthrough technology to restore order, trust and close the inequality gap…

So what do we get with this upgrade…

We get the return of TRUST and CERTAINTY delivered via automatic verification of the other end (of the transaction) with whom we want to do businesses, where the Blockchain makes signing and agreeing terms much quicker… A transaction that is encrypted and decrypted using asymmetric cryptography and hashtag that has been around a while now. I should mention at this point Blockchain isn’t using new tech, it is applying different principles to storing and validation transactions using a distributed database(s). It is a new architecture for technology and society.

Everything moves to Peer 2 Peer. With Blockchain there is no centre. The network provides verification and consensus on what is a good trade (transaction) with no middlemen in sight adding friction and time cost and eroding trust.

Triple Entry accounting as the Ledger of Everything (records all transactions) that sit on the Blockchain providing one version of the Truth, increasing transparency as a permanent digital record that cannot be changed after the event.

Evolution of the Internet from Client Server to P2P where every node on the network is both client and server, massively scalable and secure, a global virtual machine to ‘program the world’ discussed later as AI accelerates everything.

Things are happening quicker… There at least 80 versions/approaches to Blockchain that I am aware each trying to create a better version with most focusing on scale and Transactions Per Second throughput that will take the brakes off…

Bitcoin
Bitcoin came first 3 January 2009 offering effectively programmable Money offering a limited scripting language that takes 10 minutes to Verify the transaction started live 22 May 2010. Transactions sat on the Blockchain.

Ethereum
Ethereum came out of Blockchain in Nov 2013 when a young chap Vitalik Buterin creates a rich Turing complete programmable language as Ethereum offering a faster version of Blockchain with 15 second validation going live 30 July 2015.

DOA
The DOA came next as Distributed Autonomous Organisation based on a community supported digital entity (a business with no people) organized around Schelling points of functionality (essentially game theory) delivering transparent governance.

Smart Contracts
Smart Contracts is a term invented by Nick Szarbo in 94’ which is essential ‘active code’ that enforces contracts sitting on the Blockchain. That mitigates losses and forgery and has massive uses to support IoT and M2M (Machine 2 Machine) transactions as digital devices negotiate terms.

Lots of very smart people are working hard to improve the underlying Blockchain technology in terms of speed, efficiency and solving real business problems I have discussed in my earlier articles. Each is trying to create the dAPPs – distributed applications (algorithm’s) that store, authenticate and verify that can be plugged into a User Interface.

Solutions

Solutions are coming and fast. The immediate focus on simplifying the industries where the ‘middlemen’ add no value that has the effect of collapses markets and removes 50% to 90% of the non value added costs.

The first wave has seen Industry Platforms that deliver disruptive movements in areas such as Remittance and FX, Trade Finance, Energy Trading, Insurance, Micro Transactions, Capital Market Settlements and Clearing, Compliance Monitoring to name a few…

Programming the World what is coming next…

I am excited by what lies beyond Blockchain and the new age of Autonomous Assistants that help us live a more productive life. I have been a fan of Amazon Echo for a while now and how the new Internet upgrade will create one huge Virtual Machine that will enable massively parallel processing to support Deep Learning and AI relying on new GPUs to drive AR and VR that open up new possibilities to solve world problems, improve health and lifestyle and open up new interfaces other than Smart Phones…

The Internet is Broken. The Internet of Information is Dead. Long Live the Internet of Value. Welcome to Blockchain.

© Digital BOOM 2016

© Author Nick Ayton

Twitter @NickAyton