Rev stands for Review, and Revolution
Mainstream naturally gaining technical knowledge
While many mostly focus on the adoption and prices of the blockchain ecosystem applications, we lose sight of yet another side effect of this crypto revolution/era: a path to improved ways of doing things. Those new ways were possible for a long time, but the path was missing. Most cryptography technologies existed before the blockchain arrival, but many daily procedures were not leveraging them, mostly due to the level of technical sophistication required for the average person. So far at least. As mainstream gets involved in the attractive blockchain world, one way or another, awareness of the digital possibilities is accelerating at a fast pace (regardless of the market trends). The next sophistication will be another standard.
Cryptographic signatures
Soon, everyone will know what public and private keys are. While it seems no big deal, this is actually one of those details that we tend to forget, as to how mainstream incorporate new concepts in the first place, that is, without official education in schools or common studies. This is a brute acceleration of knowledge injected in the wild, and that opens the doors to so many new ways of possibly doing things more efficiently. Let’s get a bit more concrete.
Physical individual signatures are so imperfect. They can easily be copied, falsified, or removed. Blockchain didn’t invent cryptography. A more efficient system of signatures could have technically been in place for a long time. The immature process combined with lack of awareness made it out of the question, thus far. What blockchain does, however, is filling the gap between a technical process and user application. Digital (crypto) signatures are not far down the road. As an example, today many funds are cryptographically signing their digital wallets for audit purpose, and all this within the regulatory framework. Even auditors that were not necessarily tech-savvy, understand now why it makes sense to accept such procedure. See an actual output here from Cohen & Co as an example.
Make no mistakes, I am not talking about the digital signature draws here, which can be easily falsified or reproduced. Well, at least they have the merit to be more convenient, so it is one step better than typical signatures. However, I am confident less than 10 years from now, we will be using cryptographic signatures for most of our paperwork (assuming the corresponding identity layer is mature enough by that time). We might not call it cryptographic signatures, we may not see the complex strings of characters similar to Bitcoin addresses, but it will likely be used as an underlying protocol. It makes sense, and Blockchain is getting us there much faster than we think.
Voting system
In the same manner that of signatures, we all know voting could be improved significantly. I’m going to leave off the part of all the current flaws which are obvious and known for the most part, and just mention what blockchain brings on the table.
Transparency and convenience are the key missing attributes of the current system. Blockchain solves those issues via:
The ability to vote from anywhere on a phone or computer
A public ledger accessible to everyone, and absolutely immutable
However, the lack of a mature 2nd layer identity remains a gap in the realization of a fully transparent and honest voting process.
Digital secure identity and access
An identity layer would serve as a sort of attestation that a specific network public address (let’s call this a digital account) belongs to a unique physical person. It would unsure as well that only one digital account per physical person can contribute to a particular voting/election. Basically, the identity layer would be a true end to end bridge to reflect our physical identity into a digital identity, so that typical public functions can be performed online.
Without going into greater details, it’s worth mentioning several projects working on such identity layers;
One of the early projects to tackle the challenge of identity on blockchain (specifically Ethereum) was uPort, by ConsenSys, consisting of “ identity and messaging protocols that together form an interoperable identity layer for the decentralized web.” The process has been slower than expected (this effort started in 2016), that being said an identity wallet (unofficial) is now available for download in the mobile stores. It is however too early to tell if these developments will be sufficient for the main scale functions as mentioned above — probably not, since technologies evolve with waves of improvement until they become robust enough for the mainstream.
Another small but notable effort comes from the Byteball project, via decentralized bots that are able to provide attestations of identity (KYC) and others that are not in the scope of this topic. It is worth keeping an eye on this one.
A more globally innovative development is in steady progress by Iampass, this one utilizing the IOTA underlying protocol. If we, as humans, could become our own password for everything, this one has the potential to truly revolutionize our daily life. Their mission is simply “become your own password”… via “Reliable biometric authentication based on palm vein pattern recognition combined with decentralized trust on IOTA”. Strongly recommended to just follow on Twitter. Before closing on this one, I will add the basic question for you: why do we need a blockchain for this? How does it help at all?
Well, if and when you can use your palm vein information to identify on every app, you probably don’t want the app to have your palm vein information. And if we assume that several actors would take on the role to store the info, independently of the daily apps, You wouldn’t want a third party to own this either. We saw what happened with social security numbers being hacked, and we generally want to improve our security and privacy, not step back.
IOTA will serve as an infrastructure that no one owns and that is trustless. On top of that, Zero-Knowledge protocol will be used for the sensible information, which means no one can have access to it, no one will even know that your information is somewhere there to begin with, unless you choose so. More specifically, “zero-knowledge proofs let you validate the truth of something without revealing how you know that truth or sharing the content of this truth with the verifier. This principle is based on an algorithm that takes some data as input and returns either ‘true’ or ‘false’.” Related note: for the more technical folks, I just came across iden3: new SNARK tools for an identity system from Jordi Baylina.
Companies
Decentralized organizations are another interesting development. What if we could forget the painful paperwork, and simply create a complex structure (with shareholders, specific voting mechanism, specific permissions/rights, and other) in a few steps online, from your Ethereum public address or another such account?
Aragon is one of the best promises I have seen in this regard. “Aragon Network will be the first community governed decentralized organization whose goal is to act as a digital jurisdiction, an online decentralized court system that isn’t bound by traditional artificial barriers such as national jurisdictions or the borders of a single country”.
Simply put, this is yet another area of possible world disruption that DLTs could enable, this time at the organizational level, aiming for borderless and fully digital organizations, a new type of jurisdiction that comes with simplified yet customizable and international properties.
Going public made easy — I met recently a successful entrepreneur, who was on the verge of eventually going public the traditional way. He shared with me some of his obstacles about this, and his conclusion was a no-go for now. Going public is a tough process, requires that you concede much of your shares in the company and that you devote an unquantified amount of time. Well, anything painful today is another potential use case of a DLT application. Something like Polymath enables a company to create a security token with full regulation and control. As mentioned on their website, some of the advantages of such a procedure are:
Programmable equity (issuance), and creation of security in minutes
24/7 access to markets
Elimination of middlemen (and therefore less paperwork (read zero), less time consuming)
Access to a new audience (unbanked, and raising in cryptocurrency)
Conclusion
So here again, we briefly touched on the notion that the blockchain infrastructure, when used properly or in conjunction with subsequent layers, can transform, for the better, the very foundation of our traditional procedures, via strong value properties that are inherently part of the future infrastructure. This effectively removes the need for us, humans, to constantly solve problems growing from our own natural imperfect behavior.
Above post contained just a few examples of DLTs applied use cases. I wrote a separate add-on for the ones looking to use and test some applications today.
As always, I remain open to fair modifications and suggestions. Please remember that the scope to cover is so wide, that this should be considered nothing more than a thin extract of the world forming as we speak.
I leave you with a piece of speculation, not price wise, but about usage. Cheers.
Bitcoin future usage, speculation
One possible outcome may very well be that the longest chain ever such as Bitcoin, will be utilized by some of the most important value exchanges, or in other words, the highest level of value transfers only, such as IRS payments, or even governments/international exchanges.
This configuration would draw a “based on utility” scheme for the new economic system. The foundation of this comes from the definition of value. In a short explanation, we could summarize value as an amount of what another party is ready to pay for. A nice summary from Cosmos whitepaper says:
Blockchain ecosystem tokens can be considered a type of commodity. In classical economics, commodities have two identified types of value: use value and exchange value. Use value is defined the “want satisfying power” of a commodity. It is based on the utility of the commodity. Meanwhile, the exchange value of a commodity is defined as “the amount of goods and services which we may obtain in the market in exchange for a particular thing”. We may commonly think of this as the price of the commodity.
At this time, we can already witness the fact that Bitcoin behaves as an index of the crypto market. It has been pictured this way by multiple sources too, but I believe even more than an index, it remains to date the entry gate of anything related to this market. While Ethereum took part of this “default” value, that part is much smaller and is entirely included in the circle of Bitcoin coverage. No one can really predict what will become of the two stars, somewhat complementary on usage thus far, yet the feeling that Bitcoin will just be the de facto unit, the worldwide/spacial/global unit of value is only getting stronger to me.
In other words, I strongly believe that an organic growth of all the different networks will happen in a hierarchical type of structure. It will start with Bitcoin being heavily used for significant transfers, trickling down to another network for smaller level of transfers, and so on. It will not be as simple as level 1, level 2, level 3. It would make sense to see different structures based on the purpose and the type of usage.
For example, on the machine to machine payments, we could see IOTA (or another competitor for that matter) becoming a standard protocol, so much that it would trickles down to sub networks or other networks more specific to certain devices/purposes, and so on.
In the end, we can all speculate of what it will become, but in my book, Bitcoin, along with its subsequent developments, are part of the questions that only time can answer. I remain positive on the select few that have a long-term vision and aim to be disruptive for the good cause, adding value via real (world) advantages. There is a reason why forks have not been more successful than their original so far. They lack the original and innovative vision of the creators. They want to do well, but they are not the ones that came up with a beginning of a concept, that only creators know their long-term plans and usage. This is why, in my opinion, Ethereum and IOTA, for example, will continue to do well in the next decade.
On the positive and realistic side, let us keep in mind some of the following:
Adoption time — we know how long it took for everyone to recognize emails as efficient, or even essential in modern life. In the big picture (think of centuries), the transition was really fast (first electronic message in 1965). In the daily life, we could say that it was a very long process, going from invention use, to academic use, to enterprise use, to consumer use (worth noting that the email is apparently dying according to this). Point is, we can expect very much of the same with border less payments and transfer of value. Patterns are similar, waves of different usage and audience are coming one after the other, each one remixing the survivors with the new arrival, letting the sceptic on the side, for a while. It is all a question of time, not so much a question of ‘if’. That being said, I still believe the pace of those waves is accelerating over time, making the total number of years for mainstream adoption smaller with each new tech revolution cycle.
Talents — People tend to forget some of the most underlying value of this space currently, in 2018 and most likely in the next 15 years: talents. Not only some of the smartest and most competent people are naturally attracted to those new transformative concepts, both technologically and economically, but they are also offered the best paid jobs given how much money is flowing around and rising here and there.
“be the disrupters, not the disruptees.”
“ The difference between speculating (or throwing your money blindly into something) and investing, is the amount of time you spend researching and performing due diligence.” from CoinCrunch.
Happy Q4. To the next chapter.
DisclaimersThis is no financial advice nor an endorsement to any specific project.