Sunday, January 18, 2015

Okay, Maybe There's More to Bitcoin Than Drugs

Some of the points raised in this piece are mumbo jumbo/hand waving and some are actually very deep insights.
Figure it out and be the first on your block to enter the future.

If interested, a lot of the initial spadework has been done by Izabella Kaminska in FT Alphaville's "BitcoinMania series".
There's a lot of hype-n-tout and overpromise/underdeliver in this area that you can avoid wading through on your own. Plus, we are fans of lifting the ideas of those who know more than we do but see also "Digital rights and smart property" below.

From TechCrunch:

After The Social Web, Here Comes The Trust Web

Editor’s note: David Cohen is the founder and Managing Partner of Techstars, the #1 ranked Internet startup accelerator in the world. William Mougayar is an entrepreneur turned angel investor, founder of Startup Management, and currently raising his first fund.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” - Buckminster Fuller

The bitcoin train is really made up of two revolutions in one: money and finance, based on the bitcoin protocol, and exploiting the “currency programmability” aspects; and decentralized applications, based on the blockchain’s distributed technology capabilities.

Both are grounded in similar roots (crypto-technology), but they have different branching. Both paths are creating disruptive, innovative and system-changing opportunities for startups, investors, consumers and business players. Both are joined at the hip, and that hip is the blockchain, the backbone of crypto-based transactions.

To fully understand the blockchain concept and the benefits of cryptography in computer science, we need to first understand the concept of “decentralized consensus,” a key tenet of the crypto-based computing revolution.

Decentralized consensus breaks the old paradigm of centralized consensus, i.e. when one central database used to rule transaction validity. A decentralized scheme (which the bitcoin protocol is based on) transfers authority and trust to a decentralized network and enables its nodes to continuously and sequentially record their transactions on a public “block,” creating a unique “chain” — the blockchain. Cryptography (via hash codes) is used to secure the authentication of the transaction source and removes the need for a central intermediary. The combination of cryptography and blockchain technology together ensures there is never a duplicate recording of the same transaction.

This degree of unbundling is enabling a new way of writing software, and it is a spark of innovation for money- and non-money-related decentralized applications.

There are different flavors of crypto-technology-related implementations. Some are based on the bitcoin blockchain itself and others on an independent decentralized one. Some are based on the bitcoin currency and others on alternative cryptocurrencies or branded tokens. All these various permutations are creating a rich ecosystem environment for cryptocurrency-based innovations.

To say that bitcoin and its sole blockchain hold a monopoly on the future of cryptocurrency-based implementations is like saying in 2006 that LinkedIn was the only social network needed when it was barely leading, and when Facebook, Twitter and many other social platforms were still babies.

We need to view what is happening today as a rich ecosystem that represents the best blend of computer and cryptography science, and not just as an ecosystem of bitcoin-centric technologies.

A future that relies only on bitcoin and its blockchain is simply not possible. The cat is already out of the bag, and innovation around cryptocurrency technologies is racing. At the center of it, trust is shifting from humans and central organizations to computers and decentralized organizations with an underlying decentralized consensus that governs them.

If the social web dominated the period of 2004-2014, the next 10 years might as well belong to the trust web.

What most people don’t realize is that bitcoin is just a protocol, and a pretty low-level one to start with. Any heavy lifting happens on top of it, just as TCP/IP is the Internet’s protocol and a pretty low-level one. The ecosystem in and around bitcoin is actually helping to enrich bitcoin, more than weaken it.
Companies and projects such as EthereumBlockstreamMaidsafeMastercoinCounterpartyStellarFactomCodius and NXT are innovating with new technologies, services and applications that are pushing or testing the limits of Satoshi Nakamoto’s original vision.

Today, the bitcoin landscape is still murky, but patterns are emerging. The picture isn’t totally clear, but here’s an inventory of where we are seeing some of the most exciting and promising entrepreneurial activity, both in the money and decentralized applications segments....MORE
Some of the topics covered are

Money services...
Microtransactions and money transfer...
Money as content...
Blockchain technology stack...
Digital rights and smart property...
If you’re a creator or owner of digital assets, imagine if you could link these assets to the blockchain, binding your ownership (or rights) in irrevocable ways that cannot be undone unless you decide to transfer or sell them. And it’s all within your own control, not someone else’s.

In essence, you would be creating a “smart property,” which is an asset or thing that knows who owns it. The blockchain can be used as an auditable database linked to your cryptographic signature, and your smart property becomes linked to a unique digital fingerprint based on its content. Now imagine the portability, flexibility and discoverability aspects that accompany these capabilities, and that becomes a great lubricator for decentralized peer-to-peer trading and commerce.

Companies like Mine are enabling creators to establish a persistent link between their identity, reputation, a digital file and its meta-data using the blockchain as the proof of ownership. This will unleash new marketplace opportunities for trading these assets securely and efficiently....

Earlier today:
"Without Drugs, What's the Point of Bitcoin?"
Drug Buying Robot Busted By Swiss Authorities