Blockchain: from the Tulip bubble to the promise of a better society.

What would be the VALUE of any cryptocurrency if its PRICE goes to 0.00?

Before aproaching to this question, a brief introduction is needed.

Blockchain is a new solution to the 1000+ year old Byzantine problem. At the time of the Empire, a group of Generals encircled a city with the purpose to invade it. The conditions of the task made them aware that to get either a successful invasion or a safety retreat would be possible only if the Invading Forces executed unanimously one of those two actions. Partial attack or partial retreat would be taken in advance by the City Forces with disastrous consequences for the Bizantine Army. Thus, a consensous among the Generals was of vital importance. The option to do a poll and to opt for the most voted option came up with serious concerns propeled by the physical limitations they faced at the time, like large distances between the Generals and then the impossibility to discuss the actions to take directly to each other, and the chance to have one or various agents working to decive the Generals in favor to the city (traitors). If both options receive a votation in their favor from the same deceiving participant this deviation would certainly lead to the partial actions mentioned before with the not desired outcome for the Byzantine army. This situation can be summarized on the following characteristics: 1. The system is conformed by a group of participants that are willing to be part of it while they do not trust completely or even partially on each other. 2. The participants can only communicate among them by means of messengers (network) because they cannot stay togehter in the same place. 3. The actions of the all depend on the sum of desitions of each participant. 4. If there are agents working against the system, those could be another participant (one General in our case) or the network (the messenger that carries out the votation). 5. Finally, and most important, to guaranteed the integrity of the system all the participants must have access to the same records.

Form the point 5 the block-chain solution to the Byzantine Generals problem is introduced: the deception is avoided by distributing exact and integral copies of the system database to each participant while guaranteeing that any change to be replicated over the all copies, all of this under the concept that the bias is produced by the dependence on a single entity which is subtle to be corrupted. The term block-chain is because the database is structured in blocks of information. When new data is created it is formated in a block which is appended to the existing ones. Then the database becomes a chain of blocks. This is meant to make it not possible to be corrupted, since any attempt to change one of those blocks implies to change all the following blocks also in all the databases, which very expensive to do and unlikely to happen. By doing so, the solution faces two challenges: first, whenever a new record (transaction) is produced it has to be written to all the databases, and second, there is the need to stablish a consensus method among the participants to decide which transactions are valid to be recorded. To solve this, the blockchain architecture introduce a type of participants who under certain rules (consensus algorithm) can define which transactions can be recorded. Those participants are known as "miners" in some architectures and "orderers" in others. To perform the consensus algorithm and then to write back the blocks of data imply an effort and consumption of energy that are not easy to give away unless getting some benefits from doing so. At this point is where the cryptocurrencies where created and lies the explanation behind the term "miners": the members who perform the consensus algorithm can be rewarded with cryptotokens that are created (mined) after each successful execution of the algorithm. Not all the participants will get those tokens but only one. Depending on the rules of the algorithm in some cases it is the first one to accomplish the overall task and this leads to a competition among the "miners" to win those tokens, specially when the market price of them is attractive. Nonetheless, the cryptography techniques and protocols are implemented to accomplish the security levels desired for the system related to the network.

Due to the nature of the tokens, they are traceable and not possible to be duplicated (mined) outside the system, which make them a reliable registry of ... well, nothing meaningful really. Those tokens can be considered a sophisticated version of the stars, coins, bananas, etc that some characters of adventure videogames recollect while playing. Despite any argumentation, we the society must assume and defend that he valuation of an asset, share or stock is in direct relation to the services it brings, besides any distortion the market could introduce. For instance, the oil business was the most lucrative during the last century because oil was the main source of energy for transportation. Now in the digital age, companies like Amazon had invested millions in developing its services while creating thousands of jobs during at least two decades prior to achieve the outstanding performance they have now. It is at this point where the question is which value is provided by the cryptocurrencies, if the statistics show us that those are not used for payments (specially because of the tremendous instability they have) and because the people who buy them do so with the expectation of having exponential gains in a not distant future. Some people argue that the value is given by the energy invested on creating those tokens, which in the case of Bitcoin is as much as the entire consumption of Ireland. Other cryptocurrency enthusiast claim that there is no need to have a valuation against legal currencies, since the value is given by the adopters themselves. Well, until the energy providers accept crypto tokens as a mean of payment, such statement it is extremely doubtful.

Under the perspective exposed till this point, there is an underline that links a strong parallelism between the Tulip bubble of the 17th century and what the crypto markets experienced last year.

However, as part of the aim to impulse the Qash project, we are developing a crypto token back end in order to provide a trustful secure system to our customers. Despite of this, because of our business ethics we will not participate in a traditional ICO to the public since after the present explanation, we believe them promote speculation instead of provide a new service or product. The technology behind the crypto tokens, the blockchain, is indeed disruptive and the potential it has is wider than the just fintech services. In order to serve to the society mass adoption is needed and that could be done by including traditional banking services providers in the system while being more efficient than the current solutions and that is what we are working on.

As a final note, we believe the blockchain technology has the power to bring us a better and fairer society by implementations in voting systems, identity detection, land registry, e-government, among others. Just to mention one, would be of great advantage to the society to have a permanent and distributed record of all the transactions, contracts and payments executed by the Governments because it would bring transparency and eventually eliminate corruption in public sector.

Thanks for your time and please let us know your comments.