Is Blockchain the new Internet?

This second coming of Internet enables a whole new universe of possibilities in multiple fields and industries.

Timing

Truth be told, my field of experience in the last years is very little related to cryptography and maths. But I’ve always been curious about disruptive technologies when there are still in early development.

One of my most significant experiences with innovation was with Virtual Reality. I was 17 years old when I felt powerfully attracted by the potential of this technology back in 2008. As a former gamer and independent developer I was familiar with animation, 3D modeling, texturing and rendering from an early age, so the potential of Virtual Reality appeared to me as a clear evolution of CGI and interactive experiences. After some heavy research (such as literally interpreting Chinese papers) and search for possible commercial applications, I developed a software completely based in Augmented Reality for Architects and Interior Designers. Probably the first of its kind.

(With ARQ Technologies, users could see and modify its own home in real-time through a HMD -Head Mounted Display- and a Joystick.)

This project gained some interest from the media and I received a grant from the government to continue its development. For two complete years I persistently tried to sell the solution to retailers, architectural studios, independent designers, supply companies, furniture factories, even digital agencies. But back in that time absolutely nobody were interested in Augmented Reality. Much less, in an expensive combination of hardware and software that made customers look like martians. They left our demo meetings very impressed, but they just did not see the value of buying it. Despite some emerging designers that used my software in product presentations, it was an innovation ahead of its time but a commercial failure.

(Back in 2008, Augmented Reality was barely reaching the peak of inflated expectations according to the Gartner curve for Emerging Technologies)

I understood that there’s a time for innovation. Work in a technology that is way ahead of your time may cost a huge amount of time and resources, and it may end up in nothing. Learning: Timing matters.

The arena

As a typical geek I became especially interested in Bitcoin and I spent time reading and watching referents, colleagues and companies build an ecosystem on top of this technology. That only fueled my curiosity to participate and learn more about it. I recently had the opportunity to be part of laBITconf and make contact with great experts in the field and an emerging community of developers.

When learning about Blockchain I somehow feel again in 2008 when Virtual Reality was perceived as a very innovative technology with a not-very-clear future. I also feel again in 1999 when I downloaded Napster in my Pentium 233 clone and experienced at firsthand how a technology as P2P was about to disrupt an entire industry. The why is simple: Despite nobody can predict if Bitcoin will succeed as a currency (probably won’t), there’s a common agreement that a technology that is securing billions of dollars around the world should secure many other assets as well.

(Number of Bitcoin transactions Per Day. Source: blockchain.info)

Learning: Disruptive technologies generate friction in the present and are commonly accompanied with uncertainty about their success.

The Blockchain

One of the first implementations of IBM’s tabulating machines enabled large organizations like the US Government and the Third Reich to process large amounts of data in a way never before seen, setting new precedents and making the old methods obsolete. Something similar is happening in the present: The huge amounts of information the Internet produces made impossible for any single state or organization to control and process it completely.

And since information is power, the paradigm of power changed radically with the rise of organizations that were born in the era of information versus traditional organizations carrying their own weight for centuries. Companies like Google are key resources for governments because they understand and control the modern mechanisms of information.

But just as we were just adapting to the new scenario, a completely new player emerges: The Bitcoin network far exceeded the computing power of the 500 most powerful supercomputers in the world (and combined between them). And even crazier than that, this is possible because the Blockchain, the underlying technology, replaces the servers that power today’s online world with computing power and storage that we all share. It’s a network. No individual or company owns it, and anyone can participate in it. That’s game-changing. And it sounds quite reminiscent to the origins of the Internet.

(The ‘Hash Rate’ is the unit of measure of the processing power of the Bitcoin network. When the network reaches a hash rate of 10 TH / s, it can do 10 billion calculations per second.)

The global trade network of today’s society is based in our trust in such fictional entities as the dollar, the Federal Reserve Bank and corporations. Blockchain, first conceptualized in Satoshi Nakamoto’s paper, is a peer-to-peer database that wipes out intermediaries and replaces that “trust” in a self managed, distributed network of computers (nodes) that guarantees its security and integrity. To use conventional banking as an analogy, the Blockchain is like a full history of banking transactions where every node in the network has a copy. Once a transaction is validated by each node in the network and registered in the Blockchain, it is permanent and unalterable.

The Internet was about replacing some intermediaries. Now the Blockchain is about replacing other intermediaries once again. — William Mougayar

Blockchain is the utopia of consensus come true, and this distributed computing system sustained for 7 years and counting an entire economy without the need of a central authority.

The future

Blockchain’s potential is way beyond Bitcoin. This database is a very effective way to verify records, identities, authenticity, rights, work done, titles, contracts, and other asset-related processes involving trust. However, the technology has not yet reached its peak of maturity, and there are no large-scale deployments that make use of it. According to the Gartner Curve of Emerging Technologies showed above, Blockchain is raising a hype and it has probably 5–10 years ahead to reach the ‘Plateau of Productivity’, leading to the same dilemma I experienced with Virtual Reality a few years ago.

The role of the many players involved (developers, startups, organizations and governments) should tend to shape the future of this technology for the next years collaboratively lowering barriers to its use and building alternatives and tools for its massive adoption.

Blockchain has the power to change traditional corporate models, institutions, governance and ways of life. But there’s still a long way to go.

Read more: https://medium.com/@guidosirna