The Future of Blockchain

Today Cris and Cody debate the question where will blockchain be in the next 5 years? We have some controversial opinions to share. Where do you think the blockchain will be in the future?

Full Transcript Below:

Cody:

Go to any place, on the internet or in person, Bitcoin isn't accepted.

Cris:

I'm even seeing more and more kiosks popping up.

Cody:

The biggest, most important thing about where blockchain technology comes into would be, in my opinion, might be legal.

Cris:

Exchange it more openly, pay for stuff with it, actually.

Cris:

Cody, where is blockchain going to be in five years? This is a very loaded question. There's probably going to be some pauses of silence for all of us. But I just want to unpack this. Where do we think blockchain is actually going to be in the next five years?

Cody:

Well, I think the good question is where is it now?

Cris:

Doubling down.

Cody:

I know, right? Blockchain technologies, whether it's through NFTs, through cryptocurrencies, through smart contracts, what do they actually solve right now? And I think most people will just be shouting the answer when they hear me ask that question. Well, the banks suck, and they want to not have centralized management of currency. They don't want the government involved. Libertarians screaming in the background. That's fine.

Cody:

But I think looking at what blockchain does well, which is basically an immutable ledger, a ledger that cannot be changed and is publicly available, that is extremely energy inefficient to use. What does it actually solve? Where does that technology fit in correctly? And I think that's a good question to ask, because I can think of a couple places. And I've heard some ideas of people already attempting to do these things, but I think the biggest, most important thing about where blockchain technology comes into be, in my opinion, might be the legal sphere, contracts, vital documents. IT needs to land in property.

Cris:

What about car titles?

Cody:

Even that. Even that. Basically things that should not be... I guess that should be publicly visible, and should be immutable, with ideally as minimal risk as possible to a bad actor doing something. And ideally, that you kind of want to be somewhat independent of the government. So legal, in the sense of, for instance, private contracts, I think would be the first domino in that sense.

Cody:

Because a lot of the time, contracts are genuinely between two parties that are not a part of a government. Because the government has self-serving interest. They want to keep track of the titles. They want to keep track of the deeds. And as much as, probably, individuals may not want that to be the case, you got to have certain buy-in, of course.

Cris:

I got to go to the DMV for my license, whether I like it or not.

Cody:

Yeah. Yeah. And obviously, that's a little bit of a jump from what we're doing right now with cryptocurrency. Because we have NFTs that, for the most part, have found their world in artwork. But it's also, what do you actually own with an NFT? Do you own the artwork? No. Do you own the copyright? No. Do you own the rights to view the art? No. The best equation I've heard is that it's basically like owning a signed print of an artist, almost. Because the art is stored somewhere else. It's not even in the NFT. It's a link. So NFTs are just kind of weird. And cryptocurrency is cool, but aside from just sketchy things, who's buying anything with cryptocurrency?

Cris:

I mean, it's starting to... I mean, you're starting to see more and more actual government entities in countries literally accepting it now. You're starting to see opportunities for people to basically exchange it more openly, pay for stuff with it, actually both online, and I'm even seeing more and more kiosks popping up, where you can literally just buy and sell it straight from a standalone kiosk.

Cody:

But that's what I'm getting at, is that you can buy and sell it, but for the most part, if you want to buy any normal product, go to Amazon, go to any place on the internet or in person, Bitcoin isn't accepted. Ethereum is not accepted. Litecoin is not accepted. Not even DOGE is accepted. How dare they?

Cris:

Who's going to accept it? I think that someone is. I think that there is going to be an Apple, or a Microsoft, or a Meta, or someone. Right now, who's going to be the player in five years that we're going to go, "They were the ones. They did it."

Cody:

I'm going to say something very controversial.

Cris:

I'm ready.

Cody:

No one is going to accept it, ever, in its current form. And the reason for that is twofold. If you buy something with Bitcoin, it takes three block cycles to have a guaranteed transaction generally, or even more for larger ones. Each of those block cycles take 10 minutes to generate. You go to the store and buy groceries and have to sit in line for 30 minutes to make sure your transaction is actually funded, no one is going to do that for almost any purchase outside of maybe a car, where it's already a slow process.

Cody:

And that's a huge deal, is that the speed of transactions within... Specifically, the Bitcoin network is actually one of the worst. Ethereum is better. I think it's 10 or 15 seconds, I think. Don't quote me on that. But I think it's a lot quicker. You still have to wait for the block transaction. So you're still talking about an order of minutes, sometimes, for these things to process and go through. And that's a big deal, is that the speed of transactions with the cryptocurrency networks are too slow for retail application a lot of the time. And...

Cris:

Okay. I'll let you go, and then I'll counterpoint that.

Cody:

Go for it. Yes. And the transaction fees right now are far too high to make it equitable for the customer or the business. There's no purpose, aside from idealism. You will pay more for every product you want to buy with cryptocurrency because of the transaction fees.

Cris:

Okay. Okay. What were people saying about... Do you remember checks?

Cody:

Oh, yeah.

Cris:

Okay. What were people saying about checks? Because no one writes checks anymore. But there came a point where they actually had become fairly widespread, and you could just go write a check, and you could pay for your groceries, even though there was no way of actually checking that you had said money. So for me, I see that idea of, okay, well I'm going to go sit at the line. And am I going to wait 30 minutes, confirm that this actually goes through and is validated, and so on and so forth? Or are there going to become entities that are going to start to take on the liabilities of saying, "Nope, we're covering that."

Cody:

Yep. And that's my asterisk. Things got to change. But the problem is, anything added on top of that... For instance, we mentioned checks, they're not quick. But when you go and use a check at a place, like a store or anywhere... I think the only place I see people use checks occasionally will be very old people at grocery stores. Aside from that, I don't typically see them used anywhere except for-

Cris:

I write checks all the time, Cody.

Cody:

I actually do too, believe it or not. I just don't do it for that. I use it usually to pay rent or certain bills.

Cris:

I write them hidden. Make sure no one sees them.

Cody:

But anyway, when you use a check like that, it goes through a little scanning machine. Have you ever done it?

Cris:

But those didn't always exist.

Cody:

No, you're right. But that's what I'm saying, is that machine isn't checking to make sure you have money. It's making sure you are worth it, that you haven't disobeyed the laws of the checks and committed fraud in the past and wrote more than you had. And the problem with that, is that if you did that with cryptocurrency, which would make a lot of sense, you're now centralizing something that is idealistically decentralized.

Cris:

I like that. Okay.

Cody:

So, to add that kind of a layer, you are inherently, unless there's some other tech that comes out, some sort of decentralized credit system, which is actually a pretty cool concept, you're welcome, million dollar idea, that basically corrupts the central tenet of why we're doing it in the first place.

Cris:

So we've talked a lot, and the original question was where are we going to be in five years?

Cody:

I think contract law.

Cris:

You think contract law? Okay.

Cody:

Yeah.

Cris:

And you don't think... Or you do think that people are going to be using this in their daily lives to make purchases.

Cody:

In its current form, I don't think so. There needs to be some changes. There actually are some big changes coming to the Ethereum network. I believe they're moving away from the... This is going to get so technical, but they use proof of work to basically determine the authorization of a block of transactions. And they're moving to a new mechanism that doesn't require miners to show proof of work. It's a whole different mechanism for proving the validity of a transaction block, which is great, because it'll make it much more energy efficient, and in theory, should speed it up. But that remains to be seen.

Cody:

But that's just one thing of saying stuff has got to change. And I think the biggest changes I'm seeing is the transaction fees need to go down, which is a big part of this proof of work thing, which is basically whoever spent the most time crunching the numbers to figure out if this block of transaction is actually valid, it's going to be done in a different mechanism now. So in theory, the energy costs will go down, and in theory, the transaction costs go down because of that.

Cody:

But it also needs to be faster for just standard transactions. If it's going to replace your Visa debit card or something of that sort, it's just got to be two, three seconds. It's got to go quick. And as far as I'm aware, there's nothing that really competes in that space for real proof right now, in terms of Bitcoin transactions.

Alexandra:

Thank you for joining us for this episode of Bixly Tech Tuesday. I hope you enjoyed that lively conversation between Cris and Cody, as they talked all about blockchain and even their predictions of what it will look like in the next five years. If you have any questions at all, or maybe hot takes to leave in the comments, go ahead and do so, and we'll get right back to you.

Alexandra:

And don't forget to check out the description box down below. We have a bunch of really?helpful links?for you guys, including a link to our?free DevOps guide, which will really help you out if you are in this phase of app maintenance, or you're looking for DevOps services. You can also find us online at?bixly.com, and there's a big button right at the top that says, "Start My Roadmap." That actually gets you a free 60 minute call with Cris to talk about your next app idea. Until next time, this has been an episode of Bixly Tech Tuesday.