Here’s why talking about blockchain is so 1970’s
OK, you may not remember the 1970’s or early 1980’s but these were the days when guys like Wozniak, Jobs, Gates and Dell were building computers at home. And another million or so other tinkerers with less business sense did as well. Whenever you met people with micro-computers you would brag about your RAM. All the kilobytes of it. Or 20 MB hard drives. So what microprocessor do you have? 8088. Seriously dude, Z80 or even M6809 are so much better!
You get idea. It was all about the components that made your computer faster. Application software was only just being developed and not much discussed at first.
I will admit to actively following the discussions on blockchain, shared ledgers, smart contracts and what bitcoin 2.0 should look like. But I will also admin that these discussions are a reincarnation of those debates on M6809 vs Intel 8080. We are talking about components. How big should a bitcoin block be? How will the blockchain cope with scalability? Can we rely our business on it?
But it isn’t about blockchain anymore than it is about microprocessors. What is the big picture we need to discuss? The distributed Computer. Just one, for the whole world. Blockchain is the distributed permanent memory of that Computer. And if you add in Ethereum, for example, then you have a distributed processor too.
But we shouldn’t really talk about The Computer either. It’s all about the distributed apps, or as Ethereum calls them: dapps. What dapps do you need to develop to support your business going forward?
It is easy to see that doing financial transactions are trivial on The Computer because anything we write to the permanent memory (aka blockchain) is there for all to see and to stay. No need to transmit messages between computers because there is only The Computer. No need to synchronize systems because there is only one System, just like there is only one Internet today.
So let’s move beyond simple transactions. Let’s write a dapp where we negotiate a price. We’re both looking at the same system so writing a dapp for that is easy. It’s like we’re sharing the same keyboard and screen and an excel sheet where we type our best price. This is another trivial app that happens to represent auctions and markets. Just imagine this: a dapp that is able to do what a stock exchange does without the hassle of distributing prices to brokers and managing the transactions. Just a single dapp.
We could go on and emulate Uber, eBay, Amazon etc. The dapps that can handle the digital side of these businesses are no more complex than a simple free app on your phone today. But unlike the app on your phone, they replace the complex transactional and data distribution systems that you use today.
Today such dapps are still a little special. You need to dig into the technology to develop them. But within 5 years they will be mainstream practice. Within 10 years a dapp that ‘does Uber’ will be homework assignments for students. So here is the question: if the complex business technology we manage today becomes a homework assignment for your kids in a decade, then what are the complex business models we will be developing then?
This is an important question because in the same way that you probably won’t build a business in the highly competitive app space today, you will probably not want to enter the red ocean of a million dapps that are emulating today's business models in a decade. But at the moment, that is what a lot of blockchain applications are about: a dapp to do this or that.
What will your business look like when global digital distribution, financial transactions, guaranteed payments, instant exchange of anything are zero friction options? I bet it won't a dapp but a whole ecosystem of free dapps. Think big, as big as you can and you might just get a glimpse.