Starting down the blockchain road - A short primer

“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”

- Thomas Jefferson

I have always had an interest in the history of money and in particular how fiat currencies have come to be and manipulated throughout the ages. I think the more you treat money as a thing and understand the principles behind it the more chances you have of becoming wealthy. If you fear money because you don't understand it then you will probably not wind up doing so well.

“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

- John Maynard Keynes, The Economic Consequences of the Peace (1920)

So as a consequence, when one of my clients started  telling me about bitcoin my ears  perked up. I downloaded an audiobook (Digital Gold) and listened to it on the train and my evening and weekend walks through the city.

Recently, my colleagues in London have gotten all excited about bitcoin and in particular blockchain and managed to get me all re-excited about bitcoin and blockchain. I downloaded another audiobook (The Age of Cryptocurrency). I spent a month reading articles on line aswell. At the end of the day, everyone is saying the same thing. We seem to have hit a point with bitcoin and blockchain where a lot of people understand the high level concepts but there are not enough developers engaged in blockchain to move it forward and produce products that the people and businesses can use to leverage the protocol. I will explain in future posts the different pain points, that I have encountered and fought through to develop a blockchain application. In the meantime, here is the best of the best I have found on introducing yourself to blockchain:

Bitcoin is a mathematically protected digital currency that is maintained by a network of peers

1. The value of bitcoin transactions keeps rising. The value of bitcoin keeps rising. One bitcoin enthusiasts paid 30,000 bitcoins for a Domino's pizza in 2010. Today, 30,000 bitcoins is worth a little over $12 million. Hindsight totally sucks sometimes.
2. Bitcoin was invented by an anyonymous person or group of people named Satoshi Nakamoto....kinda creepy that we are basing a possible global currency based on the work of someone anonymous...
3. Bitcoin is a distributed general ledger so your money is anywhere and everywhere and controlled by no one but you...unless you lose your private key...then you are screwed.
4. Bitcoin is trustless (you don't need to trust anyone...if they say they have the money then they do). However, there is still the risk that if you pay for something in bitcoin, it doesn't guarantee delivery on the product. This is where smart contracts would come into play (upcoming post).
5. Bitcoin is secure (almost impossible to crack...you have to have 50% of the computing power on the bitcoin network to change transactions).
6. Bitcoin is anonymous (anyone can exchange anything anywhere without any government oversight).
7. The bitcoin protocol runs on blockchain.  The blockchain creates a single shared source of truth by every node on the network validating the transaction before accepting the transaction into the blockchain.
8. Blockchain can be used for more than just currency. It can be used to distribute, encrypt, execute and validate any transaction (I.e. pipeline volumes, crude oil contracts, invoices, derivatives).

Bitcoin might fail but the blockchain is here to stay

So after reading, listening and watching a month of bitcoin/blockchain stuff do I think that bitcoin will become the global currency. Answer: I believe a cryptocurrency based on a blockchain protocol will become the global currency. More assuredly, I believe blockchain will become the method by which we transact. So much so that I have started to work on CommodityChain using bitcoinJ to create the next generation CTRM. CommodityChain will allow the commodity supply chain to leverage both the IoT and the Blockchain to create a transaction ecosystem that measures, monitors and verifies all movements and exchanges using a distributed general ledger and sensors.

....yes this is hard...2 steps forward...1 steps back...3 steps forward...crap, I am going to need dynamite for this wall... :)

When you went into a Boston Chicken and ordered quarter-chicken, white, with mash and corn, when that was rung up, that would signal all the way along the supply chain the need for more potatoes to be put on a truck a thousand miles away.
Stephen Elop