It’s the FUTURE. People flying around on jetpacks, eating android hotdogs with digital hot sauce. Artificially-Intelligent-Robot Michael Jackson. “Beep bop Yeehee”. In this strange and wonderful future world, blockchain might just play an integral role in our lives. Let’s see how.
First, let's recap what makes blockchain technology important.
A blockchain is:
Permanent. Once information is stored on it, it will be there forever, and it can never be tampered with.
Verifiable. Every entry has been approved and has a timestamp, preventing fraudulent activity.
And finally, distributed. The people that keep the system in check aren't all employed by a single entity–they're all contributing on their own, from around the world, democratizing power.
So, how are we using blockchains today?
Right now, blockchain is most popularly used in cryptocurrencies like Bitcoin. Cryptocurrencies allow you to safely, cheaply, and quickly send money to anyone, anywhere. Anyone with an Internet connection can use cryptocurrencies—let's consider that fact for a second.
An estimated two billion people worldwide have no access to financial services. They can’t get a loan, store funds, or transfer money to others safely. Really think about that for a second.
Cryptocurrencies, powered by blockchain technology, change all of that, giving financial access to anybody with a smartphone (true, not everyone has a smartphone. But this is better than what we have today.). No financial institution or minimum balance involved.
There are lots of financial use cases for blockchain, but let’s now think outside the box to see where this technology could take us.
As revolutionary as they are, cryptocurrencies are just the tip of the iceberg. Blockchains can do much more than store financial transactions–in fact, they can secure and verify all sorts of information. Let’s explore how blockchain could be integrated into or even replace the systems we use today, making them more open and efficient. Many of these applications are still being built, but here’s a taste of what blockchain could change.
Identity. Today's tech giants have unprecedented data on all of us. What we like to watch, what we search for, what we buy, even where we are. Imagine a world where you have complete control over your personal data, with no one peeking over your shoulder. So long, Big Brother !
Voting. There's an election coming up. There always is. And when it happens, we'll have to wait for the votes to come in, for them to be counted, re-counted, and then Al Gore loses because Florida (long story). Imagine a system where we record votes using a blockchain. Users sign their vote and it is permanently recorded to the blockchain, doing away with fraud and recounts. Suddenly election disputes are a thing of the past.
Ownership rights. Rights to music, art, and real estate can be easily defined, sent and received, and even split into thousands of chunks. Imagine if you could own a slice of a pizza restaurant. That could be possible very soon.
Decentralized File Storage. This is starting to get real nerdy but, stick with us. Instead of having all your data on one central server, your information could be encrypted, split up, and stored globally - meaning no one can access it but you and there’s no chance of losing your precious data!
And lastly, blockchain technology is useful in making a delicious buzzword salad: Quantum AI powered proof of Tokenized Internet of Things cloud based-blockchain with machine learning drones… all inside VR… .com. Do we sound smart yet?
Blockchains can do more than transfer value–and one of the most promising technological innovations came in the form of the smart contract. Let’s review:
A smart contract is an agreement written in computer code that has the ability to transfer funds or information automatically once conditions are met. These contracts work in "if...then" statements, like "If the milkman delivers milk, then transfer funds to his account."
The key to smart contracts is the "automatic" part. Once the contract is signed and sent, it's completely out of our hands. We cannot cancel it or tamper with it, which will simplify any disputes! Like, the one you have with your milkman, say.
Are milkmen still a thing…? Now, the technology behind smart contracts is still being worked out. Making a piece of code that understands milkmen is hard enough–imagine a contract that pays your taxes, automatically.
The technology is still in its infancy, but here's a taste of what smart contracts might be able to do in the future:
Simplify legal disputes in almost any area. Rent agreements, paying the milkman, the mechanic fixing the car. It could be anything.
Replace escrow services that hold onto money during deals.
Automate payments, like insurance or payroll.
Or perhaps simplify prenuptial agreements. Take that, Jessica.
Time to get theoretical. You might say, “wait, weren’t we already theoretical?” Shhhhhh. Time to get… theoretical-er.
A bit about DAOs
Smart contracts allow users to engage in decentralized agreements. But we can take it a step further. Imagine compiling a series of smart contracts, thousands even, that combine to lay out the rules of operation for an entire business.
DAO stands for Decentralized Autonomous Organization. A DAO is not owned by anyone, rather run by a group of people. It's operated completely autonomously on the Ethereum blockchain using complex smart contracts.
Imagine decentralizing entire businesses. Instead of using Uber and Lyft to connect riders and drivers, a decentralized marketplace operates to bring freelancing drivers and people who need rides together, removing the middleman and the fee. This type of business would qualify as a DAO.
In reality, we wouldn’t notice the difference between Uber and Decentralized Uber (dUber for short). The taxi ride would be the same. The difference is, instead of going through a middleman, the riders and the drivers are connected through a Decentralized Autonomous Organization, or DAO.
This is what the world could look like. It wouldn't actually feel that different, but the structures underlying it would be revolutionized. Centralized data pots would be replaced with decentralized networks, making services cheaper and fraud much less common. Maybe Michael Jackson is there, who knows.
It's still very early for blockchain, but the technology is growing, and fast. Like the Internet in the early 90's, its not perfect yet but this technology has a bright future. As talented minds flock to this new space, we may soon find blockchain intertwined with the systems we use every day: think computers, money, social media, and more. The future is global, decentralized, and in your control.
In the words of former CEO of google Eric Schmidt: "Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is not duplicable in the digital world has enormous value." In other words... it all started with Bitcoin, but that was just the beginning. Who knows where we'll go?
What is blockchain?
Blockchains allow us to store and verify any type of information in a safe and permanent way
They rely on distributed networks instead of centralized third parties
How are blockchains currently used?
The use case of blockchain technology was cryptocurrency.
Cryptocurrencies allow for cheap, easy value transfer without the need for a bank or identity information, potentially allowing billions of people to access financial services
What are the future uses of blockchain?
By eliminating middlemen, blockchain technology has the potential to make many of today’s systems more efficient
Examples include ownership services, escrow, voting, identity, and decentralized file storage
How can smart contracts be used to create complex entities like DAOs?
With careful coding of a multitude of smart contracts, we can create complex self governing entities
The epitome of these is the Decentralized Autonomous Organization, which is run entirely by a set of smart contracts. It makes its own decisions based on the guidelines set forth in its smart contracts, requiring no human intervention