The cryptocurrency space, and bitcoin specifically, can get pretty confusing. One reason for this Fernando Ametrano succinctly explains in one slide:
(Note, I first saw this slide in Jameson Lopp’s article here)
So if you ever feel lost, or over your head, don’t worry we have all been there. In fact, the more I learn, the more often I feel that way, until I get past one layer of understanding, and then hit the next new layer.
Is learning about cryptocurrency worth it? Will cryptocurrencies really be around in 5 or 10 years or is it just the new fad to talk about? If you are willing to stick with me for a bit I think you will start to see why this technology is here to stay, and how you can start using it (the best way to understand something IMO).
Why should you care about Blockchain Tech?
The internet shifted power away from centralized organizations like Britannica to decentralized loosely organized collectives like Wikipedia. In many ways this was good because it democratized information. People like Matt Mullenweg, founder of WordPress, decided to make it his purpose “to democratize publishing one website at a time” (taken from the WordPress About page). But the current system is broken. We are now the product of so many of these platforms.
Those articles may have convinced you, but let’s list a few more problems: privacy concerns, centralized aspects of the internet lead to attack vectors for malicious actors, accidentally revealing personal private online.
But what if you are really really careful? You are a good internet citizen, always using strong passwords, never falling for fishing attacks, and constantly monitoring the private information you share publicly. Large centralized companies still have access and control your data, and those very companies become targets for hackers to attack them.
There is an inequality between the work to build walls against attackers, and the work to tear down those walls. It is cheaper to tear down the walls than build them in almost every case. The only case I am aware of where this is not true, is in the world of cryptography.
So one answer is to take the power away from centralized solutions (often referred to as trusted 3rd parties), and put it in the hands of individuals using cryptography to secure their own information.
The Next Internet, Decentralized and Encrypted
I want to share with you where these ideas stop being ideas and start being usable to you today, because that is the best way, in my opinion, for you to really get what is happening. Ready?
If you have not jumped on the bus with me just yet, it might be because you say something like “Facebook is great, Amazon.com has changed my life, and and I like calling my credit card company to reverse a charge when something wrong happened to my order! There are no decentralized versions of these out there, and how could they ever compare?”
The authors of the two articles below do a fantastic job answering those questions, and more.
The short answer is that decentralized solutions will get there, quicker than you might think, and better than you might imagine. I heard Andreas Annatopolis, who literally wrote the book on Bitcoin, use a great analogy. On a podcast he discussed transformational power of bitcoin and the underlying tech in terms of the internet vs. fax machines. The gist of his argument was when the internet was still in it’s infancy, fax machines were more ubiquitous and reliable. If you asked a business person what they wanted from the internet, they might have said a faster fax system. At first the internet could not compete, but quickly surpassed fax machines once the technology was reliable, ubiquitous, and the protocols supported software that truly became useful.
Is Blockchain Technology Useful Today?
The short answer: Yes, but right now only in specific niches. That answer is quickly changing, and I will share in part two of this piece projects you can start using today, many will have far reaching implications across many areas of our daily lives.
But first… with literally hundreds of billions of dollars poured into blockchain technology, why on earth is it taking so long to get useable consumer applications?
Let’s put this technological revolution in perspective with a previous technology, cell phones.
Think back for a moment to when cell phones hit the market. How useful were they at the outset? First they were only in a few areas of big cities, then just the major metro cities. Even after the technology was available, you had to put up with static, frequent dropped calls, and horrific battery life.
You were innovator or early adopter (to use Geffory More’s terms) if you were using the technology before it really became popular. Look at this pretty chart to see this idea graphically:
At some point, the technology crossed over the chasm and early adopters jumped on board. Was it when the battery life improved, or the service fees went down? Someone on the internet could likely tell us, but my point is it went from a niche fad to a widely used aspect of our daily lives.
The author Clay Shirky makes a great point about communication tools in general:
Communications tools don’t get socially interesting until they get technologically boring
Quote From Here comes Everybody.
Clay is right on, not just about communication tools, but I think protocols in general. I don’t get excited about TCP/IP or BlueRay, but what it can do for me. I don’t think about how my Mac processes information slightly differently that a Windows or Linux machine, I just use it and it works a majority of the time. The point at which technology just starts working, and we can trust that it just works most of the time, is when it will cross the chasm and revolutionize many aspects of our lives. For people in countries with less stable currency, using cryptocurrency (and therefore blockchain tech) on a daily basis is already their reality. As William Gibson eloquently put it “The future is already here – it’s just not evenly distributed.”
Are you ready to be an early adopter, but not sure where to start? Stay tuned for Part 2 where I point you to many projects you can start using today.