Blockchain

For a more in-depth study of the blockchain platform and ecosystem, rely on this Blockchain book written by Melanie Swan

We should think about the blockchain as another class of thing like the Internet—a comprehensive information technology with tiered technical levels and multiple classes of applications for any form of asset registry, inventory, and exchange, including every area of finance, economics, and money; hard assets (physical property, homes, cars); and intangible assets (votes, ideas, reputation, intention, health data, information, etc.). But the blockchain concept is even more; it is a new organizing paradigm for the discovery, valuation, and transfer of all quanta (discrete units) of anything, and potentially for the coordination of all human activity at a much larger scale than has been possible before. We may be at the dawn of a new revolution. This revolution started with a new fringe economy on the Internet, an alternative currency called Bitcoin that was issued and backed not by a central authority, but by automated consensus among networked users. Its true uniqueness, however, lay in the fact that it did not require the users to trust each other. Through algorithmic self-policing, any malicious attempt to defraud the system would be rejected. In a precise and technical definition, Bitcoin is digital cash that is transacted via the Internet in a decentralized trustless system using a public ledger called the blockchain . It is a new form of money that combines BitTorrent peer-to-peer file sharing1 with public key cryptography.2 Since its launch in 2009, Bitcoin has spawned a group of imitators—alternative currencies using the same general approach but with different optimizations and tweaks. More important, blockchain technology could become the seamless embedded economic layer the Web has never had, serving as the technological underlay for payments, decentralized exchange, token earning and spending, digital asset invocation and transfer, and smart contract issuance and execution. Bitcoin and blockchain technology, as a mode of decentralization, could be the next major disruptive technology and worldwide computing paradigm (following the mainframe, PC, Internet, and social networking/mobile phones), with the potential for reconfiguring all human activity as pervasively as did the Web.

The blockchain industry is nascent and currently (late 2014) in a phase of tremendous dynamism and innovation. Concepts, terminology, standards, key players, norms, and industry attitudes toward certain projects are changing rapidly. It could be that even a year from now, we look back and see that Bitcoin and blockchain technology in its current instantiation has become defunct, superseded, or otherwise rendered an artifact of the past. As an example, one area with significant evolving change is the notion of the appropriate security for consumer ewallets—not an insubstantial concern given the hacking raids that can plague the cryptocurrency industry. The current ewallet security standard is now widely thought to be multisig (using multiple key signatures to approve a transaction), but most users (still early adopters, not mainstream) have not yet upgraded to this level of security.

By Melanie Swan

About the author

Melanie Swan is the Founder of the Institute for Blockchain Studies and a Contemporary Philosophy MA candidate at Kingston University London and Université Paris VIII. She has a traditional markets background with an MBA in Finance from the Wharton School at the University of Pennsylvania, and work experience at Fidelity and JP Morgan. She has a new markets background as an entrepreneur and advisor to startups GroupPurchase and Prosper, and developed virtual world digital asset valuation and accounting principles for Deloitte. She was involved in the early stages of the Quantified Self movement, and founded DIYgenomics in 2010, an organization that pioneered the crowdsourced health research study. She is an instructor at Singularity University, an Affiliate Scholar at the Institute for Ethics and Emerging Technologies, and a contributor to the Edge’s Annual Essay Question.