To say there’s buzz around blockchain would be an understatement. Today having your own crypto-coin with a vague business plan, akin to the dot-com bubble a few decades ago, seems to justify massive investment
Let’s take a moment, look at the basics and answer three questions. What is a blockchain? Why should I care? How will people use them to make money?
What’s a blockchain?
Distributed ledger technology [DLT] fuels blockchain
Imagine a sequentially compiled list. Entry one is set. Then entry two. Then entry three and so on. In different locations many computers work together to keep this sequentially compiled list up and online. As multiple list hosts are actively responsible, there is no single source. It’s distributed
One difference with these distributed lists is that entries are jointly agreed on and confirmed. Using mathematical calculations each entry basically undergoes a type of peer-reviewed approval. The newly approved entry becomes a block which essentially cannot be deleted. Holding these blocks of data in a sequential chain becomes a secure ledger for the recording of digital transactions. A blockchain
What information is held, how these many hosts work together and who has access to review or add to a list is how this process can become incredibly complex. Or these settings are where operations intentionally or unintentionally convolute the concept
Why should I care?
Firstly because blockchain is able to host a new form of currency. Existence of fiat money, such as sheets of paper or little metal discs, state that an issuing body [government] guarantees these hold some form of convertible value. Exchange using paper money is thought of as equaling payment during purchase because of this [government] trust
On blockchain a unique string of numbers can act in the same way. Trust moves onto the ledgers. No government or central authority need be involved. This has some serious implications for taxes, centralized banking and instant international transactions. At its heart, cryptocurrency is an intangible digital asset
Cryptocurrency exists by virtue of ownership records. What value markets and people place on any one is an entirely different consideration
For now, blockchain is noteworthy because someday it could replace the bulky cash and heavy coins currently weighing down your pockets
Secondly, remember that blockchain can openly document transactions. Data on blockchain can become essentially immutable. You should care because when your personal data goes onto a blockchain then, by definition, it basically does not get deleted. Ever decide to remove an online profile? Or say clear your browser history after visiting certain sets of websites? Yeah, if activity was blockchain recorded then you might not have the same options
Say that your name [Stan Smith], connects to a cryptocurrency wallet address or user-ID [abc123]. Knowledge of this link allows the tracking of any transactions associated with [abc123]. Forever. This can be visible to private citizens across to government agencies
Earlier even blockchain’s impact and omission from GDPR requirements by the World Economic Forum has been discussed. This fact is why TOF® anonymizes blockchain entries using innominate codes. Real world connections to distributed ledgers become privately held
For a practical example, I’m anonymously publishing this article. A copy is on The Other Blockchain®. I hold time-stamped, unique registration proof backed with a permanent block creation result page. Finding anyone in violation of my copyrights means I can file claims against them, digitally never publicly revealing my real world identity. Also the hosting and recall of this article is decentralized, meaning access is not curtailed by centralized institutions or agencies
How do they make money?
They make money through your use. Blockchain technologies can be implemented anywhere lists or payments are involved. That applies to most every business and service. However, and this is a big one, it does not mean having a blockchain or using cryptocurrencies necessarily improves a business or service
This is new technology. What may not be new are your daily needs and choices. Whether payment is transferred on blockchain or via a traditional bank, you’re presently still using your name to move controlled resources from one location to another. Online retailers may add accountability by blockchain recording purchases but, you’re still say ordering and receiving an item
It may be just business as usual. Without anonymity most decentralized benefits of DLT are negated
Next, companies make money from your content and attention. For examples regarding content, numerous copyright services offer to host, sell, track or protect creator’s multimedia. When such files are downloaded from these various protection platforms then the creator, through blockchain technologies, is automatically paid. Cool concept. However the platform and network hosts also get paid for their troubles
Aside from continuing old school commission structures, the biggest limitation becomes actual user groups. The volume and reach of the protection network. Meaning a type of centralized content accountability becomes useful during centralized consumption. Presently this form of use is not achievable
People do not and cannot be expected to get content from a single source. As in only buying multimedia from one of these networks. It’s scary even thinking that one day we might. Profits for creators and hosts are thereby limited to authorized use on any of the competing protection networks. In our era of internet piracy and peer-to-peer exchange this translates into significant, ongoing and an ultimately untenable series of limitations
For commercialization of attention, picture a situation where your online movements become recorded in even more detail than they are today. You watch an advertisement online then you and or the website hosting this ad might be paid a few pennies
The whole interaction — from an advertisement’s positioning, your consumption and then possibly multiple source’s remuneration — could be blockchain recorded. This is roughly the concept behind the well known, already in use “Basic Attention Token”. Eerily detailed accounting including most all specifics of your internet use could be commercially exchanged. As such