The blockchain revolution and disruption of everything.
The core underlying blockchain distributed ledger, cryptology, Byzantine fault tolerance and smart contract concepts and technologies have existed for a long time, so why is it suddenly so disruptive? What’s changed and what future is enabled?
The most significant innovations in contemporary blockchain technology and crypto-economics first introduced by Bitcoin, was codifying ‘trust-less triple-entry-accounting’ into a coherent technology stack and the introduction of a capitalised value token.
As double entry accounting revolutionised ledger management and trade in the 1400’s, trust-less triple-entry-accounting is a cryptographic twist applied to the entire ledger and all transactions, which reliably enables Byzantine fault tolerance with irrefutable verification proofs on the state of the entire ledger and network at all times, to all participants, eliminating the need for centralised third-party gatekeepers that our society, businesses and governments are currently structured around.
This is a huge deal and arguably mankind's greatest innovation since the scientific and technology breakthroughs that enabled the industrial revolution in the late-17th century, which transformed society and the way we organise ourselves. Whether Bitcoin survives or not, trust-less triple entry accounting and the decentralised economy it spawned, will revolutionise almost every transactional interaction between humans, extending to our machines. The dawn of Humanity 2.0 is upon us.
Social orders, structures and governance (and governments) are set to change forever as humanity evolves and adapts to this unstoppable force, the global revolution of autonomous decentralised systems has begun. Satoshi's sixth generation money ‘Bitcoin’ was just the first killer app on this revolutionary journey.
A capitalised Value Token
The monetary policies of crypto tokens are at the heart of the success of the nascent crypto and blockchain economy. The creation of a valuable utility token for projects has provided a powerful economic incentive for all participants to invest, adopt and behave in the best interests of the network.
Simplistically the value tokens are a;
Market mechanism for direct investment in projects, performing the function of a secure tradeable internet based bearer instrument
Cryptographically secure, blockchain service-access-key and irrefutable proof of ownership and rights in the network
Combined these attributes are the basis for creation of an entire parallel global economy and market, driving investment, user adoption and demand. These aspects of the crypto economy’s success are largely misunderstood by the traditional investment community and the general public, including the majority of the crypto-token speculators.
This is the basis for the long term viability and sustainability of new blockchain projects, the cryptocurrency economy and markets. Equally poorly conceived crypto-economic models and policies will be the death of the majority of projects.
We are in the equivalent of the late 1600’s on this journey that will ultimately impact all industry sectors, organisations, business functions. human and machine interaction, creating humanity 2.0. The use cases and utility of this technology are endless, the opportunity and financial gains are enormous, hence the scramble to enter the sector we are witnessing today by those that understand.
Investment - Follow the Money
Cryptocurrency speculation has unfairly garnered the greatest media attention in the blockchain sector. Initial Coin Offering (ICO’s) a new global public market based direct investment mechanism (crowdfunding) has succeeded in raising billions of dollars for the thousands of start-up blockchain projects, to commercialise their concepts. This is in addition to the hundreds of millions of dollars worth of direct project founders’ investment and traditional VC funding in the sector.
The sector is truly global the investments are being directed into blockchain technology, protocol and application development, plus ecosystem services buildout that significantly outstrips the internet mania of the 1990’s and early 2000’s. Tens of thousands of new projects are being created every year both within existing enterprises and as new start-up ventures.
The following 30 second gif graphically illustrates the success of ICO’s and the sector development over the past four years…as impressive as this is, 3,500 new projects will ICO before May 2018, investment is pouring into the sector at an exponential rate.
Conceptually blockchains are a technology stack analogous to the internet, comprised of layers. At the bottom foundation infrastructure technology layers, then business logic and process layers that embed self-executing event based smart contracts, through to sophisticated applications delivering new complex hybrid utility services to users.
Typically, blockchain initiatives are funded and economically powered by a value token (the cryptocurrency) that incentivises investors and users for their participation and provides access to the services and information payloads blockchains secure.
Investment is being directed towards innovating and developing all layers and aspects of the blockchain ecosystem, by organisations and individuals who are building single purpose ‘point’ solutions and comprehensive industry specific platforms. Huge investment is also being directed into developing the myriad of enablement and support tools and services such as token management tech & services and trading markets necessary to facilitate adoption and support a fully functioning blockchain ecosystem and parallel economy.