Blockchain: blueprint for a new economy

The other day I commented khổng lồ a frikết thúc that while I understand the Bitcoin blockchain well, I don’t fully understand its value from a business standpoint. To be blunt, I get the tech and find it fun và fascinating, và while I know it’s useful, I don’t entirely see how it’s useful. My frikết thúc commented that this is a common problem with tech people- we understand the tech but don’t understand the business. Fair enough.

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I came across the book Blockchain: Blueprint for a New Economy by Melanie Swan. It’s described as a book that “takes you beyond the currency (“Blockchain 1.0”) & smart contracts (“Blockchain 2.0”) khổng lồ demonstrate how the blockchain is in position to lớn become the fifth disruptive sầu computing paradigm after mainframes, PCs, the Internet, and mobile/social networking.” It sounded good, và it’s an O’Reilly book, so I decided khổng lồ give sầu it a read.

This post is a summary & nhận xét of Blockchain, which is essentially a danh mục of blockchain use cases, all discussed at a very high cấp độ. While the author doesn’t touch on the technical side of things or implementation, I found it a useful quick read.

The author begins with a high cấp độ overview of Bitcoin. Swan says that the term “Bitcoin” actually refers lớn 3 things: the blockchain, the protocol, and the currency. The concepts of Blockchain 1.0, 2.0, & 3.0 are introduced. Blockchain 1.0, which is the use of the blockchain for decentralized money and payments, is discussed in the intro. She notes that blockchain is a “push technology” where a user pushes the relevant information lớn the network for a given transaction, whereas credit cards are a “pull technology” where a user’s personal information is on tệp tin at all times khổng lồ be pulled for any authorized transaction. Being a push công nghệ avoids the need to store user information on the network, & in turn means the blockchain is not vulnerable to lớn hacker identity theft attacks. Swan also discusses wallets, again at a very high level, & Bitcoin’s regulatory status as of the date of writing. The introduction is fine, but I think a bit too high màn chơi. A bit of detail inlớn the importance of mining and decentralized transaction verification would have sầu been appreciated. However, this was the first time I read about Bitcoin/traditional banking as a push/pull giải pháp công nghệ, so points for that!

Chapter 2 is a discussion of Blockchain 2.0, which is the decentralization of general markets and the transfer of assets other than currency via the blockchain. The key idea, Swan states, is the decentralized functionality of the blockchain which leads lớn the ability to register, confirm, & transfer all manner of contracts & property. Use cases include financial services such as foreign exchange and payments, betting, & crowdfunding via an ICO. Here, the author seems khổng lồ lump crowdfunding và ICOs together, but they are distinct. A major difference between crowdfunding và ICOs is that in a traditional crowdfunding campaign, investors are completely aware of the product & when lớn expect its completion, & more importantly, they can compare it lớn existing products khổng lồ determine its value. ICOs, on the other h&, provide funding for a company that’s often not entirely defined, & therefore the company’s value post-ICO is not completely certain. I suspect this is why so many ICOs fail. Anyways, I digress. After mentioning crowdfunding & ICOs, Swan goes on to discuss smart property and smart contracts, & the use of smart contracts in DApps và DAOs/DACs, or Decentralized Autonomous Organizations/Corporations, where a DApp/DAO/DAC essentially is an application/organization/corporation governed by smart contracts. To be thorough, a smart contract is essentially a blockchain-encoded agreement between two parties that will automatically exedễ thương under some given condition, with no requirement of trust between the parties.

Next, Blockchain 3.0 is discussed under the title “Blockchain 3.0: Justice Applications Beyond Currency, Economics and Markets,” or decentralization of concepts beyond currency và assets. This is where the book starts khổng lồ become more like a các mục. Several Blockchain 3.0 use cases are given. By coupling big data prediction analytics with the blockchain, predictive task automation can be facilitated. The blockchain can be used for distributed censorship-resistant organizational models, digital identity verification, and digital asphối protection. The idea of a “personal thinking blockchain” is discussed, where ones thoughts are recorded on the blockchain for post-stroke memory restoration, which I think is pretty crazy but pretty awesome. A political use case is mentioned, that is, blockchain governance services where residents could pay for government services in a customized “Starbucks coffee order” manner.



Blockchain will change the world!!!! Woo!

The discussion of Blockchain 3.0 continues in Chapter 4 where the author discusses the efficiency of blockchain uses, which is nothing too exciting if you’re fairly well-read on the topic.

The chapter after, titled “Advanced Concepts,” (which, by the way, ironically don’t turn out khổng lồ be that advanced) discusses what money is — stored value, medium of exchange, unit of account- & demurrage, which I found interesting, since I’m not an economist và hadn’t heard of this before. A “demurrage currency”, Swan describes, is deflationary và action-inciting in that one is encourages lớn spkết thúc the currency before its value is lost, thus encouraging economic activity. Guaranteed basic income is used as an example of the power of a demurrage cryptocurrency. To reduce income hoarding, a GBI-token could be given that could only be spent in the week of issuance.

The final chapter, before the conclusion that I will skip in this summary, discusses limitations to the blockchain, and acts as a sober contrast to lớn the previous five sầu idealistic chapters. This chapter is similar lớn the chapter that discusses efficiency, in that there’s nothing new if you’re well-read on Bitcoin.

I enjoyed the book. It got me excited about the power of blockchain công nghệ. However, I felt lượt thích the book was a bit too fantasy-lượt thích, more like a manifeskhổng lồ for all possible blockchain applications, with little to lớn no mention on limitations. Sure, there was a whole chapter on limitations, but if the book was a person, it would be someone screaming “Blockchain is the best! It can vì chưng everything!” và whispering “by the way, this might not even work.” It was quite utopic actually. So while I enjoyed it, I’m not sure what I actually gained from it. It would’ve been more useful to lớn discuss applications & implementations to lớn make it feel a bit more real, or a chapter on comtháng misuses. I can say I understvà the business value of the Blockchain quite a bit better, actually, but I’m still unclear on how it can realistically be used.

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Rating for Blockchain: Blueprint for a New Economy: 3 out of 5. If it wasn’t so enjoyable I think I’d give sầu it a 2.