One commonly hears from promoters of cryptocurrency lines like:
“Currency is only the first use-case!”
“Satoshi’s great gift is the blockchain, the foundation which allows Bitcoin to exist at all.”
More recently, we just heard from the Bank of England that:
“The key innovation [of digital currencies] in regard [to payments] is the introduction of a ‘distributed ledger,’ which allows a digital currency to be used in a decentralised payment system. Any digital record of currency opens up the possibility that it may be copied and spent more than once. (…) Rather than requiring users to have trust in special institutions, reliance is placed on the network and the rules established to reliably change the ledger.”
In fact, it honestly seems like EVERYONE is focused on the blockchain, rather than on Bitcoin itself. Pretty much everyone who likes one seems to like the other, but one could not exist without the other – Bitcoin needs a blockchain, but the blockchain doesn’t necessarily only create Bitcoin. So here we are, in the nascent days of this astonishing achievement of human ingenuity – and what have we got to show for it?
At current, blockchain technology has been used for:
1. Currency. I hope no more explanation is needed for this first one.
2. Payment systems. Bitcoin and the Bitcoin-like altcoins are this, yes; however, I more intend to draw your attention to the distinct differences between those and systems like Ripple and Stellar. One should also remember to consider BitPay, GoCoin, Coinbase, and the other payment processors here – their cost-lowering innovations can only occur due to the blockchain technology allowing them not to have to devote time to double-checking data.
3. Proving intellectual property rights. Proof of Existence is the example I most enjoy using for this. It’s a very simple system – you submit an SHA256 digest of your work, it spits out a Bitcoin address, you send a small amount there, and ta-da, you can now prove at any later point in time that you had access to a document that results in a specific SHA256 digest at whatever point in time you “proved” it. You can take this farther than just the written word – open up a video file, audio file, image file, or whatever else you can think of in Notepad, and you can “prove” that just as easily. And the best part – you don’t have to reveal to anyone else what the digest was of until you need to.
4. Asset ownership. The NXT Secure Asset Exchange and the Counterparty protocol are good examples of this – they’re digitized asset ownership and asset issuance platforms. Peer-to-peer distribution of corporate ownership? I’m sure that won’t be at all impactful in the future.
5. Censorship resistance. This is tied in with uses as a currency, but the decentralized nature of the blockchain does things no one has ever been able to do with a currency before. Anonymous, The Pirate Bay, Julian Assange; Dorian Nakamoto, Sean’s Outpost, Doge4Water. Funding for activities some would prefer be not allowed to be funded, and funding for charitable ideas that otherwise might have been ignored, but have been embraced instead due to the ease of donating.
6. Censorship resistance (again!). Not just currency-based censorship evasion, but internet domain censorship evasion as well, through Namecoin and .bit domains. At current, it’s not fully operational for most users – though it will be in time. These new domains are the next internet frontier – providing complete immunity to interference by nefarious third parties.
7. Greatly improved personal data security. You could say that this has been available ever since PGP was introduced, but the blockchain has made it much easier and much better. Using a Bitcoin address to verify yourself, as in onename.io, and then using that account as your authentication for many others is a much more secure system than the currently common “Connect with Facebook/Twitter/Google+”.
It has been five years since the start of the blockchain revolution. It promises to be a bloodless revolution – but don’t expect that to mean a lack of societal upheaval. This is only what has already been done. There is much, much more yet to be created, yet even to be imagined. Manufactured obsolescence is on the way for so much of the world we know nowadays. Currency is a powerful and interesting application, one that is undoubtedly destined for the history books – but when they talk about early ‘10s, far in the future, they won’t be discussing the Bitcoin revolution; they’ll be discussing the blockchain revolution.