“Mortal as I am, I know that I am born for a day.” -Claudius Ptolemy
For those who have forgotten some of the things we learned in school, Ptolemy was a Greek “mathematician, astronomer, astrologer, geographer, and music theorist” who lived about 1900 years ago. While he covered a lot of disciplines, the common thread seems to be that he dedicated his life to pushing knowledge forward and always asking, “what comes next?” With that in mind, today we’ll wrap up this initial crypto adventure contemplating what may be on the horizon for crypto and blockchain (though, as we’ve covered many times already, and I’ll be sure to remind you again, humans are terrible at predicting the future).
What’s here already
In Part 6 of this series, we briefly covered some uses of Ethereum, some of which may at least sound familiar: Decentralized finance (Defi), Decentralized Autonomous Organizations (DAOs), Web3, and Non-fungible tokens (NFTs). Those categories are just several of many use cases. This Supplain article outlines 19 applications of blockchain, but I like to think of them in terms of how they may help the world – which generally comes down to some combination of increasing transparency, efficiency, and integrity.
Process Improvement
We already know that blockchain makes it possible to send payments from one phone to another (or one crypto wallet to another), with no bank account, while removing traditional financial intermediaries from the equation. But imagine truly integrating the global supply chain from sourcing raw materials, across transportation solutions, into factories manufacturing the products, and ultimately to the end-consumers who buy those goods. Connecting those dots (in a decentralized and secure way), while also helping to make each of the underlying processes more efficient and more easily monitored, stands to enhance the world of logistics significantly.
Smart contracts can not only securely automate the various handoffs between counterparties and facilitate payments (and settlement of those payments) in better ways, but they should also streamline traditionally clunky transactions, like real estate purchases. Will we eventually see the end of the standard practice of “45 days to closing” and the usual last-minute scrambling to get appraisals and wires submitted before a home purchase? Perhaps. Just perhaps.
Digital Integrity
The NFT movement has come about because blockchain has made it possible to identify and track specific ownership of unique digital assets. However, as the Supplain article notes, that concept also applies to music royalties, content creation, gaming, and copyright infringement. Blockchain can ensure that owners of intellectual property (IP) are appropriately compensated while regulating the use of the content by only permissioned third parties.
There is also an incredible amount of vitally important information that has nothing to do with royalties, such as securely maintaining and sharing personal, healthcare, manufacturing, and ownership data. More reliable data managed with integrity should translate to smoother processes, cost savings, and defense of property rights. Conversely, it should also mean a much more arduous world for nefarious endeavors like money laundering (ironically also one of the great fears of crypto).
High-five for fighting misinformation
Front and center in today’s world of instant mass-sharing of photos, videos, memes, and articles, is the notion of misleading information or outright misinformation. Blockchain could be a way to a) ensure that data is unadulterated from what it was originally intended to be and b) provide an audit trail on when, where, and who it came from – allowing users to decide better what’s real and what isn’t. The New York Times even ran an experiment using a basic blockchain to see how this could work with tracking a photo on a social media platform. Along the same lines, blockchain may be critical in the fight against deepfakes.
I’d vote YES!
As outlined in this article from the chamber of digital commerce, perhaps “The Future of Voting is Blockchain.” If you don’t live under a rock, you may have heard of the way-too-long debate regarding alleged widespread election fraud after the 2020 US Presidential Election. Time is the scarcest of resources, and we all have better things to do with our lives. At the same time, it’s “game over” for any democracy that can’t trust its election process, so election integrity is of utmost importance. So, if blockchain is the answer to undeniably tamper-free electronic voting, then sign me up!
Not so fast. As usual, there’s another side to the story, in the form of outspoken opponents of electronic voting – not necessarily fearful of the integrity of the blockchain itself, but more so the authenticity of the devices and voters. For instance, if a phone can be hacked and used to vote according to a hacker’s wishes, it could potentially result in widespread election manipulation (as opposed to paper ballots, which must be attacked one at a time). That kind of influence wouldn’t be reflected in the integrity of the blockchain, and the vote tally would appear perfectly unscathed.
It’s a fair point. So, is the solution to electronic voting even MORE blockchain? If the end-user devices are what we’re worried about in migrating to blockchain-based elections, could blockchain be integrated into those devices to ensure the integrity of votes? This question was just speculation on my part, but then I found that cryptophones and blockchain operating systems already exist – so that idea doesn’t seem too far-fetched. The more significant challenge may be getting everyone a secure blockchain device (that could be a while, as they’re currently expensive). Electronic voting may need to wait if there isn’t a way to trust most people’s home computers or phones. However, it’s exciting to think electronic voting could eventually be standard practice, if only to do away with inconvenient poll trips. And if it doesn’t require end-to-end blockchain integration, it may be here sooner than later.
What we fork-aht: These are some odds and ends that we haven’t covered in this series but are worth mentioning before we wrap it up.
Forking: A “hard fork” is how Bitcoin cash came into existence from the original Bitcoin blockchain. Investopedia defines it as a “radical change to a network’s protocol that makes previously invalid blocks and transactions valid, or vice versa.” Hard forking requires ALL nodes (aka miners) on the network to upgrade to new rules, and new tokens are issued for the fork. An easy way to think about it is like a fork in the road, where the old road still exists (Bitcoin), but now there’s also a new road (Bitcoin cash) with its own tokens and rules. A “soft fork,” on the other hand, only requires a majority of nodes on the network to adopt the new protocol. Thus, the old rules are still followed, but some new rules can be added. I think this is more akin to staying on the same road, but it has turned from a two-lane road to a three-lane highway – the same path, but there are more places one could drive (or different transaction types) that would still be acceptable.
Radio Shack: in case you didn’t catch it, this recent WSJ article covers Radio Shack’s foray into the crypto world as a means to stay relevant. Yikes. Is THIS crypto’s “jump the shark” moment? I don’t know, but I’ll personally find it hilarious if kids start shopping at “The Shack” again – which hasn’t been a thing since the late ‘80s when we stopped needing TV/Game switches to hook up our Atari systems (feel free to shed a nostalgic tear for the below photo).
LiFi: This whitepaper from NYDIG is mind-blowing (at least to my simple brain) because it seemingly opens a new world of crypto I didn’t know existed. I encourage you to read it; the topic will likely warrant a future Alt Blend of its own. Concisely, LiFi stands for “Lightning Finance,” which refers to technologies built on Lightning technology. Lightning leverages the bitcoin network for new technologies – conceptually similar to what we’ve discussed with new solutions created on Ethereum. At the same time, it’s mechanically VERY different from Ethereum, and considered a “game changer,” at least by the paper’s authors. The potential promise? More-aligned incentives/fee structures and a truly reliable, decentralized way to solve for “stablecoins, NFTs, and tokenized securities.”
Will Lightning technology ultimately be what drives a fundamental-value case for bitcoin? And will crypto and blockchain technologies vastly improve our lives? I don’t know. But I like to think that if Ptolemy were alive today, he’d be doing more than just dipping his toes in the crypto pool, working to make the unknowns known, and bringing greater understanding of the role of these technologies within our collective future.
And that, as they say, is that. Thank you for joining me on this nine-part crypto and blockchain journey. I hope you learned as much as I did. This topic seems to be an infinite universe of information, so I’m sure we’ll have to revisit it in future editions.
Until next time, this is the end of alt.Blend.
Thanks for reading,
Steve
