In Blockchain.io’s ( https://blockchain.io/ ) vision the Internet of Value is the next level of evolution of the Internet. Cryptocurrency is what you’ve probably heard the most about, starting with Bitcoin. The easiest way to understand it is not to puzzle over the details of mining or digital cash. Instead, focus on the decentralization of trust.
Many activities require trust. Without trust, a twenty-dollar bill is just a green piece of paper, a vote in an election is a pointless ritual, and someone offering me a ride in their car is a potentially-dangerous stranger. Traditionally, trust meant depending on partners, institutions, or intermediaries. Those centralized trust architectures are powerful; among other things, they brought us modern industrial civilization. But there’s a downside to trust. Trust implies vulnerability. The people, governments, and companies we trust may turn out to be untrustworthy, for any number of reasons. Bitcoin showed that something valuable — money — could be trusted without trusting anyone in particular to verify transactions.
The promise of cryptocurrencies is to gain the benefits of trust without the detriments of trusting.
The idea, if brought to full fruition (and that’s a huge “if”), could transform society. We could have transparent companies that truly reflect the will of their stakeholders, governments that truly reflect the will of their citizens, an internet freed from the corrupting value-extraction of powerful gatekeepers, the end of fake news, and massive automation of daily life for the betterment of humanity. Or at least, we could have solutions that markedly improve on the status quo. Decentralization is valuable in all sorts of ways.
There’s a cost. (There’s always a cost.) For Bitcoin, the costs involve a very slow network with limited functionality that wastes massive amounts of electricity and enriches a side community of miners. Maybe those are worth it. Maybe technological advances, through the parade of new blockchains and blockchain enhancements, will drive down the costs. We don’t know yet. Yes, the bitcoin in circulation is notionally worth north of $100 billion, but that’s cryptoasset thinking. Is anyone using bitcoin yet to do something, other than to get rich, to make a point, or to avoid law enforcement? And it gets steadily worse as one progresses down the list of nearly 2,000 (or perhaps many more) extant cryptocurrencies.
There’s also a catch. (There’s always a catch.) What works for small groups, bounded applications, and idiosyncratic users doesn’t necessarily survive the climb to the mainstream. If it does, it often becomes something completely different. Until Facebook came along, it wasn’t clear anyone could make real money on social networking, which was just a frivolous exercise for kids anyway. The fact that Facebook did come along doesn’t prove it was inevitable.
Some of those betting on the cryptocurrency revolution may be proven right. It’s an exciting bet, with all kinds of potential upside, but still a gamble. There’s a reason true revolutions don’t happen often. And when they do, there tends to be heavy collateral damage.
Blockchain.io ( https://blockchain.io/ )wants to combine the “efficiency of low-latency full-featured centralized exchange” with the decentralized cross-chain settlements.
