Start of a Blog Series on Blockchain Technology, Cryptos and the insane and exciting World we live in right now. Information on me at the end of the Article.
##Blockchain: The Basics of a game changing technological revolution.
The World has gone through a series of technological shifts which always were disruptive, meaning the fundamentally changed a limit that was in place beforehand.
We all have heard about movable type around 1450, invented by Johan Gutenberg. It revolutionised information: Information was stored in cloth-printed Foliants and Handwritten Books by Kings and nobles, and often hidden away in monasteries.
Movable type allowed information to break out of this and be available at affordable prices for even the peasants. In an instant, Information could be transferred over wide areas and to a lot of recipients.
Around 1780, the Industrial revolution started - represented by the steam engine, which traded in electricity for horse- and manpower. This brought scaleability to a new Level and allowed many new industries to flourish.
Around 1975 a new revolution began - the invention of the internet and email. Information could be anywhere on the globe in an instant. And best of all, it was nearly free to use. We utilize this technology until today to transfer billions of bits and bytes throughout the whole world in every second.
But like all technological shifts before, it isn't perfect. What it's missing is trust.
What we actually do if we transfer information is transacting. And most of the transaction on the internet are either untrusted or through a centralized middleman which we chose to trust. Paypal for example - If we buy a book on Amazon and pay via paypal, we trust our bank to send the money to paypal, we trust paypal to send the money to amazon, we trust amazon to send the book, we trust our shipping company to deliver it. And we do this because it is natural to us - we were born with the concept of middlemen in our minds.
We accept EUR or USD Banknotes as mediators for any kind of transaction, and banks as middlemen to secure these. Because it is higly unpractical to negotiate with everyone we want to make a deal with. How many Steaks exactly is a new Smartphone? Money makes it easy. But again - we trust in Banks to secure our funds and politics to secure the banks.
There are two kinds of trust in economic exchanges: Institutionalized and Process based. First one is why we open a bank account. Because we trust the bank to keep our money safe. Process based trust arises when we expect processes to have a predictable outcome. For example throwing a coin into a vending machine is due to the fact that we trust the machine to process the output to us.
Most of the economic transactions we do today on the internet are based on institutionalized trust, trusting companies politics and people. Blockchain allows the process based form of trust to be implemented, eliminating the need for middlemen.
So a transparent and verifiable system that operates independently from people i have to trust is nothing short of revolutionary.
The Blockchain is an untamperable chain of information, which can't be altered due to its decentralisation. Whatever is inside, will stay like it was written into. And the blockchain is totally transparent. If you know a specific address, you can see what happend to this address from its first transaction on. This is a concept that was not there before.
At the latest somewhere in the 90s even the last grocery store realized, that they needed to be "on the web". Websites became mass adopted. If you found a Company, you plan in a website.
The need for Trusted transactions is something found in nearly every business concept, even the smallest ones. In 5 years from now, nearly everybody will use blockchain technology everyday, even if he does not know it.
No. Bitcoin and all the other Cryptocurrencies are just a product of a blockchain, or a platform on it (like Ethereum). The insane market around Cryptos is just an indicator about how people adopt the new technology and what hopes they price in. And these are flying high.
I will continue this series soon with Basic Information about everything Crypto & Blockchain. Thank you for your appreciation!
I am a Founder, Blockchain Enthusiast, Cryptoinvestor, Nerd and Photographer, living in Hannover, Germany. I twitter randomly at https://twitter.com/SirCryptonite
