Imagine if I had a coupon that could be directly exchanged for a free pizza from Pizza Hut. I can go to a copy machine and print thousands of copies of the coupon. This allows me to go to two Pizza Huts and redeem that same coupon. This is called double spending.
Double spending is a huge problem in the real world. It was such a huge problem that the government created an institution to keep track of how money was being spent. However, we have learned that centralizing currency is not the best method to keep track of our money. Massive corruption and the philosophy of ownership have turned the minds of the brightest economists and engineers.
ENTER — BLOCKCHAIN
Let’s start with what blockchain is. Blockchain is a public ledger that is encrypted with incredibly difficult mathematics that confirm actions, based on the affirmation of previous actions. An action is anything that is considered work online. This can be transactions, data storage, etc. Each group of new actions is called a “block.” These blocks are linked together by hashes that define where the blocks are in cyberspace.
The blockchain by design is completely trustless and decentralized. It cuts out the various amounts of middlemen that need to approve your actions in the digital world. For example, every single transaction that you have made from your phone had to involve at least 2 middlemen. The first is your commercial bank. You have to hook up your device to your bank account online, and the bank decided if your funds are released. The second is your payment app. Whether it’s Venmo or Paypal, most online transactions involve a centralized ledger for instant or short term transactions. As we know, centralized ledgers are not trustworthy from both a penetration and corruption stand point.
Here’s another problem, each time you loop a middleman in, they have to take a cut. Transactions service is a data heavy field that requires millions of dollars to run. Paypal needs to spend millions on protecting their database alone. So each payment that you make with third-party companies means that somebody is losing out on money. That somebody is most often the users.
Blockchain in its core is decentralized and trustless. The benefits to implementing blockchain to your system is increased transparency and incredibly accurate tracking. The ledgers become permanent as they are loaded on nodes internationally, reducing the fear of a crash. In addition, they streamline costs by cutting out third party services.
Image By Hitesh Malviya / It’s Blockchain
This is not to say that blockchain is perfect. The fact that we are still deciding what the best way to scale transactions proves that we are still at a neophyte stage. We are plagued by clogs in networks and massive fluctuation of prices. However, we need to remember that these symptoms are normal when you look at the emergence of any new groundbreaking technology or asset class. The symptoms will eventually sort themselves out as time tests the immense durability of blockchain technology.
HOW BLOCKCHAIN IS MAKING MY LIFE BETTER + PRACTICAL USE CASES
One of the more poetic things about blockchain technology is that it equalizes spending and assets in an incredibly unique way. Take the South Asian floods for example. Flooding and landslides took more than 1200 lives across Bangladesh, India, and Nepal. People lost their homes, cars, and stocks of food. What people don’t think about is how much money they lost. Thousands of people in South Asia are unbanked. They simply can’t access the ability to store wealth. So when floods or earthquakes devastate their land, they are truly left with nothing.
This simply doesn’t need to happen. The people of South Asia all have access to the global network through their smart phones. Their financial suffering could be lessened in natural disasters if these people had access to a storable, transferrable asset class that was internationally accepted. Then, they could liquidate their savings through a computer or a friend’s smartphone to start their lives over again.
Blockchain allows this to be possible by removing the need for a bank in the first place. The reason why people are unbanked is because third party institutions either don’t care or need to keep these places impoverished for cheap labor. Blockchain will give people in developing nations the chance to actually own their value and work.
This is good for businesses as well. As a leader at my company, I try to create a culture full of appreciation and assigned credit. I truly believe that keeping my employees satisfied in their life will increase their productivity in the work space. By paying employees a percentage of cryptoshares, I can ensure that they will have something to lean on in times of hardship.
Building rapport in relationships converts into loyal workers who truly understand the brand and process. In a sense, I am directly attributing value to their space in the chain of command. They work hard and see something that is useful and has direct value.
Image of the Playstation Logo / Mike/ The More You Nerd
I am a huge fan of Craigslist.com. If I’m buying any piece of entertainment technology, such as a PlayStation 4 or a graphics card for mining, I always check Craigslist for deals. This is very true of EBay for me as well. Recently, my attempts to buy a PS4 for under 150 USD have been thwarted by various amounts of scammers. These people will initiate texting with you by questioning your legitimacy. After the initial text, they ask for your sensitive Google Authenticator to prove that you are a real human. Of course you know that your Google Code gives you access to your email and any financial service that is tied with it.
We can apply this problem to the situation above. In disasters, a crucial part of survival is immediate purchasing power. In a lot of situations, people pay for relief and aren’t given any, whether it’s insurance or aid. It is incredibly hard to track where your fiat goes once you transfer ownership of it. With blockchain technology, you know exactly who you’re currency is going to. In addition, you can track which wallets that wallet is transferring currency from. It becomes simpler to enact legal action on fraudulent insurance companies and relief services.
To tie in the PS4 example, a service that utilized P2P payments as well as a vendor ranking system over the blockchain would vastly reduce the amount of scam services. A half-baked example of this was the long gone Silk Road. While they sold incredibly illegal goods, their vendor system was some of the best commercial work I have seen. People held their drug dealers accountable for the quality of their products in the early 2010s. That is something unheard of prior to blockchain technology.
Another direct application of blockchain for e-commerce is identity protection. We have a client, BaaSid, who created a new way to decentralize identification databases. It works through their uniquely engineered Split ID engine. Split ID takes your personal information and fragments it into millions of pieces. These pieces are then distributed on the blockchain and stored. The original copy of the data is then deleted from the platform entirely. This makes scams through personal information less likely to happen. Things like Google Authenticator may not be needed as blockchain application like Split ID become normalized.
WHERE WILL BLOCKCHAIN BE IN 5 YEARS — MAKING THE WORLD A BETTER PLACE
Image By Daniel Medina
Currency needs to be updated just like everything else. I think that a future with blockchain is inevitable. I see people using cryptocurrency to transact everyday items such as coffee or furniture. In addition, I see people using blockchain integrated platforms. Take China and pork for example. A major meat corporation is using blockchain technology in order to do quality control on their pork. Their packaging features a QR Code that contains information such as name of farm, how far it’s traveled, and who processed the meat. That is mind blowing.
Let’s take Split ID and BaaSid once again. Facebook, Google, and Amazon are platforms that millions of people use internationally on a daily basis. Services like Amazon have become so prominent that they have become thought leaders whether it’s memes or business ideas. These business spend billions of dollars doing research and development solely on penetration protection. Facebook was just recently involved in a multimillion dollar scandal with Cambridge Analytica. Your online identity is so crucial to your survival at this point. These scandals are truly unacceptable.
With BaaSid, you can protect your client’s identities because there is no central database to hack. The effort to crack millions of nodes to gather pieces for one ID theft is not sustainable for the hacker. Blockchain can solve problems that have plagued mainstream billion dollar markets since the birth of the internet.
Events like this will be so normalized that our children will consider these processes mundane. Projects and teams will start chasing after the success of Chinese blockchain integration. Information services, education, job creation, all of these services and actions will one day be placed on the blockchain. Blockchain gives us transparency and allows the consumers to control the quality of the product. I don’t understand how that isn’t going to make the world a better place.
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