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The Blockchain and the "All for One, One for All" Demise of the Centralized Server

Posted on November 26, 2013 by jessestay

It’s amazing how history repeats itself. Internet history began with the conception of room-filled mainframe computers and “nodes” that would connect directly to the mainframes relying solely on the power of the central mainframe to get their signal and perform various tasks sent to the mainframe. Then came the PC era – an era where every person could have their own computer, and the processing power occurred on the same machine as the display and input device. Following that came the Internet, or World Wide Web, which combined mainframes and servers with personal computers. With the internet, mainframes and servers could be used to connect PCs, all over the world, in a distributed network of various servers all communicating with each other, and relaying information back to the client, the PC.

With the Cloud, we’re back to relying on servers, and we’re relying more on central data storage and processing more than ever before, just like the days of the mainframe. The only difference is our current “dumb terminals” can also cache pieces of information and perform mini processes to reduce the need for internet bandwidth in the process. All of that is about to change though with “The Chain” era as I call it, cryptocurrencies, and blockchain type infrastructure. In this era, we’re moving from lots and lots of servers all over the world, to one single server, distributed across multiple clients (or terminals) all doing their fair share of the processing.

With Bitcoin, I’ve talked previously about the power of “The Blockchain”, a global, worldwide accounting ledger that gets audited over and over again by a massive network of peer-to-peer computers, or “miners” to verify the chain has not been corrupted in any way. This network, as I stated earlier, when put together as a whole, is more powerful than the top 500 supercomputers in the world, combined. The network was designed this way.

In Satoshi’s whitepaper where he proposed the Bitcoin protocol, he suggests “as
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they’ll generate the longest chain and outpace attackers”. As a result, it’s to Bitcoin’s benefit to have a very large pool of honest miners, preventing the possibility of another majority outnumbering the honest miners and providing a false version of the blockchain. This makes for a very, very large public “server”, with lots and lots of computing power, that anyone, and anybody can rely on without the need for central companies, corporations, and even governments in many cases to provide that service with their own powerful servers. In many ways it means it’s near impossible to “lie” or “spoof” inside this type of network!

Imagine the opportunities this opens up. Server resources, DNS, hosting, and even storage servers are no longer a necessity. Instead we can all rely on “The Chain” to access this information. If I own a domain, that record exists on the Chain and the Chain can verify I own it, and any IP information that comes with it when a browser makes a request for that domain. Perhaps IP addresses will no longer be needed at all with the Chain – after all, servers won’t be necessary and I really believe this massive network could be used for storage as well. So maybe your browser also gets knowledge of another key on the chain that contains the content of the webpage.

Of course, all this is theory, but the implications are evident. I’m still weeding out how a lot of this could work in my mind, and so are many, many others. The potential is there though, and we already have the largest supercomputer on the planet that we could be using – the Blockchain used by Bitcoin – we just need to come up with new ways of using it (and many are), and identify the flaws so that we can either fix them, or come up with a new protocol without those flaws. One thing’s for sure in my mind – centrally-controlled servers, in the future, will no longer be necessary. Instead, we will all rely on a massive, P2P network of some sort – be it Bitcoin and the Blockchain itself, or some other open and distributed cryptocurrency model adapted to allow this stuff.

The collaborative economy doesn’t apply just to goods and services. It also applies to technology. The future will be less of a “one-to-one” or “one-to-many”, and more of an “all-for-one”, “one-for-all” model where everyone benefits that participates, and there is no fraud in the process. In the coming weeks and days I’ll share some potential use-cases for this Chain to further show some of its potential. What other use-cases can you come up with using the Chain?

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First the PC. Second the Web. Third the Cloud. And Now…The Chain – Why Bitcoin is Not Just a Currency – It’s a Platform!

Posted on November 23, 2013 by jessestay

What if you could transfer stock to another individual, without a stock broker or stock certificate? What if you could sell your home, without a real estate broker or deed? What if you could sell your car without need for a title or vehicle registration? That’s the concept of the technology behind Bitcoin, and why you need to be paying attention to why this is so much more than just a currency or investment, and why your brand could be disrupted soon if it does not adapt.

The technology behind Bitcoin, the currency that is making little-known software developers millionaires as the price has gone from less than $1 per Bitcoin to $800 per Bitcoin in just a couple years, has the potential to revolutionize the way the world authenticates human-to-human transactions within a matter of years. The technology, or protocol, is called “The Blockchain”, and it has the potential to be so much more than just a currency-driven protocol. It’s an entirely new platform. “The Chain”, as I’m now calling this platform, is incredibly powerful, and I truly think it is a paradigm shift on par with the shift from the mainframe to the PC, the PC to the Web, and more recently the Web to The Cloud.

“Colored Coins”

I had the chance to sit down with some of these Bitcoin millionaires and soon-to-be-millionaires (I’m not exaggerating!) at a local event in Provo, Utah (organized by my friends from the upcoming documentary, “Life on Bitcoin“) called a “Bitmob”. The idea is this (in a nutshell): a group of Bitcoiners approach a local business and tell them they will bring x number of people willing to pay with Bitcoin if the business will be willing to accept it. It’s a great way to get businesses to start accepting Bitcoin as a currency, brings a lot of new customers to those businesses, and overall improves the economy of Bitcoin as a whole.

It was at this meeting that my mind was enlightened that Bitcoin is not just a revolutionary, worldwide currency without central control, but it is so much more than that. A group of developers in the Bitcoin community have proposed an addition to the Bitcoin protocol (introduced by a pseudonomous developer named “Satoshi Nakamoto” in 2008, but with precedence in other standards and technologies prior to that), which allows each Bitcoin transfer to contain a payload of text. They call these “Colored Coins“. This payload of text could be synonymous with writing on a $1 bill the words, “I’ll give anyone who gives me this bill a car”. Then, that person would be held to giving each person that gave them that $1 bill a car. However, attaching this to an encrypted digital transaction that can be guaranteed as authentic, traced between the sender and recipient (by code, not necessarily ID of a human – one fatal flaw in Bitcoin IMO), now you have an even more certain guarantee of that agreement that the entire world can audit and ensure took place. If it is dishonored, the entire world knows (instead of just the people that gave the individual the $1 bill). See this video to get a better idea of how their proposal works – it does a much better job explaining:

Bitcoin is Just One Implementation of The Platform (The Chain)

The power of why this is possible lies in a worldwide “ledger” called “The Blockchain“, basically a ledger similar to an accounting ledger, that each bitcoin client has access to, can’t delete, and proves the transaction takes place. Because the entire world has access to this ledger, there is no mistake in the transaction, and anyone can prove that the owners of the 2 sides of the transaction are in agreement with each other.

The power of Bitcoin is in a vast, worldwide network of connected computers that can all authenticate what agreements were made from which parties. Each of these computers performs computer algorithms to ensure the strength of encryption on each transaction, further ensuring its authenticity. I’m told that if you added all this computing power worldwide, it would equal the power of more than 500 of the world’s top super computers. The number of trades on the network, today alone, outnumbered the number of transactions on Paypal, and are soon to outnumber the number of transactions by Discover Card.

The sheer number of participants in this worldwide peer-to-peer network, the value attached to each transaction (in Bitcoin – the Bitcoin-to-Dollar ration today is approximately 1/$700 and growing), and most importantly the openness of the network, the Blockchain, and the protocol behind it make this new network designed for commerce as scalable as the Internet, and perhaps even more valuable. As you can see, it can also be used for more than just monetary trade. One individual is using it for authentic transfer of files between individuals, for instance.

The thing is it’s the idea of Bitcoin and the Blockchain that makes all this so powerful. There will be numerous additions to the protocol over time, and I’m sure other versions, making this concept more and more powerful. What’s powerful isn’t that Bitcoin exists – it’s that this is the direction it is taking us as a society, and the technology exists today. For that reason this is a very large platform that will have many components to it, just like the web has HTTP and TCP/IP and MAC addresses, and even OAuth, and OpenID that all work together in one. We’ll see the same with cryptocurrency and online commerce in ways that transform commerce and corporate structure as we know today. There are already other cryptocurrencies like Litecoin and Namecoin. Devs and businesses will create their own currency exchanges (I’ll explain that in another post).

Bitcoin is Much More Than Just a Currency

For that reason I see Bitcoin as much more than just a currency. Bitcoin is an open platform designed for commerce. It is the architecture and Infrastructure for all transactions that Jeremiah Owyang mentions in the Collaborative Economy philosophy. Whether in “colored coins”, or another standard, Bitcoin, and cryptocurrency in general, are the platforms that will power every guaranteed human-to-human transaction on the planet. It’s already globally recognized. Each transaction has an intrinsic value (Bitcoin itself is limited in number, giving it rarity, similar to Gold). Each transaction can be proved, with 100% accuracy. And it’s near impossible to forge, unlike traditional currency. And what’s even better is this is all a platform which will evolve and grow, just like the internet.

Bitcoin is what happens when you apply digital and cryptographic principles to accounting. This is as big a change in technology to come to the world as the PC, the Web, and most recently the Cloud. We are entering a new era of human-to-human commerce where the brand, and the government is no longer “the middle man” in these agreements. Is your business ready to handle it? Are we pushing our governments to adapt? I’ll do some articles shortly on ways brands can adapt, and what I’m telling my clients.

Want to know more about Bitcoin? This video will get you started!:

Like this article? It’s freely shareable and can be copied and distributed (or linked to) via Creative Commons Attribution license. Or, just send a tip via Bitcoin!:

Address: 19AdCAbjshRuEFhx4py1Ny7i48s1d6RFi

How Your Cub and Girl Scouts (and Youth) are Being Cheated in the Personal Manufacturing Era

Posted on November 18, 2013 by jessestay

Our youth are in for a wake-up call when they grow up. Gone will be blue-collar work. Gone will be factory and manual labor jobs. Gone will be construction and mechanical jobs. The fact is, machinery, robotics, and computer programming are replacing all of this, in favor of devices average families can buy and set up in their living rooms. It is so important that we get these skillsets to our youth so we can survive as a society as my generation retires and our kids take over.

For long-time followers of this blog, you are well aware of my passion for 3D printing, and predictions for the disruption of modern manufacturing within just years from where we now stand. Within 5 years, it will be very possible for entire, room (or larger) sized manufacturing processes to be taken over by a simple machine in your office through 3D printing. It’s already happening in fact. I call this “The Personal Manufacturing Era”, because it’s the closest disruption we have in modern times to the Personal Computing Era and what it did to the mainframe.

Of course, all youth are affected by this, but there’s one group I want to address more than any, and I think they have the greatest potential to make a difference in this new era of manufacturing – it’s the Cub Scouts and Girl Scouts of America (of course, I’m talking to mostly a US audience here, but you likely have equivalents in your country). Both groups are missing out on a HUGE opportunity here to prepare their youth for the future.

Currently my wife and I volunteer for the Cub and Boy Scout organizations in our area. Each year there is an annual competition – usually it’s the Pinewood Derby. Some times it’s the Space Derby, or Raingutter Regatta. The thing is I’ve always hated these competitions because they focus on skillsets (woodwork, mostly) that are hardly valuable to the boys as they get to be our age. Not to mention that the dads do most of the valuable work for them anyways.

I propose that these boys, and in equivalent activities for the Girls in Girl Scouts (I’m mostly familiar with the boys organizations because most of my service has been there, but girls need it even more than the boys), be exposed to more STEM (Science, Technology, Engineering, and Math) related activities. True, Pinewood Derby does have some engineering that applies. But how much better would it be if the ENTIRE activity was centered around logic and engineering? How about a computer programming competition? Or what about a robotics competition? Kits could be provided to give boys a basic start, and understanding of these, and a fair base to start on.

My concern today is that we’re perfectly okay asking boys and dads/moms (and girls and dads/moms) to build a car they can race from scratch, many of those dads/moms not having previous woodworking experience (I’m one of those), but when we propose that we do a “computer programming competition” or “robotics competition”, two activities that really aren’t much harder to do if a kit is provided to show them how to do it, people say, “It’s too hard.”

We need to get away from this notion of woodworking being seen as a “manly” thing to do and computer programming and robotics being seen as “too geeky” or “too nerdy”. The fact is, our childrens’ futures depend on it! Every “too geeky” statement you make hurts your children and the future of this country, and the world in general.

I’m very worried about the future of our children, and the future of this nation. Cub Scouts, Boy Scouts, and Girl Scouts of America all have a HUGE opportunity here to fix this. They are making steps with new computer programming merit badges, and computer safety programs. I’m concerned they’re not moving fast enough though. To change, these programs need a complete overhaul of the system, one focused on STEM as a main, core component of each program, and outdoor activities to balance it all. Right now it’s much, much too heavily balanced toward the latter.

If you have kids. Take a stand. Reach out to your local Cub Scouts or Boy Scouts, or Girl Scouts organizations (to have the most effect you really need to do this at the district or council level), and let them know you share this concern. Am I alone in this? Are our youth missing out?