Bitcoin,
Cryptocurrency,
Blockchain:
What is it?
Why should I care?
Morgan C. Benton & Nicole Radziwill
morphatic.com
Key Concepts
- Decentralized → No central authority
- Distributed Ledger → Automated auditing
- Immutable → Cannot be changed (easily)
- Consensus → Built into the platform
- Trust → Really the obviation of trust
- Smart Contract → Business rules enforced
by code
I am not planning to go into any great depth about the technical aspects of implementing blockchain applications today
What kinds of problems can blockchain address?
- Identification/Authentication
- Tracking physical objects
- Registration/Titling
- Voting
- Compensation for Consumption of Digital Goods
- Currency
...Until Now
In the Future...?
Possibilities:
- Un-fake-able (trust)
- Truly global, decentralized
- True control over personal information
Challenges:
- Privacy!
- Increased consequences for identity theft
Identification/Authentication
...Until Now
In the Future...?
Possibilities:
- Smart-contracts auto execute on arrival scan
- Reduce/eliminate escrow
- Distributed manifests for secure chain of custody
- Open and transparent system → fairer pricing
- Track source of food, diamonds, minerals, etc.
Tracking Physical Objects
(i.e. supply chain)
Challenges:
- Customs (think manifests)
- Shrinkage (not the Seinfeld kind)
- Excessive brokers/ intermediaries
...Until Now
In the Future...?
Possibilities:
- Secure, efficient, digital land registries lead to global accountability
Registration/Titling
Challenges:
- Land ownership is fundamental to social mobility
- Corruption and/or poor/non-existent record keeping are a barrier, e.g. The Big Short, Daufuskie Island
Brian Behlendorf, Hyperledger
...Until Now
In the Future...?
Possibilities:
- Enable true (vs. representative) democracy
- Could expand shared decision making at all levels
- Could enable more sophisticated voting strategies
- Reduce corruption
Voting
Challenges:
- Where to start...!
...Until Now
In the Future...?
Possibilities:
- Smart Contract enables an automatic micro-payment for each use of the digital content
- Remove intermediaries; pay goes directly to content creators
Payment for Digital Goods
Challenges:
- Piracy
Cryptocurrency
The Shape of a Bubble
Key Functions of Money
- Medium of Exchange
- Measure of Value
- Store of Value
It's not clear that cryptocurrencies actually fulfill any of these functions!!!
Some Cryptocurrency Buzzwords
- ICO (Initial Coin Offering)
- Crowdsale
- Token
- Bitcoin
- Ether/Ethereum
- Litecoin (+>4,000 others; more every day)
Some Cautions...
- It's still the wild west in the domain of cryptocurrency
- The bubble is almost assuredly being driven by a lot of speculation
- Don't bet more than you can afford to lose
- Don't expect a government to help you if you lose out
- It's not clear what (if any) value is behind any of the currencies
- It is clear that some of the bubble is fueled by ransom
Questions?
