Blockchain, Smart Contracts, and Ðapps - what is it?
Recently, Bitcoin have gotten quite a bit media attention, and for good reasons - the digital currency skyrocketed suddenly, and it drew a lot of attention to Bitcoin, but also other digital currencies e.g. Ether, Dash and Litecoin, and more prominently, the Blockchain technology that Bitcoin is built on.
But what exactly is Blockchain technology. As I am writing this, I am no expert myself, but I want to share my research with you here, and hopefully answer some of the question you may have, that I certainly struggled with.
So what is Blockchain?
You are probably familiar with Bitcoin. If not, your can read this guide, but in brief Bitcoin is a digital currency, also known as a cryptocurrency, which is apparently incorruptible and completely decentralized meaning no government control it. It lives entirely on the internet, where it is bought and sold for goods and services.
Why you should pay attention to it?
The technology Bitcoin is build on is called Blockchain - an emerging technology that have the potential to create the next Bill Gates or Mark Zuckerberg. Yet only 20% of corporate executives have heard about it, and to many it seems to complicated to utilize in the mainstream. It is exactly the same feeling people felt when the first computers saw the light of day, and then again when the internet went live.
According to the World Economic Forum (WEF), the blockchain ecosystem will store 10% of the world's GDP ($101 trillion) by 2025. At the time of writing, the total market capitalization for all blockchain tokens combined is $75 billion. If the WEF is correct, this means the total market capitalization will be $10.1 trillion by 2025. The predictable areas blockchain technology is set to transform cover financial services, insurance, cybersecurity, elections, energy, logistics, identity, legal, governance, and healthcare, for example. In conclusion, if the estimates by the WEF turn out to be accurate, the expected growth for the blockchain ecosystem should be approximately 13,333% within the next eight years. Anything above this percentage construes a bubble, hence we still have a long way to go.
We have already seen how blockchain have impacted the financial world but attracting masses of investors. Recently, 30 companies incl. Microsoft, Intel, JP Morgen and many more Enterprise Ethereum Alliance (EEA.) with the purpose of utilizing blockchain technology for future application. So there it seem there are some potential in it after all, and that you should probably pay attention.
Disrupting Corporate Structure
Around the blockchain, a new type of organization known as a DAO (decentralized autonomous organization) have emerged. The idea is to have a business tructure without no management or board of directors - purely investor based. You make proposal for a project or task e.g. make an integration to another platform, and the members of the organization vote on the idea.
No one have autonomous control of decision-making. While the original DAO have been subject to controversy due to a hacker attack costing them several millions in ether (another digital currency) more have sprung up e.g. Dash.
Smart Contract is an idea building on blockchain to verify an automatic payout, should the terms of in a contract be met or violated given the nature of the contract. These smart contract is the core of what is known as Etherum, which the blockchain all the big companies mentioned before invested in.
To explain it with a simple example: You and a friend discuss which way the S&P500 Index will go a month from now. You decide to bet $100; bet it will rise, and you friend bet it will fall. You write a smart contract which tracks S&P500 start from today, and again precisely a month from the day it is signed. When the month have passed, it is lower than it was in the beginning of the bet, and the smart contract transfer the money directly to your friends digital wallet.
Disrupting everything else
We have only seen the top of the iceberg. However, as of now not many people are intimately familiar with the technology which means limited availability to the public (feels like the internet in the beginning of the 90’s right?). But there are ways, and those are called Ðapps [decentralized applications]. In essence, Ðapps are the equivalent to web applications with the one difference of leveraging blockchain technology. You can find Ðapps for everything from marketing to poker apps.
If you know anything I don’t or have corrections, or just want to have a chat about the opportunities of blockchain, feel free to get in touch with me on LinkedIn on Instagram DM. If you enjoyed this article, I’d TOTALLY appreciate it if you clicked the thumbs up and shared it. Comments? Yes please – I want to hear from you ☕