Within the last few months, the cryptocurrency space has seen tremendous growth. Every day an article can be found touting the analysis from another enterprise or economic mogul weighing in on the debate; is this a bubble? Many liken the phenomenon to tulip mania, the first recorded speculative bubble. A couple years ago, everyone dismissed my enthusiasm for cryptocurrency and blockchain technology, writing me off as a weirdo nerd, but recently it seems as if I’ve been regarded as some sort of savant. I think it’s safe for me to assume that 90% or more of the people I’ve encountered within the community recently are dipping their toes in for the first time. When my staunchly conservative father is sending me text messages to tell me that I should be proud of him because he purchased his first stake in Bitcoin, it really makes me question whether or not this phenomenon is truly a bubble.
It’s All About The Blockchain
On a weekly basis, hundreds of ICO’s are being proposed, developed, or released. 99% of these will probably fail. This recent “gold rush” into cryptocurrency was disheartening to me at first because I felt as if no one really cared for the tremendous value that blockchain, the underlying technology behind cryptocurrency, presents to the world. Now I think differently because this crypto boom is a great introduction to the technology and concepts for the Average Joe with some extra cash to spend, priming the world for mainstream adoption. I really think that blockchain technology will change the world, with or without cryptocurrency, and I’m excited to take part in the advent of this exciting new experiment for humanity. Just like the Internet revolutionized the way we communicate, blockchain technology will change the way we transact between one another. Whether or not cryptocurrency survives, I believe that blockchain technology is here to stay.
Are There Any Examples Of Business Use Cases?
I was asked this question the other day and cited the Hyperledger Project as an example. Started by the Linux Foundation in 2015, the Hyperledger Project was developed to promote and legitimize the application of distributed ledger technologies to business and enterprise operations, independent of cryptocurrency. Hyperledger is actually a conglomeration of projects; Iroha, Fabric, Burrow, and Sawtooth. Each of these focus on a different application. The details of which I’ll focus on in a future article.
The folks at the Hyperledger Project are blockchain purists. They don’t want their distributed ledger mucked up by cryptocurrency, which I comepletely respect, but that doesn’t discredit the use of cryptocurrencies within the blockchain. The entire purpose for developing such a system to include payment was to provide an incentive for participation. Rewarding the miners or nodes who contribute computing power is a good reason to get involved and the amount of energy required provides a further incentive to play by the rules. This is a pretty awesome system and teams from around the world are also working to apply cryptocurrency to business applications.
This series of articles will attempt to explain some of these use cases.
In a previous article, I described the application of blockchain technology to networking. One of the most exciting and established use cases within this industry applies to the management of Internet-of-Things (IoT) devices. IoT refers to the interconnection of pretty much anything with networking capabilities. I really mean anything, not just the practical stuff like Amazon’s Alexa or the Nest line of security cameras, but also the countless other “smart” devices like toothbrushes or even pillows. I spent a couple hundred bucks on a smart toothbrush once and I totally regret it.
More often than not, these devices require connections between one another, and with an estimated 50 billion connected devices by 2020, managing the communications between each node within a network seems like an impossible feat. While IoT really does make our lives easier and cooler, a lot of people are citing security and privacy concerns, which can severely impact adoption rate.
This is where IOTA comes into play. The goal of IOTA is to provide an IoT ecosystem which allows for the interoperability, secure communications, and transactions between separate IoT networks and nodes. IOTA is different though as it’s essentially a blockless blockchain and more like an extension of blockchain itself. It does this using Tangle, which is a form of a Directed Acyclic Graph (DAG). DAG doesn’t require miners at all. With IOTA, those who issue the transactions also approve the transactions. With this system, transactions are nearly instantaneous, eliminating a lot of the issues found in other cryptocurrencies. This makes it ideal for IoT environments where it’s possible for millions of nodes to be transacting and communicating continually 24/7. Since communications are based on asynchronous cryptography, this ensures that the data being transferred can only be viewed or interacted with by the intended recipient, which addresses the issue of security. For a more detailed explanation of IOTA and the Tangle, I encourage you to check out the whitepaper.
That’s Not All
IoT was an easy jumping off point. Of course, I’m only providing a basic, high-level explanation for these technologies within this series. More in-depth articles will also be provided in other areas on this site. Some business use cases that I’ll be covering in my next articles will be supply chain management, property rights, provenance, and finance. Stay tuned and happy hodling!