Cryptocurrencies

Understanding the paradigm shift enabled by the blockchain 3D coins I designed can be found at http://www.thingiverse.com/hansjhoffman/designs How many of you have read the original 8 page white paper by Satoshi Nakamoto? It was sent out via a cryptography mailing list back in 2008 and claimed to solve the double spending problem with decentralization. Remove the trusted third party from the equation? Blasphemy! Well, the publication of this idea as well as Bitcoin as its first implementation is what caused the recent paradigm shift — people are eager to remove the middleman! Since cryptocurrencies have been the bulk of the blockchain applications, I’ll start with explaining them. According to coinmarketcap.com, there are currently 704 cryptocurrencies in the digital market. That’s a lot! Below are some of the most popular ones. Source: http://coinmarketcap.com/ as of 10 September 2016BitcoinBitcoin was the first decentralized digital currency that could be sent person-to-person without using a bank or clearing house. Bitcoins are limited and generated at a predictable rate by miners. These miners solve difficult math problems with what is called a proof-of-work which is easily validated. However, there are numerous downsides to this method. Mining results in a fair amount of wasted energy, mining has become unrealistic on common hardware, the current cap of one megabyte per block has resulted in the blockchain becoming “full”, and finally the “tragedy of the commons” is inevitable. People using Bitcoin will have to pay more fees to miners in the future just to have their payment added to the blockchain. Also, the value of a Bitcoin has been extremely volatile over the years and therefore makes “buy and hold” investments or savings accounts risky. On the contrary, it has been immensely useful in facilitating quick and painless remittance transactions all around the world. Here is a really cool website showing the history of Bitcoin for those interested. Additionally, if you really want to have your mind blown, Mike Hearn wrote 3 incredibly insightful medium posts on the recent Bitcoin issues here, here and here. EthereumCreated to build and distribute next-generation distributed blockchain applications. It uses a proof-of-stake, an alternative to the proof-of-work concept. This means you have more Ether you own, the more mining power you have. Vitalik Buterin, the Ethereum creator, has potentially given the world exactly what it needed to spark the widespread development of distributed applications. Too bad a startup beat me to my idea to create a DAPP for property deeds. RippleTheir team has come up with the cleaver Ripple Protocol consensus algorithm (for those math nerds interested in the famous Byzantine fault tolerance problem) which seems to be the new SWIFT 2.0. That is exciting! Ripple connects banks around the world and allows them to offer real time, cross-boarder services to their customers. Settlement times are reduced (to as little as 5–10 seconds) as a direct result of removing intermediaries. Person-to-person remittance is also incredibly easy with Ripple. They have been working with the Federal Reserve System which is reviewing faster payment strategies. Ripple is the most promising blockchain application out there in my opinion and I can’t wait for my bank to start using it. MoneroThis cryptocurrency is geared towards those who value their complete financial privacy. You know how you are… you tinfoil hat, alien abduction, government spying, one world order conspirators ;) Its transactions are unlinkable and untraceable! This all thanks to the cryptonote protocol. Not much else to say here. Coinbase wallet There are many cryptocurrency wallets out there such as CoinVault, Mycelium, Blockchain Wallet, Coinomi, and a gazillion others. However after all my research, I found that coinbase is very reputable and easy to use. I had never used Bitcoin before so I figured the easiest way to learn was to send money to a charity that accepted Bitcoin. I wanted to donate to a charity that would make more people happy, so I chose to send the girls over at GoTopless some Bitcoin. Why not? :) The whole process was easy a caveman could do it. Other blockchain applications Aside from the absurd amount of cryptocurrencies, entrepreneurs are still attempting to uncover the power of the blockchain. We have seen venture capitalists flocking to support startups who claim they will create the next killer app. I personally see the blockchain being useful for solving problems such as public record keeping and additionally with decentralized transfers of value between individuals and banks. I also believe IBM’s IoT blockchain is gonna big. I guess I will know if I was right in a few years! Below are a few cool applications that have recently surfaced that are showing some potential. Storj - Decentralized Cloud StorageDistributed, encrypted, and blazing fast object storage, where only you have access to your data.storj.io Decentralized Prediction Markets | Augur ProjectAugur is a decentralized prediction market built on the Ethereum blockchain. It allows you to forecast events and be…www.augur.net Gem: Blockchain Platform for Smart NetworksGem refines blockchain technology to power smart networks that connect industries.gem.co UBITQUITY - The Blockchain-Secured Platform for Real Estate TransactionsUbitquity offers a simple user experience for securely recording, tracking, and transferring deeds with its SaaS…www.ubitquity.io SteemitSteemit is a social media platform where everyone gets paid for creating and curating content. It leverages a robust…steemit.com Closing thoughts Businesses around the world acting as the middleman are beginning to wonder if they will soon become obsolete. This is a great example of what Clayton Christensen talks about is his book The Innovators Dilemma — innovate from within or die. Let’s see who comes out on top. One thing is apparent though, these are exciting times and there certainly is enormous potential for disruption… in niche markets. TL;DR The blockchain is definitely a revolutionary technology but it is not going to change everything about the world as we know like some technology evangelists are preaching. I encourage you to try out one of the cryptocurrencies such as Bitcoin if you have never tried. I would also read Don and Alex Tapscott’s Blockchain Revolution. Please like and share my post if you enjoyed it! Help support the paradigm shift enabled by the blockchain.