Blockchain: A Child of The Internet
Can the Internet Handle 2.5 Quintillion Bytes of Data Daily & Prevent Cyber Attacks?
Industrial companies, financial institutions, the engines of the world economy, are embracing AI, machine learning and blockchain technologies to improve efficiency and security in the 21st Century. AI, machine learning, and blockchain will contribute to the 79.4 zettabytes (ZB) of data produced per year by 2025.
Simultaneously, new types of crime, espionage, hacking, and warfare are affecting consumers, enterprises and governments on a daily basis. The vulnerability of critical infrastructure such as utilities, the IoT, the web itself to Advanced Persistent Attacks (APT) has been called a national security threat by the US Defense Department. Cybersecurity Ventures estimates damages related to cybercrime will exceed $6 trillion a year by 2021.
Because of the inherent vulnerability of today’s information systems the model of centralized data management is going the way of the dodo bird. Decentralized databases that cannot be taken down or hacked are needed to run the world and its economy in the 21st Century.
ARPANET: The Origin of Decentralized Computer Systems
The idea for decentralized databases can be traced back to 1973 and the Advanced Research Projects Agency’s (ARPANET). The US government had become concerned that a nuclear attack on the US could knock out centralized communications systems. The country needed a decentralized command and control system that would keep running even if a high number of nodes were destroyed.
ARPANET, which eventually became DARPA, based the new “network of computer networks” on Transmission Control Protocol (TCP), Internet Protocol (IP) or TCP/IP. This setup has worked for four decades but it’s old technology that hasn’t aged as well as many would have hoped.
Blockchain’s Early History
Blockchain was born with the publication of the Bitcoin whitepaper by Satoshi Nakamoto on January 10, 2009 in the midst of the Global Financial Crisis. There were earlier attempts to build such a system including Stuart Haber and Scott Stornetta who created timestamping service using a cryptographic hashing algorithm. No one knows if Satishi Nakamoto is a real person. He could be Hal Finney, Nick Szabo and other Cyberpunks, Elon Musk the creator of PayPal or a group of people. We probably will never know.
Two major global trends that must be overcome for the world to move forward in these challenging times are solving 1) the inherent vulnerability of centralized computer systems to hacking and 2) chronic economic and social inefficiencies and issues caused by centralized governments and financial institutions unable to deliver services and distribute capital in an efficient manner.
Blockchain based, decentralized systems will help people everywhere, including roughly 2 billion unbanked, join and contribute to the global economy and have much greater control over their lives and personal information. Blockchain will help everyone establish their true identity which is impossible with the current DNS system. There are a number of solutions including IBM’s Verify Credentials, Monero, PIVX and others.
Blockchain: The Mining & Metals Industry
Blockchain is expected to transform the mining and metals industry by:
- Reducing the amount of paper exchanges involved in shipping which usually involves many intermediaries. Blockchain will significantly reduce or eliminate delays such as cargo being held up in port due to a lack of paperwork.
- Speeding up transactions across the value chain due to the synchronization and immutable records provided by blockchain.
- Improving accountability, compliance, transparency to meet regulatory responsibilities.
- Recording and storing information on end to end tracking of minerals and ores.
Blockchain & Cloud Storage & Computing
Blockchain benefits to cloud storage and computers are the same as with other industries. Cloud storage platforms would become less vulnerable to hacks or attacks that compromise an entire system and cause data loss or compromise. Some of the players in this space include Filecoin, a decentralized Amazon Web Services; Storj and Siacoin.
Blockchain & Forecasting
Because blockchain technology provides a highly accurate immutable ledger of transactions companies in the forecasting business will have better data on which to perform algorithms, make predictions and provide valuable information. Augur is one of the blockchain projects in this space and runs a prediction market.
Blockchain & Supply Chain Management
The strength of blockchain to provide and process more secure and open monitoring of blockchain transactions is a perfect solution for supply chain management. As products move from manufacturer, through intermediaries and on to customers every stop along the way is recorded as a permanent decentralized transaction that is immutable. Players in this area include VeChain, Provenance, Cardano, IOTA, Hijro and Skuchain.
Blockchain & the Industrial Internet of Things (IoT)
According to CBInsights “IBM and Samsung have been working on a concept known as ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry), which uses blockchain-type technology to form the backbone of a decentralized network of IoT devices.
Industrial grade blockchain companies including IOTA, Cardano and VeChain offer public ledgers for billions of Internet of Things (IoT) devices that will be able to communicate with each other autonomously, process transactions, manage software updates, smooth energy management and encrypt at the hardware level.
Additional technologies that will be transformed by blockchain.
- Energy Management
- Business/Corporate Governance
- 3D Printing & Manufacturing
- Waste Management
- Construction, Architecture & Building
- Financial Products & Services
APQC Infographic: Current Levels of Adoption of Blockchain
The American Productivity & Quality Center (APQC) is the world’s leading authority in benchmarking, best practices, knowledge management and productivity improvement. According to APQC the adoption of blockchain is most advanced in logistics, procurement and supply chain management.
Enter Decentralized Finance (Defi)
As the latest and arguably the worst global financial crisis unfolds before our very eyes and governments across the world are printing fiat currency in the trillions of dollars it seems more and more likely the chickens have come home to roost. The United States, for example, has added nearly 10 trillion to its debt in a few short months.
Cryptocurrencies, like Bitcoin, are digital currencies that have a finite supply. Under no circumstances could anyone convince Bitcoin holders to expand the supply of bitcoin because it would lower the value to each holder’s wealth much like happens with US dollars.
Not only does Bitcoin enhance security, it also improves accuracy of transactions, increases information sharing and most important of all, disintermediates the legacy financial system. In the same way companies like Facebook who sell personal information of its users, blockchain social networks will allow users to have control over their personal information and get paid directly by companies seeking their personal information.