"Bitcoin & the Blockchain Radar Summit" entries
Widespread blockchain adoption requires understanding between developers and domain experts.
Editor’s note: this post is part of our investigation into the future of money. The full video compilation from our first event, Bitcoin & the Blockchain, is now available.
The vision for bitcoin and the blockchain is unabashedly optimistic, though already it is being realized. More and more technologists, venture capitalists, financial institutions, and even regulators are seeing its long-term potential to transform industries, from financial services to data management to the Internet of Things. In the medium term, there remain hurdles to overcome before blockchain technology can offer sufficiently compelling solutions for the complex financial and technological world we live in, but there is progress to date — and it’s promising.
Blockchain-based remittance vehicles offered by Coins.ph, BitPagos, and BitPesa, though early stage, aim to take a chunk of the $450 billion remittance industry by offering speedier, more efficient, and cheaper alternatives to traditional solutions. BitPay offers bitcoin/fiat payment processing for merchants as well as bank integration. Increasingly, private investors are diversifying their portfolios by purchasing bitcoin alongside traditional assets. Most recently, Coinbase even received funding from a group of blue-chip investors, including the New York Stock Exchange, and launched its own exchange, signaling both greater acceptance by the financial services industry as well as confidence in its future value. Ripple Labs has taken a very different approach with its protocol, permitting the decentralized transmission of practically any currency type — cryptographic or fiat — like an SMTP for money, and circumventing traditional payment networks. And to this end, it’s already inked agreements with Cross River Bank (New Jersey), CBW Bank (Kansas), and Fidor Bank (Germany), with more on the horizon. Read more…
The O'Reilly Radar Podcast: Balaji Srinivasan on the bigger picture of bitcoin, liquid markets, and the future of regulation.
The promise of bitcoin and blockchain extends well beyond its potential disruption as a currency. In this Radar Podcast episode, Balaji Srinivasan, a general partner at Andreessen Horowitz, explains how bitcoin is an enabling technology and why it’s like the Internet, in that “bitcoin will do for value transfer what the Internet did for communication — make it programmable.” I met up with Srinivasan at our recent O’Reilly Radar Summit: Bitcoin & the Blockchain, where he was speaking — you can see his talk, and all the others from the event, in the complete video compilation now available.
The bigger picture of bitcoin
More than just a digital currency, bitcoin can serve as an instigator for new markets. Srinivasan explained the potential for everything to become a liquid market:
“Bitcoin is a platform for programmable money, programmable interchange, or anything of value. That’s very general. People have probably heard at this point about how you can use a blockchain to trade — in theory — stocks, or houses, or other kinds of things, but programmable value transfer is even bigger than just trading things which we know already exist.
“One analogy I would give is in 1988, it was not possible to find information on anything instantly. Today, most of the time it is. From your iPhone or your Android phone, you can google pretty much anything. In the same way, I think what bitcoin is going to mean, is markets in everything. That is, everything will have a price on it — everything will be a liquid market. You’ll be able to buy and sell almost anything. Where today the fixed costs of setting up such a market is too high for anything other than things that are fairly valuable, tomorrow it’ll be possible for even images or things you would not even think of normally buying and selling.”
Understanding the value of the blockchain above and beyond bitcoin.
Editor’s note: Lorne Lantz is a program co-chair for our O’Reilly Radar Summit: Bitcoin & the Blockchain on January 27, 2015, in San Francisco. For more on the program and for registration information, visit the Bitcoin & the Blockchain event website.
I remember the first time I heard about bitcoin. It was June 2012, and I was invited to a bitcoin meetup. The whole time I was sitting there, I thought these were a bunch of computer geeks playing around with nerd money.
At the same time, I felt excited about the possibilities. If what the bitcoin believers were saying was true, it could become something very big. When I took a closer look, I realized why it could be so groundbreaking: decentralization.
Unlike other currencies and payment networks, bitcoin is not controlled by a bank, government, or financial institution. Instead, thousands of computers around the world verify transactions and manage a global decentralized ledger. This innovative technology is called the blockchain, and it provides a unique pathway that allows — for the first time — many computers that don’t trust each other to achieve consensus. In bitcoin’s case, they are achieving consensus on updates to the global ledger. Read more…
A look at the stumbling blocks to blockchain scalability and some high-level technical solutions.
Author note: Vitalik Buterin contributed to this article.
Request an invitation to Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.
“I have no worries that bitcoin can scale, and the simple reason for that is that I know that IPv4 can’t, and yet I use it every day.”
The issue of bitcoin scalability and the phrase “blockchain scalability” are often seen in technical discussions of the bitcoin protocol. Will the requirements of recording every bitcoin transaction in the blockchain compromise its security (because fewer users will keep a copy of the whole blockchain) or its ability to handle a great number of transactions (because new blocks on which transactions can be recorded are only produced at limited intervals)? In this article, we’ll explore several meanings of “blockchain scalability” and some high-level technical solutions to the issue.
The three main stumbling blocks to blockchain scalability are:
- The tendency toward centralization with a growing blockchain: the larger the blockchain grows, the larger the requirements become for storage, bandwidth, and computational power that must be spent by “full nodes” in the network, leading to a risk of much higher centralization if the blockchain becomes large enough that only a few nodes are able to process a block.
- The bitcoin-specific issue that the blockchain has a built-in hard limit of 1 megabyte per block (about 10 minutes), and removing this limit requires a “hard fork” (ie. backward-incompatible change) to the bitcoin protocol.
- The high processing fees currently paid for bitcoin transactions, and the potential for those fees to increase as the network grows. We won’t discuss this too much, but see here for more detail.
We’ll consider these first two issues in detail. Read more…
We must be prepared for the blockchain’s promise to become a new development environment.
Editor’s note: this post originally published on the author’s website in three pieces: “The Blockchain is the New Database, Get Ready to Rewrite Everything,” “Blockchain Apps: Moving from the Jungle to the Zoo,” and “It’s Too Early to Judge Network Effects in Bitcoin and the Blockchain.” He has revised and adapted those pieces for this post.
There is no doubt that we are moving from a single cryptocurrency focus (bitcoin) to a variety of cryptocurrency-based applications built on top of the blockchain.
This article examines the impact of the blockchain on developers, the segmentation of blockchain applications, and the network effects factors affecting bitcoin and blockchains.
The blockchain is the new database — get ready to rewrite everything
The technology concept behind the blockchain is similar to that of a database, except that the way you interact with that database is different.
For developers, the blockchain concept represents a paradigm shift in how software engineers will write software applications in the future, and it is one of the key concepts that needs to be well understood. We need to really understand five key concepts, and how they interrelate to one another in the context of this new computing paradigm that is unravelling in front of us: the blockchain, decentralized consensus, trusted computing, smart contracts, and proof of work/stake. This computing paradigm is important because it is a catalyst for the creation of decentralized applications, a next-step evolution from distributed computing architectural constructs. Read more…