It’s Time To Get Serious About Blockchains & DLTs
For the past few weeks, I have been spending an exorbitant amount of time immersed in the world of blockchains and distributed ledger technologies. This sector is simply growing too fast to ignore and I have every intention to understand and implement it in some way. On the surface, the blockchain industry exhibits 2 distinct personalities. On one hand, there are masses of young punk kids scurrying about on internet forums thinking cryptocurrencies are their ticket to eternal wealth. Although this is unquestionably discouraging, on the other hand, the underlying technology that these cryptocurrencies are built upon is evolving by the minute, and is being endorsed, developed, and adopted by the largest companies from all over the world.
Now, by no means am I getting involved in the blockchain as a response to the recent explosion in crypto prices, albeit I must admit 10,000% gains are quite enticing. The reason I am spending late nights feverishly studying about DLTs is I do believe a large portion of our future will be hoisted upon blockchains, and I want to be there early, as it is being developed. By doing so, I can learn at the same pace as the creators themselves and can well position myself to extract future opportunities, especially since this technology has not proliferated in South East Asia just yet.
Despite being fairly new – a lot of the prominent organizations involved in the development of this technology is no more than 2 years old – a lot of the financial world is moving onto blockchains, and fast. The developments of blockchains have caught most of the large financial companies off guard, and everyone is scrambling to piece together strategies of implementing the technology on their own. For the time being, the immediate response appears to be to collaborate with large tech companies, invest in whatever appears to have a hint of success, or to develop their own blockchain platform. Like any new industry, the strategy is get involved first then figure out the monetization later.
To most, the blockchain is still shroud in an aura of mystery; built upon the collective computing power from computers all over the globe. Those computers create blockchains, and they seem credible and reliable. Granted, that is all one needs to know to utilize a blockchain, but what many don’t realize is the underlying algorithms that blockchains are built upon are constantly evolving to make new and better blockchains that are more efficient and for different purposes.
Initially, the bitcoin blockchain was created as a response to unreliable financial institutions when the credit bubble burst. Using bitcoins would create a de-centralized system of trust, and would allow people to bypass banks which we all hate to use. As bitcoin developed, the ethereum blockchain popped up as an alternative – a competitor to the bitcoin blockchain, offering solutions to areas bitcoin couldn’t service, but with the same underlying concept.
That concept evolved, and developers then poked holes in the ethereum blockchain as well. Many of the founders then left to start other blockchains that would compete and potentially be even better. I parallel this concept to the computers of the early days. We had Microsoft and Apple, and shortly thereafter many more brands emerged, positioning to improve on what was out there. Specs got better and the computers of today are nothing like they first were. The same is of the blockchain. Ethereum is now considered ‘slow’ and of lesser quality due to their low transaction rate. This is a no-no for a sundry of reasons and other ‘new’ blockchains have fixed this, plus more.
Typically, new blockchains are accompanied by new cryptocurrencies which all claim to be better. ‘IOTA‘ for instance, is a ‘blockless’ blockchain built for the IOT ecosystem, and Streamr is a newer competitor. Tether is a cryptocurrency pegged to the USD. Cardano has created a crypto built off the shortfalls of ethereum and is quickly gaining steam in Asia.
Who cares about these cryptocurrencies? We will never use them in our daily lives anyways, right?
Perhaps, but that’s an ignorant mans thinking. A few short years ago, when Bitcoin was nothing more than a concept, a gentleman one day decided to offer a stranger over the internet to buy him a pizza for 10,000 bitcoins. This particular gent happened to be an advocate of the technology and believed bitcoins would someday be of value, whereas the other party clearly didn’t. The offer was accepted and a pizza was sent for a total cost of $44. Fast forward to today and those 10,000 bitcoins would be worth close to $200 million.
Everyone nowadays is searching for that next ‘Bitcoin’. I can smell the greed in the air as 5,000% gains become the new norm. Gains will be had and speculators will come and go, leaving behind muddied waters and bitter emotions – an inevitable derivative of any liquid market. The larger underlying opportunity, unequivocally, is in utilizing the technology. The time to invest in information is when there is none available.