Lately, there has been lots of conversation regarding blockchain, crypto currencies and how practical they are. What kind of impact will they have on our society if any? And, more importantly, are they the real deal?
Indeed Bitcoin (and crypto currency) seems to just be a speculative volatile financial asset, but pay attention that its value is actually backed by something tangible; the world’s biggest computing power.
Bitcoin network represents the equivalent of 10,000 times the computing power of the top 500 companies combined. Letting you imagine what’s the value of that and compare with the current Bitcoin market cap of $170bn.
Despite much of the attention being garnered towards Bitcoin, the most interesting part of all this is the underlying technology behind it; the blockchain.
It is this (blockchain) that many of us have been beating ourselves to understand yet in essence, when considered alone, it is nothing more than a new system of records or database that’s so well conceived for immutability and distribution.
A case in point is when IBM and Twiga say they are building a blockchain-based xyz, that’s what they are referring to. For the most techy here, a new standard for the Digital Battlefield from the good old SQL.
This doesn’t real make a dent in the world, or does it?
Crypto currency + blockchain represent something much much bigger. The utopia of an open, leveled playing field that the Internet was supposed to be, before the platform economy led to the dominance of some corporates with their services that are so indispensible to us that they started shaping how we think and act.
No need to share with you here the list of the top 10 most valued companies, but something important to know is that, for example, YouTube distributes only 10% of it’s revenue to the video creators.
For this scenario, I will use a character named Adam. Why Adam? Maybe cause many are looking at Blockchain as a new form of Genesis, I’m assuming Adam is a football fan, so I’ll use that to illustrate how.
Let us say he wants to start a football team. In addition to his reputation, he will need to have a lot of money after begging investors and collateralising his assets.
But now imagine with his reputation, he announced that he wanted to create a football team and asked people to back him up to $1 million by pre-purchasing tickets to that team’s game.
Call each ticket an *AdamCoin*. And everyone who gave $10 got one. Now Adam starts recruiting players and offers to pay them in AdamCoins (tickets). He rents a stadium and offers to pay it in AdamCoins and the stadium only accepts AdamCoins for Adam Football club.
He signs an agreement with broadcaster but tells the a broadcaster that he will need to pay in AdamCoins.
Now what happens is that Adam has set up an ecosystem within which all stakeholders have a sense of belonging, are able to transact and value, the AdamCoin and where this value can be exchanged into traditional money (broadcaster needs to buy them from the stadium or the initial backers. Other people who want to watch the game will also have to buy them from the broadcaster, etc...)
Now, Adam has created a Token currency that’s backed by something valuable, watching a football game.
There is a beautiful thing about this; everyone in this ecosystem has interest in having the value of the AdamCoin go up. The football player, the stadium, the backer, broadcaster and considering the value backing is to watch a game, everyone will do their best for that game to be worth it.
Now the Blockchain, allows all the above to happen:
1. Everyone trusts that their ticket, the AdamCoin, will not be tempered with (even by Adam) or disappear due to hacking and the likes.
2. The cost to enable this whole digital platform connect to the ecosystem is very small because Blockchain standardises exchange of data. And the IT infrastructure can also be paid in AdamCoins by the way.
3. Everyone in the ecosystem can innovate on the digital platform independently from Adam (ex: the broadcaster sets up an application for advertisers to bid for advertisement slot real time with AdamCoins. Anyone can open a tube app on the AdamCoin blockchain focused on the club news and get paid per view in AdamCoins.
Now this is a utopian view of where all this crypto+Blockchain can take us and by looking at the dimension it has been taking while still at Day 1, the vision is only getting more and more credible. As for me, I’m yet to fully become a believer.
In the meantime, sending a 1/100 of a Bitcoin from here to there allows to explore the different features that keep coming up into versions of e-wallets.
I recently discovered the multisign wallet where different people need to eSign for a transaction to happen. Keeping some Bitcoins incentivises me to continue learning about all this.
The writer is the CEO at RwandaOnline Platform Ltd and Chairman, ICT Chamber.
The views expressed in this article are of the author.