Blockchain The Evolution of the Internet, IoT and Circular Economy Part 2

Blockchain The Evolution of the Internet, IoT and Circular Economy Part 2

Blockchain The Evolution of the Internet, IoT and Circular Economy Part 2

With the advent of the so-called blockchain revolution, it is important to contextualise the permanent shifts and challenges that the Internet (and consequently the world) will be facing in a near future. Blockchain comes profoundly mixed with the Internet of Everything, and these novel technologies impact and shape new models of economics such as the circular economy and the future of finance.

In the second part of this series of articles, I will reflect on how these technologies are impacting finance.

The software is eating the economy

If all this process on one end seems like as if software was eating the economy, as Marc Andreesen put it, it brought the replacement of entire sectors of the economy, it reinvented the notion of work, and it created a fragmented tech infrastructure and a schizophrenic new society, that many struggle to understand, with the emergence of tech mediating platforms and tech cloud driven fragmented organisations for identity, for business referrals and affiliates, side by side with spammers and the destruction of value for creators and producers of content.

It brought as well a paradoxical digitalisation of human old tribal / community operations based in peer to peer processes such as the sharing economy, which, paradoxically, was firstly powered by major Silicon Valley VCs and centralised tech players. These companies fight now to “eat” the global major chunk of the global economy and control global data and operations. Software ate already the world, paraphrasing the words of Marc Andreessen, the influential thought leader, who is the cofounder and general partner of the venture capital firm Andreessen Horowitz.

Software is still eating the world, Marc Andreessen is a cofounder and general partner of the venture capital firm Andreessen Horowitz

Software is still eating the world, Marc Andreessen is a cofounder and general partner of the venture capital firm Andreessen Horowitz

Blockchain Technology

Bitcoin the Proof of Concept for digitalised decentralized ledgers and cutting middle-men.

Bitcoin emerged as a solution for a libertarian society and a global system that is now possible due to digitalisation of money. Bitcoin created a digging algorithm process that replaces gold and can be managed by a digital ledger between computers – this is called the blockchain.

The emergence of eCommerce on the Internet originated the creation of new digital money. Until now value transaction rely almost exclusively on financial institutions serve as trusted third parties to process electronic payments. Even though the financial system tried to adapt very slowly to the innovative tech revolution around it, working reasonably well for most transactions it still struggles to adapt to the UX, user experience. One of the main reasons for this is due  to its inherent weaknesses of its trust based model not yet totally adapted to the innovative digital economy. Completely non-reversible transactions are not really possible, and many middle men create a layer of costs and complexity for small players.

With the advent of the growing  Bitcoin revolution,  which brought with it all its tribes and cyber-punk ideas and issues, irreversible transactions were finally possible due to a digital ledger between computers that have purchased bitcoin and that transfer it from P2P – the blockchain tech. Blockchain technology  is now universally seen as the best solution to the global tech and infrastructure issues of our current days. Although the technology in itself it is nothing necessarily new, it brought with a simplification system that can offer the possibility of  creating a digital ledger grid that can coordinate the ongoing evolution of the internet in parallel with the IoT / IOE advances.

Bitcoin: A Peer-to-Peer Electronic Cash System, initial paper

Bitcoin: A Peer-to-Peer Electronic Cash System, initial paper
Satoshi Nakamoto

Contextualising Blockchain

Blockchain-related interests and capacities are opening the closed technological infrastructure, particularly the financial and the investment industry, to this disruptive tech that has reached more than a critical mass. Major organisations and banks worldwide are using or working in blockchain driven solutions, and the technology has shown itself to be capable of creating a global discussion and set of solutions that promise to operate real change.

So to make things clear one needs to define in detail what is blockchain. Blockchain is a technological ledger database that maintains a continuous identity base data of a growing set of info records. It is a distributed technology in nature, meaning that (contrary to the present global technology system) there is no master centralised computer / or set of computers holding the entire data infrastructure chain. Rather, with blockchain the participating nodes have a smart transaction contract copy / register of the ledger chain that act as a meta-structure / accounting system, registering everything and creating relations without middle men tech or organisations. Blockchain ever-growing data records are only added to the global database chain.

Satoshi Nakamoto’s essay, the mythical creator of bitcoin in 2008, wanted in a simple way to let people directly exchange a new concept of electronic money. Nakamoto new model was not new, but his vision, was libertarin and utopian.

IoT and Blockchain

The increase in the number of Internet of Things (IoT) devices,  challenges global business leaders to make smarter use of IoT data infrastructure and to streamline operations not only within their own corporate boundaries but also across their business networks.

Business networks increasingly include suppliers, business partners, regulators, and other supporting agencies. How to integrate all this different parts? The challenge is not just a technical one; in many cases, the business objectives of all parties of a business network are not completely aligned.
The solution to this challenge comes in the form of a blockchain tech driven infrastructure. The extension of blockchain into cognitive IoT gives businesses different ways to think about business transactions. With a proper blockchain infrastructure business networks gain transparency and inherent ledger trust while reducing their costs by eliminating the middle-man from transactions.

Pairing blockchain with IoT is increasingly the next evolution of the internet as everything becomes digitalised and can extend these benefits into devices, to enable transactions, and smart contract validation to take place in real time and to further reduce costs due to error, time, and money.

Blockchain, Smart Contract, and the Internet-of-Things by Tori Adams

Blockchain, Smart Contract, and the Internet-of-Things by Tori Adams

Blockchain Industry areas

Blockchain is emerging as a global technology solution. Presently there are plenty of business use cases for transactions that are verified and organized by a blockchain decentralized platform that requires no central supervision, while still remaining resistant to fraud.

Some of the ways companies can harness the power of the tech digital ledger blockchain solution are by providing services int he following fields:
1. Personal Identity;
2. Finance, trading, and Banking;
3. Payments and money transfers;
4. Cybersecurity and global / local security platforms;
5. Education, Academic records, and academia identity and track record;<
6. Civic rights and Voting;
7. Retail, Car leasing, and general digital sales;
8. Forecasting, data visualisation;
9. Entertainment and music;
10. Share economy and Ride sharing;
11. Property and Real estate;
12. Insurance;
13. Healthcare;
14. Supply chain management;
15. Cloud storage;
16. Energy management;
17. Sports management;
18. Gift cards and loyalty programs;
19. Government and public benefits.

Will Blockchain be the Future of Finance?

Blockchain and the Banking Financial Industry

Global leaders and organisations all over the world, coming from different industries, have been researching, and starting to take Blockchain into serious consideration. Some have even started the process of migrating their services to blockchain technology.

On the other hand various blockchain tech-driven solutions are emerging that are drifting away from the original Bitcoin closed infrastructure and creating more robust solutions that better serve the various organisations, such as financial / banking communities. Some examples of blockchains working specifically with the financial industry are BigchainDB, Ripple, and R3CEV Corda, SafeCash and HyperLedger.

Driven by organisations such as R3 in the case of the financial industry,these technological infrastructures are offering new solutions to the challenges brought by digitalisation happening in the world, and the advent of IoE, that create a circular economy and a sharing peer to peer broader digitalised economy.

The case of r3cev.com in particular, is the one with more financial clout, being a R3 a global sort of consortium led by former ICAP electronic broking CEO David Rutter. R3 is made up of financial industry veterans, technologists, new tech entrepreneurs and subject matter. This consortium leads a group of over 45 of the top financial companies in research and development of blockchain usage in the financial and banking industry.

Macarena Peña, Business Development manager of BBVA’s New Digital Businesses area, and responsible for seeking the opportunities related to blockchain tech has explained recently in one interview how the ledger decentralised smart contract based technology works and the challenges it poses for the financial and banking sector as a whole. Her view is a powerful way to synthetise the power this technology has unleash in the banking industry, which is still centralised even though coping with the major disruption brought by the new world of Fintech.

In her opinion, there are only two main elements and things preventing financial organisations and special banks from beginning to offer these new tech services: the sensibilities towards regulation and the real customer demand as these new technologies are still emerging. Macarena Peña words explain and contextualise Blockchain and offer a strong way to look at it in a serious and in a straight forward way:

“In the original white paper of Satoshi Nakamoto, Bitcoin is defined as the application that enables “pure exchange of electronic money between the parties”, while blockchain is the technical description that explains the operation of the back-end of the application’s database.Strictly speaking, the term blockchain refers to the unchanging ledger that contains the full history of all the transactions executed in the network with a timestamp. Any person at any time can access and check this ledger, knowing that the information it contains is updated and consistent with the other nodes in the network, despite the fact that it is a decentralized network.

Chris Skinner blockchain and financial organisations

Chris Skinner Blockchain in the centre of different financial organisations tech solutions

Blockchain The Evolution of the Internet, IoT and Circular Economy Part 1
Blockchain The Evolution of the Internet, IoT and Circular Economy Part 3
Blockchain The Evolution of the Internet, IoT and Circular Economy Part 4