Vitalik Buterin, the founder of Ethereum, constantly explains how the blockchain of its foundation can revolutionize the business world. But first, what is a “blockchain”? It is a decentralized network of thousands of computers all over the world that makes it possible to operate different types of applications – currencies, systems to record digital assets, potentially many other things – in a completely secure way that does not require users to trust their counterparts. In fact, it is a participating computer that creates a safe system from potentially unsafe individual components.
What is the difference between Ethereum and the bitcoin?
Bitcoin is a blockchain designed specifically for currencies. This is its only function. Ethereum is completely appropriable. It makes it possible to create all kinds of applications: a currency, but also, for example, a registration system of domain names, security systems, and so on. In fact, many things have been created using the system. Why is the blockchain revolutionary? Blockchain technology allows transactions or projects to be created without waiting for the approval of any central authority. That makes a lot of things easier. Today, people tend to have confidence only in large organizations. With blockchain technology, one can create trustworthy applications with potentially a lot of money in play, and the person creating this application can be a developer, meaning there is no blockade or barrier preventing people from making money.
Which industries will be affected by blockchain technology?
Finance appears to be the first industry affected. It has long been highly regulated and centralized, but encrypted currency offers the possibility for completely new players to shake things up quickly. Many people that work in accounting have also been interested in this technology because it helps them learn how to manage data securely. This can help even more so with start-ups even though it will depend on its adoption by consumers. In music, one could invent an application in five years that will allow artists to manage their royalties themselves. The press could find templates for payment of items by each unit. In other words, blockchain technology is designed to make “smart contracts”. Buterin was asked if he though his blockchain was the most sophisticated and he replied with a resounding, “Yes.” He also said that “Bitcoin brings together a large community. But with more than 1,000 developers around the world, Ethereum is better suited for entrepreneurs.”
Are there other blockchains and are they competing?
There are many of them and they do not aim at the same things as Ethereum. BitShare tries to make high-frequency financial transactions. Ripple works on the transfer of money in peer to peer situations. There are others that are much smaller but work just as effectively. Shapeshift allows people to pay for Ethereum applications in bitcoins. It converts ethers (Ethereum’s currency) into bitcoins automatically. It is possible that various blockchains dominate some industries. Most seem to think it is a good idea that there are many Blockchain projects and a lot of competition: it is like different programming languages, this multiplies the possibilities of success. If success occurs, every effort will be made for the blockchains to work together.
When will this technology be widespread?
Bitcoin and Ethereum are almost ready, but Buterin seems to think it will take a while longer before this technology is truly developed to handle billions of users. Large organizations operating in a centralized fashion show some resistance, but they are also interested especially banks. All these centralized intermediaries have their own centralized intermediaries, which they do not like because it costs them a lot of money! Why isn’t Buterin not concerned about the social impact caused by the removal of intermediaries? “Doing without intermediaries is a good thing”, he says. Of course, worrying about job security still exists in today’s society. But it’s different with blockchains: with other technologies, it’s about margins, while with the blockchains, users automate things cohesively. Yes, jobs will be lost, but they are plenty of people who make a lot of money. In fact, Vitalik hopes that blockchains will help eliminate jobs that are too well paid.
Is Ethereum politically militant?
What most people like about Ethereum is that there is no specific point of view attached to the company. People from all walks of life are trying to improve things within the company. That said, it is a place that gives power to individuals and there are people who want this type of power to be centralized. For them, it’s not good. Would blockchains affect Facebook or the economy of “peer to peer”? People have long been looking at social networks that would be controlled by users. Blockchain technology provides crucial elements for this, such as identity management. It could, therefore, threaten Facebook. Projects should begin to be adopted in one or two years. As for “peer to peer” and the “sharing” community, they lead to monopolies that are difficult to break. But thanks to blockchain technology, it is possible to decentralize processes and likely projects will appear allowing everyone to bring their products and services online without intermediaries. This could also affect eBay or Amazon.
Is the blockchain really safe and does it respect privacy?
There are two issues with any online presence: privacy and the integrity of the system being used. Companies must provide some assurance that its business will continue to function. The blockchain is perfect because it cannot solve every little problem but it has the best chance of surviving. Any transaction on the blockchain is public, but it could also work with other encryption technologies to better itself. Does Blockchain end anonymity on the Internet? With blockchain and these encryption technologies, people are given control over what they want to reveal about their identity. They do not need to reveal it entirely in every message sent.