The creation of Bitcoin in itself was a really big thing. It brought the possibility of sending money instantly, economically and directly to users. Bitcoin no doubt blew our mind away, but what’s more mind boggling is the technology that Bitcoin runs on, Blockchain. It offers a plethora of exciting possibilities that the world is yet to see, we believe it might change the picture of internet and the world in general altogether.
- The first Blockchain was Bitcoin.
- It’s a decentralized ledger spread all over internet.
- An audit trail makes it possible to track changes done in Blockchain in an invertible way.
- Blockchain records all kind of transactions of value, not just financial transactions.
- There is no centralized authority, the trust is built into the Blockchain itself.
A Blockchain basically is a continuous growing list of records linked together. There are people responsible for relaying and validating transactions. These people are called miners and are awarded Cryptocurrency for their work. So instead of having the transactions stored on a single server at a bank, the transactions are stored on thousands of computers spread all over the world. The promise of a truly decentralized network brings some associations to the internet itself and the original idea behind it: decentralized and free for all users. In the recent years we have seen internet moving against a more closed system with paywalls and system for prioritizing certain traffic. As a geek, I have to say that this new way we are taking is much appreciated. In many ways we can say that the users are taking back control over the internet.
Why is the Blockchain called Internet 3.0?
There are some good definitions of different Internet milestones as we know it today. If we look at the bigger picture I think it makes sense to divide the internet evolution up in bulks like this:
Internet of ideas
This was the beginning; the use was mainly educational and research. Many people believed that this is the golden age, everything was new and exciting. At that time the commercial interest in the new technology was quite low, the internet was for the nerds and enthusiasts who wished to explore this new and exciting medium.
Internet of e-commerce
When someone figured out that you could sell goods and services on the internet I would say that we took a plunge into the new era of Internet. The e-commerce companies have seen more than two decades of extreme growth.
Internet of agreements
An apt name or not for the next/current era, but I do believe introduction of Blockchains has fixed some big issues the world of internet was facing. The need of safe and secure identity management and a way to trace transactions is high on demand. This wasn’t possible with big centralized players as the information was encrypted but with the control going de-centralized, I do believe a lot will change.
Everything started with Bitcoin
Bitcoin was the first Blockchain. The Bitcoin is actually many good ideas brought together to create a pure decentralized digital currency. Bitcoin does not have any central authority like a Bank. Instead, everything is built around trust in a decentralized digital ledger. The ledger is maintained by users that we call miners. These people are the caretakers in the system who keeps a track of everything and make sure that transactions reach a consensus. This reduces fraudulence.
Bitcoin is still the biggest digital currency with as much as 50% of the total market cap. In the second place, we find Ether which is built on Ethereum platform. There are however, many other digital currencies out there that compete over user and media attention.
While Bitcoin is a pure digital currency, the Ethereum platform is called ‘the world computer’. By leveraging on a technology called smart contracts, it is possible to support many other things that just pure coins that are used for payment.
While talking about Ethereum we have to mention the ICOs. These things are the digital way of doing something like an IPO. The ICOs are responsible for gathering somewhere around $3 billion in this year so far, that’s definitely huge.
There are a lot of other coins and tokens out there, a hundred, thousands of them. Some of them are pure coins with just one purpose, others are more like Ethereum with a lot of extra functionality. I believe we will see new crypto-currencies in the coming years. As always, we will keep an eye out for the changes happening. Do subscribe to our newsletter for regular updates on these crypto-currencies.
Also published on Medium.