Post By Simon Montford on Sept 18, 2017
Once upon a time there was a substance called ether, also known as quintessence, that delighted and baffled medieval scientists for centuries. They postulated that it was a medium used by light to travel through the vacuum of space. It was also thought to be responsible for all kinds of other complex scientific phenomena. At the end of the 19th century, the scientific community collectively disavowed the notion, and concluded that it never existed. Ironic then that ether should, well, disappear into the ether.
A century later it has rematerialised as a cryptocurrency like no other, because instead of being just a store of value like bitcoin, it can be converted into "gas" and take the form of a digital fuel that facilitates interactions across a global distributed blockchain ledger called Ethereum. Unlike scientists of yore, today it is innovators who are delighted and the establishment that is baffled.
Founded by Vitalik Buterin in 2015, Ethereum wasn't the first blockchain platform to spawn a cryptocurrency. In 2009 bitcoin, the first of its kind, was gifted anonymously to the world by an unknown programmer, or group of programmers, using the pseudonym Satoshi Nakamoto.
Ether, bitcoin and other crypto-currencies aren't state-controlled like good ol’ fashioned dollars, meaning the platforms they run on have the potential to turn almost every industry on its head.
Furthermore Blockchain, the underlying technology that makes crypto-currency possible, is being used to construct an entirely new decentralised world wide web known as "Web 3.0". Think of blockchain and Ethereum as the Internet and world wide web, and Dapps (Distributed Applications) as web browsers, websites, and smartphone apps. This new paradigm threatens to totally disrupt the banking industry and break up the GAFAM (Google, Amazon, Facebook, Apple, Microsoft) oligopoly. Say hello to Bitcoin, Ether, Mist, and Steemit. Say goodbye to Dollars, Chrome, Facebook, App Store, and Play!
It is important to remember that crypto-currency is only the first of many killer Dapps capable of running on blockchain technology. There are already hundreds of Dapps in existence, and probably thousands in the process of being built. They will collectively be responsible for the transformation or total destruction of a significant number of multi-billion dollar industries. Examples include banking, cloud hosting, online advertising, even government; removing the concentration of power from the centre and spreading it more evenly across the ecosystem.
It is true that many people are funding and building Dapps to make a quick buck, but I suspect that the appetite for blockchain is also ideological. You see, most of the data that flows across today's Internet is stored and controlled by a few hugely powerful corporations that allegedly work hand-in-glove with government agencies. One could argue, therefore, that this is not only inefficient, but also unethical, because it threatens the privacy and security of everyone who uses it. Another problem with the status quo is that much of our personal data is stored on a comparatively small number of server farms. These vast centralised silos act like honey pots for hackers, and they also increase the likelihood of exploitation by third parties (with or without our permission), and unsolicited access by state controlled entities.
The blockchain takes a very different approach to the way data is stored. It divides it into tiny fragments that are encrypted and stored across a widely distributed network of nodes giving only the owner control over how it is shared, viewed, and utilised. Good news for the average Internet user, but for the banking system, corporate oligopolies, government surveillance programmes, cloud hosting providers, and hackers - not so much...
Read More: ICOs are funding the creation of a new decentralised web (Part II)
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