Explaining blockchain to my mother
August 29, 2017
In 1995, Newsweek editorialist Clifford Stoll wrote about the Internet, this distant and overrated technology that would never challenge the business models of the time. Today we're facing similar discussions with the blockchain, a topic widely unknown and/or misunderstood despite its potentially game-changing impact on our future.
Sweet dreams are made of this
Explaining blockchain isn't the easiest task, especially when it's your mother who's asking. But at Valtech we like a good challenge, so here's my humble effort to break it down in terms of everyone – and how their mothers/fathers can understand.
When the Internet took form, things got messy, as they often do in unnavigated territories. Some companies like Google or Facebook were among the first to connect people in an unprecedented way and they got huge over it, shaping a centralized Internet where value comes from users and goes all the way up to very wealthy shareholders.
This is pretty much what we know today, a few superpower companies that reign over our digital lives for better or worse.
The power of many
Now what if we could challenge this bottom-up model with a new decentralized paradigm, where value, instead of going to a happy few, would be redistributed within the network? That’s what blockchain is all about: the power of many.
Autonomous networks capable of just about everything while guaranteeing protocol security. You, me and millions of users connected to one another, each constituting a block with its own role to play in strengthening the chain. You can offer your computing capacity to help secure and manage exchanges, and you get rewarded for it accordingly. How about that, mother?
So what would people exchange in these networks, you might ask? Well at this point our imagination is the only limit. Many projects are born everyday with different propositions. You know the most famous one, of course, the almighty Bitcoin. It was the first massive blockchain project, simply allowing people on its network to securely trade an encrypted currency, instantaneously, with no intermediate or fee whatsoever. Instead of fiat currencies, which can be influenced by world events, corruption or other forms of manipulation, Bitcoins are issued and managed without any central authority whatsoever. You get to be your own bank.
A new value ecosystem
Blockchains projects have evolved a lot and it’s hard to think of an idea that’s not already being developed by a startup.
IOTA, for instance, is a project that aims at connecting objects to the chain, such as smart fridges, smarts cars, etc. Picture yourself shopping for groceries. As you pick a gallon of milk, it declares itself to your cart. When you’re done shopping, your cart tells your wallet what you owe, and you can just walk out of the store without taking out your credit card – and to make things secure that transaction was controlled by millions of other blocks.
Golem is another fascinating project that wants to allocate computing power to whoever might need it. Say you’re editing your summer vacation movies, all in HD. Rendering it would take a while if you don’t have a powerful computer, up to days. The Golem network would divide the task among blocks of the chain and render it for you in a couple minutes, if not seconds!
Sia uses the blockchain to encrypt and store your files, like cloud services do now. Your data is spread across the chain and no company has control over it. Because it’s not centralized, it’s also a lot more secure since hacking it would mean hacking the entire blockchain. Storing 1TB on Sia would cost you the equivalent of $2 a month, which is 10 to 20 times less that current commercial offers.
At this point I’m not sure if my mother followed me all the way, but she seems to get the idea. Blockchain is a new paradigm revolving around decentralization and value redistribution. Don’t worry, I would say to reassure her, it’s not quite ready yet and it won’t be for a few years, but when it is, oh boy, it might just change everything.
**This blog was inspired by real-life events, as the author wrote this blog after a conversation he had with his mother. This advice can be transferable to anyone, regardless of age/gender.