Although Ethereum is mainly associated with money, the platform is much more than that – in addition to having its own currency, Ether, we can think of it as possessing elements of a bank account, an email address, and a Social Security number.
How Does it Work?
- The blockchain platform uses private key cryptography.
- Transactions are registered in a sequence of “blocks” of data and are completed without any traditional institutions or intermediaries. This is possible because no one owns Ethereum – the platform is far closer to a democracy than a private corporation.
Blockchain is the Future
Some claim that the real promise of these new technologies lies in replacing much of what we now think of as the Internet – by turning the online sphere into a more decentralized system.
The Structure of the Internet
- InternetOne (developed in the 1970s and 1980s) – was founded on open protocols maintained by academic researchers and international bodies, owned by no one. They can be used by anyone, free of charge. Examples include:
- Email (based on open protocols POP, SMTP, IMAP)
- Websites (HTTP)
- GPS: initially developed by the United States military and now available in the public domain
- InternetTwo (developed in the 2000s) – because inventors of the open sector failed to create a secure open standard that established human identity on the network, questions of identity, community, and payment mechanisms were left to the private sector. Examples include:
InternetTwo Social Implications
Although no single corporation owned the protocols that defined GPS or the open web, Facebook, one private company, owns the data that defines 2 billion people today. Other dangers include:
- Hate speech
- Misinformation campaigns designed to feed our biases
- Hurtful online advertising
- Russian bots destroying the democratic system with fake news on Facebook
How to Fix the Web?
- Although restoring the architecture of InternetOne is not possible, the solution to fix the online sphere includes its elements – open-source technology standards.
- Blockchain evangelists believe that advances in software, cryptography, and distributed systems will be able to solve today’s digital problems.
- They even claim to offer an alternative to the model of capitalism that has driven wealth inequality.
The Rise of Bitcoin
- The closed-protocol era was first challenged in 2008 when Satoshi Nakamoto designed Bitcoin. The key features include:
- A secure database with no authority controlling and verifying the authenticity of the data.
- The work of maintaining that distributed ledger is itself rewarded with Bitcoin payments.
- Although Bitcoin is a largely unstable payment mechanism, the ideas that define the platform might prove revolutionary in challenging the hegemony of giants like Facebook.
How Can Blockchain Platforms Challenge Tech Giants?
- It can be done through the distributed ledger and token economy.
- Once the platform takes off, speculators put a monetary price on tokens and attract more interest in the protocol by inflating its value – this, in turn, attracts even more developers and customers.
- This creates a more competitive and equitable marketplace, as the economic value is distributed across a much wider group.
Possible Results of Adopting Blockchain Platforms as a Fundamental Part of Our Digital Infrastructure
- News platforms would be less vulnerable to manipulation.
- Identity theft would be less common.
- Additional security would come from the decentralized nature of the new identity protocols.
- The web would not be dominated by a few information-age giants.