Can the blockchain solve some of our most pressing challenges?
As we continue our trudge forward into the 21st century, one thing has become apparent: progress is relentless. Individuals, entities, and entire industries not capable of innovation are quickly usurped and replaced by those that are — changing the face of many industries.
Since Bitcoin hit the scene in 2009, blockchain has lit up headlines around the world — in part, due to its spectacular growth over the past decade, but also due to the enormous number of use-cases the technology seems poised to revolutionize.
Nowadays, practically every industry is experimenting with incorporating blockchain into its workflows — ranging from agriculture, fashion, logistics, and with all of the world’s top ten corporations now exploring its potential.
Not since the Web itself has a technology promised broader and more fundamental revolution than blockchain technology. — Hyperledger
Innovators, investors, businessmen, and technologists are all looking for the next big blockchain break and the number of wildly ambitious ideas with blockchain at the core number in the thousands — during a time when public perception of the technology is beginning to gain momentum.
The incredible amount of speculation relating to the future of the technology contributes to the sustained hype and intermittent media frenzies surrounding blockchain and cryptocurrencies. However, what remains uncertain is just where this road might take us, should blockchain truly become the foundations of everything.
Everything, But Tokenized
Recently, John McAfee, in collaboration with exchange start-up Ethershift and blockchain-based art investment platform Maecenas, tokenized an original Picasso piece by splitting it into a fixed number of ERC20 tokens — each of which will represent fractional ownership of the piece.
Tokenization could represent the next big leap in efficiency for many markets. Currently, for example, investing in shares typically requires the involvement of an intermediary known as a stockbroker. However, with tokenized equity, investors can purchase digital shares in a company while retaining full control over their shares.
A prelude to this has already been seen with the recent initial coin offering (ICO) boom, which saw hundreds of start-ups raise capital through the sale of (mostly) utility tokens — which represent some internal functionality within the platform.
Recently, a wave of new projects has taken it a step further, allowing the purchase of collectible digital assets using cryptocurrencies as part of an initial asset offering (IAO). War Of Crypto was one of the first in this new genre of crypto crowd sales, allowing investors to purchase non-fungible ERC-1155 tokens that represent in-game characters with special features.
Through tokenization, investing is cheaper, faster, more secure and available every hour of the day. This opens up real-world assets and the world of cryptocurrencies to people who previously may not have been able to invest due to geographic or financial restrictions, and offers an alternative to traditional and largely outdated investment methods. — Jakob Drzazga, co-founder of asset tokenization firm
Other, more daring blockchain start-ups have already begun to experiment with security tokens, offering accredited investors licensed securities in exchange for investment. Aspen Reit, for example, launched one of the first security token offerings, allowing investors to purchase legally compliant Aspen Coins, which represent a fraction of a real estate investment trust and entitle holders to dividends on their shares.
Platforms such as Polymath and Securitize.io have already begun tackling the difficulties of moving traditional securities to the blockchain and are looking to set the standard practices for the blossoming industry. According to Polymath, there is a “trove of wealth that is untouched by Wall Street that can now be accessed.”
In 2018, we are already seeing the progressive tokenization of not just works of art and real-estate, but literally everything — at least, that’s what Mattereum hopes to achieve. Mattereum is a daring project that seeks to change the way we manage the legal rights to properties, objects, and information by allowing these rights to be tokenized and exchange between owners and introducing the concept of an ‘automatic custodian,’ which allows asset rights to be transferred automatically based terms defined within smart contracts.
Even national currencies are likely to be digitized, the precursors of which are already in common use — namely stablecoins such as Circle, TrueUSD and Tether. The value of these coins is pegged to a traditional financial instrument — in this case, the US dollar (USD) — in essence acting as a proxy for fiat. In time, it is likely that the proxy part of this equation will disappear, as true digital representations of national currencies are released and lead to a true, government-backed cryptocurrency.
In the future, even intangibles such as patents, copyrights, and brands can be recorded on the blockchain and tokenized — allowing investors from across the globe to share ownership of assets in ways that were simply not possible before. Cryptocurrencies might eventually become an entirely new asset class of their own.
A Currency that Unites Us
The question of why we don’t use a single global currency has probably crossed most minds, particularly when visiting a foreign country. It seems like an obvious goal that would benefit everybody, albeit for vastly different reasons.
We imagine a future where a single world currency gives stability and certainty to developing nations, whereas economically developed countries will break down the barrier to free trade while seeing increased foreign investment and tourism.
In this future, forex trading would be completely non-existent, as the value difference of the world currency between countries will likely be too minute to profit on. In its absence, forex reserves would be abolished.
Achieving a single world currency will not be straightforward. Few countries will be content with giving up the independent monetary policies that dictate how they regulate and distribute their national currency. Furthermore, vast differences in political and economic structures stand between us and a government-backed world currency.
Almost all independent countries choose to assert their nationality by having, to their own inconvenience and that of their neighbours, a peculiar currency of their own. — John Stuart Mill (Principles of Political Economy)
A variety of fiat world currencies have been proposed in the past, such as the Terra, a currency designed by Belgian economist Bernard Lietaer. Lietaer proposed that the value of each Terra unit would be tied to a basket of commonly traded commodities, such as gold, oil, cotton, and wheat. Although Terra wasn’t designed to be the single world currency, it was designed to be internationally valid, something many fiat currencies today still have not achieved.
Several prominent figures have projected that, in time, the world will unite under a single financial system, and that Bitcoin or some other blockchain-based currency will be set to the task. Jack Dorsey, CEO of Twitter, was recently quoted saying:
The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin.
Cryptocurrency, on the other hand, has the potential to fulfill many of the criteria required of a world currency: having a controlled supply, being non-inflationary, and being near instantaneous in its transfer. Because of this, cryptocurrencies currently stand out as the most likely candidate for utilization as a planetary currency.
Unlike fiat currency, cryptocurrencies generally operate without borders, allowing them to accessed and used in any country. Bitcoin, among other cryptocurrencies, can be sent between different nations to transfer value without the hefty transfer fees commonly associated with SEPA or Swift transfers.
Countries suffering from chronic inflation have already demonstrated their interest in cryptocurrencies, with Venezuela recently issuing its Petro cryptocurrency while the Marshall Islands plans to launch its own national cryptocurrency in the near future.
However, with the advent of cryptocurrencies, political will is no longer an obstacle. Instead, people are free to choose the currency they support and use. Because of this, government backing may not be required to see Bitcoin, or some future cryptocurrency, rise to the challenge of providing fair access to financial services and resources to virtually everybody.
Scientific Walls will be Toppled
Right now, the vast majority of scientific information is broadcast through a centralized publisher, such as one of the myriad scientific journals like Nature, the New Journal of Physics and PLOS One. This system, while effective for the pre-internet age where centralization enabled the most effective route to distribute knowledge, is now outdated.
Unfortunately, one of the only ways to achieve attribution and reputation within the scientific community is by publishing papers in high profile journals — many of which will only publish works from teams who are already accomplished. Making matters worse, obtaining institutional funding or government grants is often contingent on publishing high-impact research in a prestigious journal, something only well-established groups can be expected to boast.
In addition to this, the process of publishing in a high-impact article is painfully long, often taking several months, or even up to a year, for a piece to be published. According to the Nature editorial process, there are as many as eight hoops to jump through before publishing — several of which can take months to complete.
One of the longest delays to publishing is the peer-review process, which sees several experts in the field of work scrutinize a submission to ensure it meets their journal’s quality standards — helping the publisher identify areas requiring improvement or clarification (resulting in a back and force process until an article is approved).
A recent study by Kendall Powell paints a worrying picture:
At Nature, the median review time has grown from 85 days to just above 150 days over the past decade, according to Himmelstein’s analysis, and at PLoS ONE it has risen from 37 to 125 days over roughly the same period.
Of these publications, those with the highest impact factor (a measure of its importance) tend to suffer one the longest delays — with a median publishing time of 150 days. This process massively increases the amount of time taken for knowledge to spread, slowing the pace of innovation and, hence, the speed of the scientific process.
Recently, however, several teams have begun exploring the use of blockchain technology to improve the distribution and attribution of scientific knowledge. Boston-based ARTiFACTS, a scientific collaboration and attribution platform, is one such attempt — making the first moves towards a decentralized repository of scientific knowledge.
Artifacts allow researchers to distribute knowledge — whether complete or incomplete — and gain attribution for it — helping fellow scientists access data sets and avoid reduplication of efforts. It also allows its users to “record a permanent, valid, and immutable chain of records in real-time” while helping to combat the problem of poor reproducibility in academic research.
DEIP, on the other hand, is a decentralized research platform that is developing a new economic model for incentivizing scientific research. The platform recently entered its public beta, allowing academic teams to register their projects and receive funding through a token-based expertise system, which sees research being rewarded DEIP tokens upon receiving positive reviews from the scientific community.
The decentralization of scientific knowledge stands to become one of, if not the biggest, steps forward in human history. In time, scientific industries will be capable of moving as one decentralized but cohesive unit — eschewing the competitive mentality that threatens the very purpose of science: human advancement through shared understanding.
Intelligence will be Decentralized
Today, two of the most discussed potentially-disruptive technologies are blockchain and artificial intelligence. Simple artificial intelligence has recently become prevalent in modern society and powers a variety of experiences that you might not even recognize, including mobile personal assistants, social media matching engines, music discovery apps, and even targeted advertising platforms.
However, these types of artificial intelligence are limited in scope, capable of performing only a select few functions using limited types of data in the process. Furthermore, they are not what most would consider a true (general) artificial intelligence. The common conception of A.I. is actually known as an artificial general intelligence, or AGI — a machine capable of working on non-specific tasks, similar to how a human can.
The advent of an AGI, or even a more limited variant known as a narrow A.I., could yield drastic advances in practically any field they are applied to — having applications in a variety of potential areas, such as computer vision, natural language understanding, and data manipulation.
In the past, attempts at building an artificial intelligence have been primarily centralized efforts, usually involving government organizations and academic groups. As of yet, even a narrow A.I. remains yet to be developed, owing to a number of challenges — including insufficient computing power, lack of experienced developers, and a lack of standardized practices for its development.
Recently, several groups have begun exploring how blockchain technology can be used to solve some of the fundamental challenges of developing an A.I. SingularityNET was one of the first movers in the blockchain A.I. space. Launching its ICO in late 2017, SingularityNet became one of the fastest selling ICOs of all time — selling $36 million AGI tokens in just 60 seconds.
SingularityNet was built to democratize A.I. by allowing everybody, not just governments and enterprises, to use A.I. services — democratizing access to potentially the most significant tool we will ever develop. The SingularityNet platform allows independent developers to submit A.I. code to the decentralized repository and be rewarded for its use while connecting A.I. developers with business clients for the commission of custom A.I. solutions.
I believe this artificial intelligence is going to be our partner. If we misuse it, it will be a risk. If we use it right, it can be our partner. — Masayoshi Son, CEO of Softbank.
SingularityNet is not the only ones making moves in the blockchain A.I. space. DeepBrain Chain hopes to massively reduce the barrier for entry by using blockchain to distribute unused computing power to those who need it.
Typically, machine learning algorithms must be backed by extreme amounts of computing power to achieve a respectable learning speed. However, obtaining the necessary hardware to do so is typically an expensive endeavor, costing close to $400k for an entry-level machine, such as Nvidia’s DGX-2 deep learning supercomputer. DBC believes that by decentralizing A.I. compute power, it can reduce costs by up to 70 percent — making it more accessible to all.
The concept doesn’t just apply to A.I., as our own intelligence is similarly capable of being distributed over the blockchain. Humans may split tasks over a large number of minds using smart-contract technology, allowing potentially millions of individuals to contribute knowledge and allowing for previously unachievable levels of collaboration — whether parallel or asynchronous. This is exactly what Mentat, a blockchain-powered marketplace hopes to achieve.
Seeing this path, it is not difficult to imagine a future where tasks, however complex, can be fragmented and automatically distributed to the right kind of mind for solving — whether human or machine. In time, this system should yield creativity and efficiency that few corporations can even dream of.
As we move into subsequent decades, the pace of innovation is only likely to increase as more companies allocate an increasing portion of their revenue to research and development while utilizing distributed intelligence platforms to stay ahead in an increasingly competitive market.