Whether you are an investor, a programmer or an entrepreneur BitCoin will radically and directly change your life in the next couple of years.
School teachers, activists and artists might not be directly in the firing line but Bitcoin’s underlying technology, the blockchain, is going to affect us all. The questions are how and how fast.
This article answers your basic questions about the blockchain and tells you where to go for more in-depth information
What is this thing called Blockchain?
If you doubt the radical changes that technology has wrought on society in the last three decades, just watch the queue for wifi at the Guangzhou Airport. We are so addicted to the Internet it is the first thing we organise when we get to our accommodation on a weekend away, move house, or plan where we will spend the day working “out of the office”.
The Blockchain is the next layer of the network that already connects us and enables our communal activity.
The telecommunications network allowed us to speak to each other, leave messages and then, by 1964, send electronic signals and printed documents. The microchip allowed us to use personal productivity software to do things that had previously required volumes of pen and paper. The combination of the two allows us to maintain our diary, perform our banking, watch movies, take photographs and share all of that activity with loved ones, friends and colleagues over a hand held device. Most of us now see the smart phone and our connection to the network as an essential accessory in our daily life.
Now, that networked computer has been empowered by the addition of a public record of all the transactions we perform. That public record is called the blockchain and it provides an accurate, immutable history of relevant online activity that will change the nature of trust. That reliable and permanent record of all transactions will rapidly replace the public record, institutions and governance in ways that we can only begin to imagine. It will be applied to supply chain logistics, as well as all transactions where a chain of custody, provenance or proof of ownership is importance.
Think about it.
We currently keep our money in a bank because we trust the bank to keep it safe. As that money has become completely virtual, we connect to the bank simply to record our transactions so that we can check our balance and make spending decisions based on accurate, up-to-date information. Now that the network itself has an accurate, up-to-date record of all our transactions and our account balance, the role of the bank is significantly reduced.
And that is just the role of the BitCoin. Imagine the same technology applied to documents that record ownership. Every online photograph can be registered and every use of it tracked using the blockchain. Lab results, works of art, any object worth protecting can be protected by the blockchain. A complete chain of custody, provenance, or transaction history can be recorded automatically as an object moves through different hands.
This can be applied to the storage of personal health records, the maintenance history of a car, the tagging of electrical appliances, viewing of online files.
This transition will take some time, just as the smartcard has taken some time to replace cash. When we think about the transition from credit cards, through eftpos to smartcards and cashless transactions and then the current wave of cardless transactions we can see that these revolutions have long lead times and then very rapid implementations once the technology reaches a critical mass. Each wave of that transition had its own impact on the businesses involved and the impact over the last two decades has been remarkable.
We are now reaching the point where BitCoin has moved out of the experimental and speculative phase into mainstream investing and blockchain applications are being implemented in organisations worldwide and the technology is being built into mainstream operating systems and development environments.
What do you need to know?
RIght now the world of virtual currency is exploding. Initial coin offerings (ICOs) are disrupting the financial landscape and entrepreneurs are exploring a brave new world of distributed applications to facilitate business models that were considered fanciful half a decade ago.
The adventures of BitCoin have been well publicised – if not well explained – and most of us understand that something big is afoot, but we are not sure exactly what.
The good news is the basic technologies are now well established and understood and a second generation of books explaining it all has emerged. Luckily, these books are targeted at specific audiences: Entrepreneurs, corporate managers, programmers, academics and investors. There are quick-to-read books that cost little and explain things simply as well as in-depth books to help you to make strategic decisions or, at least, decide strategically where to focus your further investigations. The
This article introduces you to the cream of the crop. We have deliberately selected books available both physically and as ebooks. We have provided links to Amazon so that you can load them directly into your Kindle at a couple of clicks, but given you the details needed to shop around and get them in your preferred format, from your preferred provider as fast as possible.
Some people prefer to do their own research, others to get information packaged in a dense and digestible package, tailored to their needs. The introductory texts discussed here provide a quick introduction in such a manner, though the very short ones do not provide much more depth than a weekend session with Dr Google.
If you are after an introduction to Blockchain, rather than simply BitCoin, Alan T Norman’s Blockchain Explained is my value-for-money recommendation. You can buy the Kindle edition directly for $US3.14 by clicking here. It is too detailed for some readers, though. Shorter books include Brian Reel’s BlockChain: Starting Guide for Beginner’s and Artemis Caro’s BlockChain: The Beginner’s Guide
As you would expect, the three O’Reilly publications are more serious works at a more serious price. Each text has a specific audience:
Blockchain: Blueprint for a new economy is the theoretical high level text aimed at strategic thinkers, Mastering BitCoin is the technical text aimed at tech savvy readers interested in financial applications and Decentralised Applications is aimed directly at programmers in the distributed application space.