Blockchain is boring now, which means it’s about to become more useful
New eras of technology always bring in a variety of new words. Anyone old enough to remember the nineties may have “defragmented” their PC to make it run faster. If the device stopped working, you would “reboot it”. Which basically meant turning the thing off and then back on. In written correspondence, you would write “E-mail”, instead of e-mail. In the 2020s, we are being pushed into the belief that a new era of our digital lives is here: Web3.
And so, with this decentralized version of the internet, there is a new lexicon to grasp.
There is no shortage of confusing terms. If there is one that is more important to understand than the rest, it is the blockchain. Of course you’ve heard of it, but do you understand it? Of our insights community in the UK and US, 71 per cent say they are unable to explain what it is.
The most famous of these decentralized databases was created in 2009 to store Bitcoin information, manage transactions and keep track of who owns what. Boring old blockchain has been overshadowed as a buzzword lately as the terminology has expanded to include things like “dApps”, “and” DeFi (more on which later). But as blockchain becomes less sexy, it becomes more useful.
Here’s why.
On the merger
The biggest criticism of blockchain has been the technology’s disastrous environmental impact. It is estimated that the host of Ethereum, another digital currency, used about the same amount of electricity as Holland each year. But last month, developers completed a massive eight-year overhaul, which was branded as “the merger”.
The Ethereum blockchain now verifies transactions in a way that is less likely to melt the planet, with the non-profit associated with it announcing that the blockchain would now be 99 percent more energy efficient (as multiple miners would not need to compete simultaneously to operate the blockchain). Instead, one operator will be chosen at random to do the work based on how many chips they have bet. It also means that those who make a living mining the currency using large hardware were suddenly unemployed.
Fix internet
The mythology of Web3 is about turning away from the tyranny of organizations that are centralized and run by a small group of people. There are holes in this argument. More specifically, the Internet is already decentralized – it is a global network of servers that connect together and through which people can absorb information, communicate, work, and so on. But some blockchain innovators see today’s internet as a vile perversion of what it should be.
Tron is a start-up whose central mission is to “heal the internet”. It plans to do this by making the features of blockchain technology more accessible and easy to use. The idea is to remove the handful of digital giants – Google, Amazon, Facebook – that monopolize our attention and get rich using your data. Tron’s open source platform offers a new infrastructure where anyone will be able to build the next internet.
A cornerstone of this is decentralized apps (dApps). These perform similar functions to the conventional ones found on your iPhone. But dApps are stored on the blockchain rather than on centralized servers controlled by a company. Why is this better? Supporters believe that this improves users’ privacy, can protect against censorship and allows these digital products to develop organically as they are developed by the crowd.
There is a principle behind blockchain that transcends the technology itself. On the face of it, a public database that stores irrefutable information doesn’t have as much appeal as, say, a VR device that can send you into the metaverse. But it may turn out to be the invention that surpasses – and knocks out – all others in its importance.
