In a previous post I talked about Ethereum, an emerging decentralized software platform where anyone can run applications that run with zero downtime, require zero infrastructure, and are immune to censorship. But who is actually using the platform? Does Ethereum really have potential to change the ways we run businesses? Why would someone chose this platform over the traditional centralized architecture of today’s web?
I recently returned from a trip to London where I had the pleasure of attending DevCon1. The conference was dense with talks from the core development team about the current state of the Ethereum platform and the road map ahead, as well as many different companies who are building the foundations of their business on Ethereum.
While we’re still in the early stages of the Ethereum platform, many of the companies in attendance have working prototypes using Ethereum as the foundation to their product. Slock.it gave a live demonstration of their lock using the live ethereum network, showing us how a deadbolt lock or power outlet can be managed from a smart contract. Both Gnosis and Augur presented on their prediction markets which both have functioning prototypes that you can use today. Free My Vunk spoke quite enthusiastically about their platform for fungible digital gaming assets. Imogen Heap even showed up on the last day to speak about her long standing dream to change the music and how she’s seeing that become a reality via Ujo Music an ethereum blockchain based platform on which she released one of her most recent songs.
You can watch videos of these talks on the Ethereum YouTube page.
One of the big take-aways that I took from the conference was that blockchains are going to drastically lower transaction costs in the same way that the internet lowered the cost of information exchange. This is the primary reason that there was also a lot of cautiously optimistic interest from banks and financial institutions present at the conference. Blockchains present a drastically cheaper and more secure alternative to the dated technology that currently backs most of the financial industry. This topic really deserves its own blog post because this reduction of transaction costs really extends far beyond that of just large institutions.
But can it work? Is there enough incentive on the part of businesses to move towards a decentralized system? A decentralized system is harder to control and most of today’s business models involve a large degree of power over its userbase. Or does that even matter? Will the new business models based on the new platform be leaner than their centralized competitors and be able to operate with significantly lower overhead forcing their less efficient old-internet counterparts to evolve or die.
It’s a power to the people sort of an idea. Instead of requiring big companies to act as our intermediaries, Ethereum opens up the possibility for people to interact directly with one another to get things done. Rent out your spare room without having to give away 3% to AirBnB. Insure that rental through a peer to peer insurance marketplace. Chat with your friends without having to decide between walled gardens.
History has shown us that the best technology doesn’t always win, but the magic bullet up Ethereum’s sleeve is that in the end, nobody really has to change any of their current behaviors. Ethereum applications are likely to look identical to the applications that you use today. They’ll look just like the web and native applications of today, but with an entirely new platform under the hood.
We’re only just entering the first phase of what could be the beginning of the next major stage of the web. If nothing else, it’s going to be interesting to see how all of this unfolds.
Have ways you’re using Ethereum yourself? Let us know in the comments below!