Blockchain: Blueprint for a New Economy takes you beyond the currency (“Blockchain 1.0”) and smart contracts (“Blockchain 2.0”) to demonstrate how the blockchain is in position to become the fifth disruptive computing paradigm after mainframes, PCs, the Internet, and mobile/social networking.
The economic, political, humanitarian, and legal system benefits of Bitcoin and blockchain technology start to make it clear that this is potentially an extremely disruptive technology that could have the capacity for reconfiguring all aspects of society and its operations.
For organization and convenience, the different kinds of existing and potential activities in the blockchain revolution are broken down into three categories: Blockchain 1.0, 2.0, and 3.0. Blockchain 1.0 is currency, the deployment of cryptocurrencies in applications related to cash, such as currency transfer, remittance, and digital payment systems.
Blockchain 2.0 is contracts, the entire slate of economic, market, and financial applications using the blockchain that are more extensive than simple cash transactions: stocks, bonds, futures, loans, mortgages, titles, smart property, and smart contracts. Blockchain 3.0 is blockchain applications beyond currency, finance, and markets—particularly in the areas of government, health, science, literacy, culture, and art.
The blockchain is the public ledger of all Bitcoin transactions that have ever been executed. It is constantly growing as miners add new blocks to it (every 10 minutes) to record the most recent transactions. The blocks are added to the blockchain in a linear, chronological order. Each full node (i.e., every computer connected to the Bitcoin network using a client that performs the task of validating and relaying transactions) has a copy of the blockchain, which is downloaded automatically when the miner joins the Bitcoin network.
The blockchain has complete information about addresses and balances from the genesis block (the very first transactions ever executed) to the most recently completed block. The blockchain as a public ledger means that it is easy to query any block explorer for transactions associated with a particular Bitcoin address—for example, you can look up your own wallet address to see the transaction in which you received your first Bitcoin.
The blockchain is seen as the main technological innovation of Bitcoin because it stands as a “trustless” proof mechanism of all the transactions on the network. Users can trust the system of the public ledger stored worldwide on many different decentralized nodes maintained by “miner-accountants,” as opposed to having to establish and maintain trust with the transaction counterparty (another person) or a thirdparty intermediary (like a bank).
The blockchain as the architecture for a new system of decentralized trustless transactions is the key innovation. The blockchain allows the disintermediation and decentralization of all transactions of any type between all parties on a global basis.
- Blockchain 1.0: Currency
- Blockchain 2.0: Contracts
- Blockchain 3.0: Justice Applications Beyond Currency, Economics, and Markets
- Blockchain 3.0: Efficiency and Coordination Applications Beyond Currency, Economics, and Markets
- Advanced Concepts