Do you think the internet has changed the world? You haven't seen a thing, yet. The technology behind the internet is evolving progressively into something bigger and extremely powerful. That's if we keep gaining grounds in developing the Blockchain Technology.
Before I dive deep into what Blockchain is, let me revise your memory about how the technology behind the internet works. The basic concept of internet technology works like this;
Supposing John in Kampala creates his information - his can be text, video, pictures or audio - using a computer and wants anyone in the world to read or interact with it. What does he have to do?
He will connect his computer to a network of computers around the world. And, as long as anyone in the world has a computer connected to the network s/he will interact with John's information. But, to enable the exchange of information across that network there two set of rules - call them protocols, that were invented;
- TCP/IP protocol; defines the rules how information should be exchanged between John and the world.
- HTTP protocol; defines how the information should be retrieved
Now, John can do Ninja tricks creating his information equally the world can do Kungfu tricks interacting with this information. Nobody really cares. BUT, what is the most important are the two rules or protocols that must be followed no matter what. There you have it. The internet you always use and even right now reading this.
But, there are two fundamental inventions that happened to make the internet possible;
- The computer that enabled us to create digital information that can be exchanged
- TCP/IP and HTTP protocols or the rules
Until recently, the internet technology had just delivered us to the Information Age. Yet humans are powered to build a lot of innovations on top of this technology. Which in the end makes the world become a better place. Just take a look at how big internet companies have become and the amount of power they have in the world.
However, this internet technology has failed to deliver us to the true Digital revolution. Just like Industrial and Agricultural Revolutions. Even though it has perfectly helped us fix the problem of how we create digital information, deliver and retrieve it.
The technology had failed to fix these problems especially;
- How to trust each other: There is absolutely no way I can truly trust the person on the other end unless some trusted party is in the picture. These third parties have created insane income inequality in the world. Imagine one man called Jeff Bezos, the founder of Amazon, is worth over $105 Billion - richer than over 25 African countries combined by GDP estimates.
- Exchange of valuable assets across the network: Every information on the internet is a copy of the original. If you take a picture with your phone and upload it to Facebook? Facebook will make a copy, and you keep the original. Likewise, when you send a message, the receiver will just read the copy of your original message. Which you have reminded with. Literally, the internet is one gigantic photocopying machine. There is no way to send original information and not keep a copy. This is a big problem. Which implies that there's absolutely no way I can send a valuable asset over the internet.
But, imagine you want to transfer ownership of valuable asset called music track? And, that transfer to happen, it must be on the internet. It is important that you give me the original and to never stay with the copy.
One other reason it has been difficult or impossible to achieve that is the existence of information tempering or hacking. Currently, the trusted parties - call them brokers, spend an unimaginable amount of money protecting the information online. And most times fail miserably.
Therefore, the current internet technology has not delivered us to digital revolution as people may think. That's why most people are still struggling to make the internet valuable to them. Apart from third parties who are minting billions from it.
This is where the exciting Blockchain technology comes in. So what is Blockchain?
Imagine thousands of interconnected computers holding blocks of data. These Blocks contain information about a valuable thing. Every few minutes, new blocks are added to the network. But, first, those blocks go through a powerful mathematical verification process. This is done by people called miners. Once added to the network, the block is time-stamped encrypted to never be changed - forever.
Those blocks stay forever on that network with a name called "Public Ledger". And finally, they are publically accessed. Blocks can be grouped. For example, the current trending currency blocks like Bitcoin and Ethereum Blockchain.
Blockchain technology creates a one-on-one trusted exchange of valuable information over a network with no trusted third party needed. Something the internet can't do, currently.
Assuming you want to sell your phone to John. But, to release your phone, you will need something valuable to enable you to make another transaction to get something else. John will give you money. You trust the money because you trust the Central Bank. And, you know someone else will trust it if you want to get something else.
What if there is a way you can back your transaction between you and John without involving the Central Bank? That's Blockchain.
The block transaction between you and John is created. It goes through verification procedure and gets accepted into the network a.k.a public ledger. Which implies this transaction is permanently saved on the network and will never be changed. John can then use that block transaction to purchase something else. Hence eliminating the Central Bank completely. As you can see, the banking industry is in trouble to be irrelevant.
But, it isn't only the Banking industry. It's almost everyone who earns his or her bread as a trusted third party between two people. They are poised to become irrelevant to the rise of this technology. Right now, the world is just piloting Blockchain with currencies like Bitcoin. If this becomes a success, then (Central) Banks will be replaced forever. Unless they re-invent themselves to ride with the tide.
Humans are now more advanced to need third-party policing in order to trust each other. What they need is more value from the internet. Something more than just copied information seated on (Google) servers.
The Blockchain is delivering us from information age, beyond Facebook and Google, into the valuable age. Where true value is exchanged to create meaningful human impact. The Blockchain is removing powers from the few people to the public. Or at least it seems like that.
Ronald Nyakahuma is the co-founder of visipo.com and gulapp.com