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(Part 1/3) Exploring the Blockchain as developer (Dec 09 2017)
(Part 2/3) Diving into Smart Contracts (Dec 11 2017)
(Part 3/3) Blockledger implementations and real-world use cases (Dec 15 2017)

Part 1/3 - Exploring the Blockchain as developer

Today's article will focus on the initial experience of researching block ledger as a new developer.

Blockchain is used as a general term for this article to encompass cryptocurrency and block ledger technologies.

Preface

I'm currently in the process of exploring what areas of the blockchain are good points of entry. The purpose of this article is to check out what is publicly available at this point in time. I will try to highlight my findings and provide insight for those in a similar state of exploration. The question of how you can co-evolve with the blockchain will be an important one to consider for 2018.

As a developer who has taken the last two years off of corporate work, my professional network has shruken. So I'm using this space with the intention of reaching out to an audience of similarly interested developers/product managers and as the medium to learn from the community. I'm also excited about Steemit as a project and concept and look forward to contributing as a writer, hopefully giving more then I recieve.

Let's begin...

Let's begin by a saying this is an exciting period of time. It feels like the early days of the internet bubble, Web 1.0. I estimate there will be a bubble, a pop, consolidation and then domination.

During this period there will be much to learn. If you live in a major metropolitan area, you will observe the number of conversations around the topic increasing as the new technology is being implemented. A simple search of google trend indicates the growing interest in the arena.

[Figure 01 - Google Trends Search]

Eventually all this excitement will be translated by new companies and individuals trying to make an impact. Legacy buisnesses will transform and new paradigms will become the norm.

Definitions...

Let's establish some basic definitions, before we jump into implications and possible actions steps, to be covered in Part II and III of this series.

blockchain?

"Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network" - Wikipedia

cryptocurrency?

"A cryptocurrency (or cryptocurrency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets" Wikipedia

Proof of Work?

A proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements https://www.investopedia.com/terms/p/proof-work.asp

Proof of Stake?

Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more Bitcoin or altcoin owned by a miner, the more mining power he or she has. The first cryptocurrency to adopt the PoS method was Peercoin. https://www.investopedia.com/terms/p/proof-stake-pos.asp

What are the competing crypto ledgers?

If you are not technical, you will most likely come across the blockchain as a media story that describes in the insane 📈 price. At which point, if you are in U.S. you might do a little research or stumble upon a consumer-friendly exchange such as Coinbase. You'll quickly become familiar with these three coins and there prices. Each of these represents an evolution in the block ledger. For all intensive purpose, they are akin to the early dot-com companies.

Bitcoin (10,000+)
Ethereum (400+)
Litecoin (50+)

Who are the front-runners in the crypto ledger space?

In terms of value, Bitcoin has the most valued store. It will dominate the mass media story for the coming months and years. There are other coins, Ethereum and Litecoin, but they carry a smaller media footprint.

If we step back from, "Who are the front runners?" as a question, there is a more interesting question. It is nuanced...

What does each of the cryptocurrencies respond to, in terms of its predecessor and/or competition?

This question will provide us with a better approach to understanding this disruptive and fast-moving technology. It will also be valuable as you determine where you are best suited to contribute to the growth of block ledger technologies. Additionally, as with all news cycles, there will be noise, people and individuals looking to take advantage of the collective excitement. Developing a filter will be key in efficiently allocating your talent and getting the most impact on what you are able to contribute.

Additionally, if you are aware of history and human nature, it is not always the most well-designed or technically sound system that gets adopted by the masses. The history of Betamax vs VHS is a relatively recent example. Human culture and politics play a large part in how technology manifests itself. The details of the format do not always matter as much as the net effect on human group behavior. I'll keep that in mind during my writings, take a mental note yourself, it helps with objective observation. As things shake out, there will be a more humanly digestible amount of block ledger ecosystems.

1st generation blockchain (Idea to Working Proof of Concept)

The first generation responds to the notion of trust and decentralization.

First wave technologies covers the Idea to the implementation phase. Historians and documentaries will cover the birth of bitcoin and block ledger in this phase. It's figurehead, Satoshi Nakamoto an anonymous pseudonym will be created for igniting the phenomenon. He symbolically acts as an oracle or seer to the entire movement.

It is not a coincidence that the first wave of block ledger coincides with the growing mass adoption of the web. I don't think without the proliferation of the internet, blockchain would exist. Simply put the concept would not have an avenue of implementation.

"A system for electronic transactions without relying on trust" https://en.wikipedia.org/wiki/History_of_bitcoin#cite_note-Wired:RFB-12

1st Generation Challenges

Implementation and Adoption. These challenges were address by the proliferation of exchanges and the dedication of resources to mining bitcoin. The Bitcoin unit scarcity model, limited by the control release of coins and requirement that proof of work is accomplished prior to distribution, generated the intial extrinsic motiviators that created a new currency market. Exchanges, over the counter and illicit black markets emerge to assign value to the coins. At which point bitcoin becomes a tradeable asset.

This mining model will become less necessary moving forward as the scarcity model ends and we transition to fee less transaction models. I surmise that bitcoin will function similar to gold, hard to move, and limited in supply. Humans for some reason require this in a currency and the basis of there market dynamics.

Video references

Second wave blockchain (Contracts and Value Transfer)

The second generation is codification of Contracts and Currency

The idea of a digital ledger is expanded on. The sole intent of a ledger is to record information to review as a source of truth. It is an artifact of the trust process. If societies can digitize currencies, then we can digitize the value of assets and actions surrounding the the transfer of assets and value. Currently, an example of this would be escrow.

You rely on a third party to validate that both parties involved in a transaction have met all requirements agreed upon. A useful example is the the act of purchasing a home, an escrow is used to faciliate the exchange between parties. Under currently available possibilities, this is done through a third party business. As a consumer and seller, you both trust this party, because they are tied to our governance and political system.

The notion of repayment and a path for recourse is implicit once you sign the escrow contract. This allows for trust. As bitcoin gained a footing, developers and technologies saw the need to create an ecosystem to tie rules sets to the transfer of value in one seeminlgly seamless step. Early research was done to create platform and developer tools that would make it easier to build ledgers. As of this writing there they being built and enhanced today.

Vitalik Buterin will most likely go down in history as a leader during this particular phase. Ethereum implementation has been vital in the proliferation of the block ledger, enabling other companies to structure their business models on the ledger.

Ether has become the proxy for corporate shares, as emerging companies finance themselves through the creation of Ethereum contracts. The rules of corporate formation could become legacy protocols. Governments are currently contending with how to adapt. It will test the current political and taxation systems moving forward.

Terms such as ICO(Initial Coin Offering) will be more common. They are similiar to an IPO in function, but not in execution or regulation. During the second wave, we are seeing many entrepeuners use ICOs as there funding mechanism.

If we refer back to our escrow example, one idea would to build an escrow service on the block chain that would automate the process and hold the value of the transaction in the block ledger. You might decided to fund this venture with an ICO. You would use Ethereum as your ICO platform. You might use a service on top Ethereum to manage your ICO. A new vertical is being invented.

Be aware of this pattern as it is applied multiple verticals and it will transform industries. A brand might be developed to guide people through this process and provide ancillary services, while the main function is executed on the blockchain and established smart contract platforms.

2nd Generation Challenges

There a number of competing efforts with product roadmaps that address technical challenges with building a distributed ledger everyone can trust and use. They all will try to gain adoption and deal with trust and product perception. Currently, the biggest techinical challenge is overcoming the cost of the transaction while maintaining the distributed network.

Bitcoin's network cannot outperform the number of transactions that VISA or MasterCard can process.

It will be historic when the world runs more transactions on a distributed network. This will change culture and governance structures. We've seen this occur the music industry. I have a hunch, we'll see it with governance. Ultimately, what gives the government its exective power is the ability to mint and control the flow of money. It's still premature to speculate, but novel forms of organization will emerge as prior governance formats become more distributed.

As a developer, there is ample opportunity to codify processes and system into a block ledger. A more detail exploration of the platforms will follow. We will take a look at what is actionable, execute basic tutorials and ideate.

Reference

- https://www.bloomberg.com/news/articles/2017-12-04/cryptokitties-quickly-becomes-most-widely-used-ethereum-app

Third wave blockchain (Micro and Nano transactions and IOT)

The third generation responds to micro transactions and the internet of things It will overcome scalability and transaction capcity issue. It will factor in locality and proof of work will be embedded into the systems.

reference:
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Fourth wave Blockchain (Energy as Currency)

Speculative

Energy as a unit of currency, transfer. This is purely speculation...ideas to be clarified.

Part 1/3) Exploring the Blockchain as developer (Dec 09 2017)

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