I was recently sitting across the table from an associate who is trying to raise money for a couple of ventures she's involved with and as part of the conversation she said (with a sigh), "If it doesn't have the word blockchain or marijuana in the title of the pitch deck no one cares. Blockchain and recreational marijuana is all anyone wants to talk about".
If you aren't aware, Canada is planning to legalize recreational marijuana July 1st of this year (although the Senate is already saying maybe August), and the speculation and preparation is at a fevered pitch — personally I think when it finally does become legal the shakeout from a business perspective will turn everything into one big hot mess. Blockchain though is something very different — although admittedly I was struggling to understand its potential other than the platform that allowed for the crazy speculation that surrounds bitcoin and its cryptocurrency cousins.
By nature I am not a "tech guy" and rarely an early adopter, but it became apparent after talking to other people (and the recent deal between the social media platform beBee and a blockchain company called Profede) I needed to have a deeper understanding of what blockchain is, and more importantly what blockchain can do.
I wanted to ensure that if I missed any opportunity it wasn't because I was too lazy to become more knowledgeable.
I've done a fair bit of research so far and I'm just starting to glean the potential of blockchain, although I'm still blind to most of it — I definitely have come to understand why people say it's the next iteration of the Internet though. There will probably be a great many holes in my thinking about blockchain but I wanted to make an attempt at articulating what it is, and more importantly, what it can do. And I think it's best to start with the internet.
The thing about the internet as we know it today is everything can be copied... over, and over, and over again — and because of this the content of the internet has been "devalued" to a point it has no innate value, as well as virtually no level of trust associated with it. Is that beautiful photograph the original or the millionth copy?
Blockchain allows for both trust and value to be created on the internet.
Using very complicated math and a decentralized network of computers, a public ledger can be created that offers what I call "immutable uniqueness" — it allows for the creation of something that can not be copied and is verified (and policed) by a public, decentralized system of users. The need for a third party trust institution (such as a bank) to ensure a transaction is honest is no longer needed. This I understood right away, but frankly I didn't want to be caught up in the very big turf war that is brewing between the currently trust establishments and something so very disruptive.
What I didn't appreciate was blockchain also allows you to create "ecosystems" (economic systems, not ecological systems).
The bi-product of a system that offers "immutable uniqueness" is that it creates something which can be given "immutable value". And I suppose you might as well call it currency because it is inherently used as a reward for any effort in the ecosystem — bitcoin miners are rewarded for all their computer power, brains, and involvement with bitcoin. Blockchain enables ecosystems to be created which allow you, through your "efforts and involvement in that ecosystem" to create currency from the system that unto itself has value — much like a country's economy is reflected in the value of it's currency.
And one last concept that ties this all together — fiat currency.
Fiat currency is defined as a currency established as money by government regulation or law or an ecosystem, and is derived from the Latin fiat ("let it become", "it will become") — simply put, it's a currency that is worth what it is worth because we have decided to believe it is so. How else would you explain bitcoin having a value of $12,804 as I type this?
My biggest problem now is that I'm not imaginative enough to grasp all the ecosystems that blockchain will create — something that is now on my immediate to-do list.
PS: I may be looking at this all wrong, so any help in this regard would be appreciated.