Monday, 1 February, 2016
Sharing economy for real!
The Internet has clearly changed our lives and the way we do business, all this in just two decades. And, this is just the beginning, the real network effect lies ahead of us and will happen once “node-to-node” sharing are fully implemented.
Communication on the Internet of today still works much like an old telecom network. A user device, “node”, looks-up the address of another node and initiates a dialogue or transaction. This is a “one-to-one” or “one-to-many” communication. In some applications, mainly file sharing and P2P, a “many–toone” communication is established. A communication that often lacks authorization, ownership and authentication and therefore needs a centralized, intermediate party. But what if there was a way of securing authorization, ownership and authentication in a truly peering and “many-to-many” communication?
First, lets look at “the network effect”, or “the power of many”;
Let’s say we have a very small network of only 10 nodes, adding one more node would increase the node base by 10 percent. But adding just this single node will increase the amount of possible communication by 1.000 percent! And this “the-power-of-many” effect is exponential, so imagine adding millions of new nodes to a node network of billions of nodes!
Sharing distributed, ledger technologies like “Linux Open Ledger” or “Blockchain” (“altchain” ) creates exactly these network effects. The altchain technologies make authorization, ownership and authentication embedded into the network DNA by sharing and distributing identity data on all data levels between services and smart devices. The total transparency of identity across the network will enable reinvention of the way value and risk are shared between counterparties. This will undoubtedly create new disruptive business models and offer an entirely different way of engaging in commerce.
With technologies like Blockchain, two people can, for the first time, exchange a piece of digital property without any prior relationship, and in a secure way, over the Internet! Blockchain is a permission-less, distributed database network, timestamping the hash of batches of recent valid transactions into "blocks", whereby proving data integrity. One of many advantages with the Blockchain architecture is the ability for a significant number of nodes to converge through consensus on the most up-to-date version of a large dataset by creating a “voting” like situation for data authorization, ownership and authentication.
First generation of resource sharing companies like Uber and Airbnb will become obsolete when distributed Blockchain applications appear.
Here’s an example: Using Blockchain, all taxi requests will be posted on an open exchange and presented with criteria including price but also things like weather, used that cab before and ratings from other customers. All of it is done on a distributed Blockchain system, so no centralized taxi company nor online service needs to manage the orders.
With Blockchain a distributed data driven and precise recommendation process will produce real useful authentication on node level.
One of the first examples of an authentication service based on Blockchain was created by Manuel Araoz, a 25-year-old developer in Argentina, and is called “Proof of Existence”. The site allows you to upload a file to certify that you had custody of it at a given time. Neither its contents nor your own personal information are ever revealed. The thousands of computers on that network have collectively verified your file.
Another example is the Swedish company Voddler who already in 2007 developed “Vnet” an altchain distributed ledger technology. Voddler currently use this technology for controlling streaming video applications but Vnet, like any Blockchain technology, is highly versatile.
In the Blockchain world the Internet finally becomes smarter with all connected devices turning into active nodes that are shared and controlled by open distributed chains. With Blockchain, control is decentralized all the way to node level taking advantage of the network effect (the power of many) in order to secure authorization, ownership and authentication. The power and opportunities emerging from this will be epic!
You buy a fridge, a car, a house, a smartphone, a wearable, a whatever. All the things you buy have clear serial number identifications as well as chips inside to enable them to transact wirelessly over the web. Upon purchase, your device is recorded as being yours using your digital identity token (probably a biometric or something similar). The recording of that transaction takes place on the Blockchain. Now, you have multiple devices communicating on your behalf. Your fridge is ordering groceries from the supermarket, your car auto-refuels as it self-drives the highways, your house reorders all the things needed for the robot vacuum and other cleansing devices it uses, and so on.
The shared ledger technologies like Blockchain enables the next generation network economy through authorization, ownership, authentication and decentralization. Around the corner are massive development and disruptive innovation within areas like payments, voting, networking, Internet-of-things, trading, music, video, resource sharing, etc.
This is how the sharing economy will materialize!