It was the evening of July 19th this year. I’ve always been interested in cryptocurrencies and just before going to bed that evening, I decided to check out the “cryptogrinders” telegram group. That evening there was a lot of chatter about an expected breakout in Bitcoin price. If you’re familiar with reading stock charts, you’ll know that a breakout point is a point on the so-called line of resistance. Once a stock goes past the breakout point, cracking the line of resistance, the price is expected to increase rapidly.
I was curious to see what they were talking about myself, so I pulled up the Bitcoin live chart from CryptoCompare.com. And there, right before my eyes, Bitcoin broke through the line of resistance on the chart and proceeded to shoot up from $2282 to $2866 in less than ten minutes. That’s a price increase of more than $500!
As I watched in amazement, it dawned on me that I was beholding a paradigm shift in our monetary system. On top of that, this paradigm shift is being molded and shaped by the open source community!
To see the influence of the open source community, you only have to look at the growing popularity of the blockchain technology. If you don’t know already, blockchain is the underlying technology that Bitcoin is built on. Blockchain is an open, decentralized ledger that records transactions between two or more parties efficiently, in a verifiable and immutable way without the need for a central authority or centralized storage location.
Are you starting to feel the paradigm shift I’m talking about? If not, let me break it down for you. Hopefully, by the time you’re done reading this article you will have acquired an appreciation for the shift that is about to happen. In fact, it might already have occurred.
The traditional banking industry is in danger of becoming obsolete, unless they change and adapt to the onrushing wind of change…
The most obvious sector affected by the blockchain technology is the banking industry. Banks thrive on trust. Think of all the things you trust your bank to do. You trust them to keep your money safe. You trust that you can withdraw that money from an ATM or bank branch at any time. Finally, you trust that the bank has the people and infrastructure to carry out any necessary monetary transactions. If any of these conditions stop being true, you and the rest of the bank’s customers will go elsewhere.
Blockchain technology enables all these financial transaction (and more) to be taken to the next level of fluidity. Blockchain technology, and with it Bitcoin, was launched in 2008 when Satoshi Nakamoto (the pseudonym for the as-of-yet unidentified creator) published a white-paper called “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper described the use of a peer-to-peer network as a solution to the problem of double-spending, with transaction details added to the end of blockchains. He argued that he had solved the issue of double-spend for digital currency via a distributed database that combined cryptography, game theory, and computer science. This creation was a huge innovation, because it enabled one entity to confidently transact value directly with another entity without relying on a trusted third party (i.e. a bank) standing between them.
The traditional banking industry is in danger of becoming obsolete, unless they change and adapt to the onrushing wind of change being instigated by innovative open source minds.
Even the internet itself is not spared from these changes. Currently, there is movement to decentralize the Internet. Instead of having a centralized local hosting server, or so-called cloud hosting, you have a decentralized, per-2-per or distributed internet of information. Blockchain technology is one of the driving forces pushing us toward a decentralized internet. IPFS (InterPlanetary File System), MaidSafe, Namecoin, and BitMarkets (a P2P market with no trusted third parties), are currently some of the key players proactively working to make the decentralized internet a reality.
IPFS is a protocol designed to create a permanent and decentralized method of storing and sharing files, using a content-addressable, peer-to-peer hypermedia distribution protocol. It aims to create a completely decentralized, distributed web that has no requirements for a central authority in the entire chain. No ICANN, no central servers, no politics, no expensive certificate “authorities,” and no choke points. IPFS is designed to replace our current centralized internet protocol, HTTP.
MaidSafe, also called SAFE (Secure Access For Everyone) Network is made up of the unused hard drive space, processing power, and data connection of its users. Offering a higher level of security and privacy than the centralized internet, it puts users in control of their data, rather than trusting it to a centralized hosting company. Files uploaded to the network are broken into pieces, encrypted, and distributed across the network. This process is called self-encryption.
Namecoin is still in the experimental phase. It is an open-source technology which improves decentralization, security, censorship resistance, privacy, and speed of certain components of the internet infrastructure such as DNS and identities.
Bitmarkets is an open source protocol and free client for a decentralized marketplace which uses Bitcoin as its currency and Bitmessage as its transport protocol. Mutual security deposits between buyer and seller on individual transactions are used to ensure incentives are aligned for completing market transactions without the need for either reputation systems or third-party escrow agents (in other words, banks and lawyers are not needed).
Now can you feel the paradigm shift in motion? Do you understand the driving forces behind this shift? Yes, the primary driving force is technology, and the origin of all these disruptive technologies is the open source community! Open source technology is fundamentally reshaping how we interact with both physical and virtual worlds. With all these changes, don’t you think it’s time for you to reevaluate how you implement IT in your business?
What technology do you use for the day-to-day running of your business? Is it still boxed-in, expensive, proprietary technology? Come, let’s show you a better way. Let us take you from the past to the future and all its possibilities.
The viability of open source is no longer in question. Now the question is this: how forward thinking are you?