Blockchain Revolution

GLOBAL COMPUTING: THE RISE OF DISTRIBUTED APPLICATIONS
Before we examine the other possible distributed business entities like bAirbnb, a
word on how the underlying technology enables decentralization. Until the
blockchain, centralized organizations have held concentrated computing power.
In the first decades of enterprise computing, all software applications (apps) ran
on the computers of their owners. GM, Citibank, U.S. Steel, Unilever, and the U.S.
federal government owned huge data centers that ran proprietary software. Companies
rented or “time shared” computer power from providers like the 1980s giant
CompuServe to run their own applications.
As the personal computer matured, the software market specialized: some
developed client apps (the PC) and some, server apps (a host computer). With
widespread adoption of the Internet, specifically the World Wide Web, individuals and
companies could use their computers to share information—initially as text
documents and later as images, videos, other multimedia content, and eventually
software apps.
3
Sharing began to democratize the information landscape. But it was
short-lived.
In the 1990s, a new variant of time-sharing appeared, initially called virtual
private networks (VPNs) and then cloud computing. Cloud computing enabled users
and companies to store and process their software and data in third-party data centers.
New technology companies like Salesforce.com built fortunes by harnessing the cloud
model to save customers the big costs of developing and running their own software.

---

Cloud service providers like Amazon and IBM built ginormous multibillion-dollar
businesses. During the 2000s, social media companies like Facebook and Google
created services that ran on their own vast data centers. And to continue this trend of
centralized computing, companies like Apple moved away from the Web’s
democratizing architecture to proprietary platforms like the Apple Store where
customers acquired proprietary apps, not on the open Web but in exclusive walled
gardens.
Again and again in the digital age, large companies have consolidated—created,
processed, and owned or acquired—applications on their own large systems.
Centralized companies have begotten centralized computing architectures that have,
in turn, centralized technological and economic power.
Some red flags: With single points of control, companies themselves are
vulnerable to catastrophic crashes, fraud, and security breaches. If you were a
customer of Target, eBay, JPMorgan Chase, Home Depot, or Anthem, or for that
matter Ashley Madison, the U.S. Office of Personnel Management (second breach!),
and even Uber, you felt the pain of hacking in 2015.
4
Systems of different parts of a
company still have big challenges communicating with one another, let alone with
systems outside the firm. For us users, it means that we’ve never really had control.
Others define our services with their implicit values and goals that may conflict with
ours. As we generate reams of valuable data, others own it and are building vast
fortunes—perhaps the greatest in history—while most of us receive little benefit or
compensation. Worst of all, central powers are using our data to create mirror images
of each of us and may use these to sell us stuff or to spy on us.
Along comes blockchain technology. Anyone can upload a program onto this
platform and leave it to self-execute with a strong cryptoeconomical
5
guarantee that
the program will continue to perform securely as it was intended. This platform is
public, not inside an organization, and it contains a growing set of resources such as
digital money to incent and reward certain behavior.
We’re moving into a new era in the digital revolution where we can program and
share software that’s distributed. Just as the blockchain protocol is distributed, a
distributed application or DApp runs across many computing devices rather than on a
single server. This is because all the computing resources that are running a
blockchain constitute a computer. Blockchain developer Gavin Wood makes this point
describing the Ethereum blockchain as a platform for processing. “There is only one
Ethereum computer in the world,” he said. “It’s also multiuser—anyone who ever
uses it is automatically signed in.” Because Ethereum is distributed and built to the
highest standards of cryptosecurity, “all code, processing, and storage exists within its
own encapsulated space and no one can ever mess with that data.” He argued that
critical rules are built into the computer, comparing it to “virtual silicon.”
6

---

As for DApps, there have been warm-up acts prior to blockchains. BitTorrent, the
peer-to-peer file-sharing app, demonstrates the power of DApps as it currently
consumes over 5 percent of all Internet traffic.
7
Lovers of music, film, and other
media share their files for free, with no central server for authorities to shut down.
Iconoclastic programmer Bram Cohen, who incidentally is less than enthusiastic
about bitcoin because of all the commercial activity around it, developed BitTorrent.
“The revolution will not be monetized,” he said.
8
Most of us think that generating revenue and economic value through
technological innovation is positive, as long as the revolution is not monetized by the
few. With blockchain technology the possibilities for DApps are almost unlimited,
because it takes DApps to a new level. If, as the song says, “Love and marriage, love
and marriage, go together like a horse and carriage,” then so do DApps and
blockchains. The company Storj is a distributed cloud storage platform and a suite of
DApps that allow users to store data securely, inexpensively, and privately. No
centralized authority has access to a user’s encrypted password. The service
eliminates the high costs of centralized storage facilities; it’s superfast; and it pays
users for renting their extra disk space. It’s like Airbnb for your computer’s spare
memory space.