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Guest post by Adrian Daluz, see his average blog here.
I've been in contract with a blockchain company, ClearPoll, in the last 14 months. It was a wild ride. Looking like a whole new open space in the technology industry and we were all excited to ride that wave, and then see the space disintegrating around us while people lost a stupid amount of money with hype investments. Yet despite all this, I remain optimistic about blockchain technology. Not because of overcrowding, "We promise the world a better place", but because of the real tangible benefits it offers companies.
Infrastructure costs
The downfall of technology companies, infrastructure costs make up most of the operating expenses for any company in the technology space. Pay for servers, databases and the like quickly burn the bank. For example, it is estimated that Netflix spends about $ 40 million in cloud services in the year. For a much smaller company, which does not deliver video, the cost is obviously much lower, but it's still a big chunk of the annual budget. It's money that you can eliminate, in part, by switching to a blockchain back-end for your service.
If your business can start storing and distributing content via a blockchain, you can push infrastructure management costs from yourself to customers accessing that data. We continue to use ClearPoll as an example, a blockchain polling application.
If ClearPoll was a traditional voting app, you would have opened the application and requested a list of surveys. The application will send it to the ClearPoll backend, which will then ask the database for a list of polls. The backend then sends this back to the mobile app to be presented to you.
Using this model, ClearPoll pays for the server that stores the survey and bandwidth to send you that survey.
Now let's have a look at a simple blockchain for ClearPoll, this is a simplified view, but gets the point. The ClearPoll application opens and a list of surveys is requested. The application connects to a public node on the blockchain, queries the chain and gets active polls. These are then sent back to the mobile application.
In the blockchain method, what does the ClearPoll pay? They do not execute nodes, do not host the chain, and do not control connections to the node. These are all users.
Public users run nodes on their local networks, which means that everyone stores a copy of the survey on their local hardware and serves it through their local connection.
In this scenario, ClearPoll does not have to pay anything in terms of infrastructure.
There is a downside to this and this is the problem of how to pay the nodes. The nodes will be executed only if they are paid to do so, nobody will be able to extract the data inside and outside the company chain without being rewarded. It is not feasible when the difficulty is high and the costs of electricity accumulate. So, how will you manage a company?
The tokens are free money
They create a token. For many companies that appeared during ICO mania, the checkers were literally free money. Create a token, advertise it, and suddenly you can download it for real money. You have created a currency on speculation and the clamor that you can convert for real money. So, use it to pay the knot premiums.
We continue to use ClearPoll, have created the ClearPoll or POLL token shortly. To pay the premiums, it is sufficient to have a sufficient POLL to distribute and a way to recover the POLL for future payments. If they built a self-sufficient chip economy, they could distribute the knot premiums consistently, month after month, with their created token and never immerse themselves in their own corporate funds.
There are some contrary arguments, for example, not selling the recovering POLLs are losing on potential revenue. It all comes down to the token economy, but since this is a false example it is not crucial to the point in question. Create fake money and use that fake money to pay users who manage their infrastructure. It really is a victory.
Is it a bad thing for users?
Whether it's a bad thing for you, individually it comes to mind. You're backing up for a big company, but you're not doing it for free. You get paid, but you get paid in a cryptographic token. This is both a bad thing and a good thing depending on the market of that particular currency.
The important thing is that it increases the mass adoption for blockchain in general.
If companies like Netflix, Amazon and Google had to jump on the bandwagon and create large-scale functional blockchains, the whole space would benefit.
There are current drawbacks to this model that provide a negative result to users, such as the slowness of blockchains to store and deliver instant data. So how it is, if someone like Netflix used a public blockchain, the user experience of their application would be greatly reduced. This is a timing problem, something that would have been solved if they decided to take the plunge.
So why nobody talks about it?
I'm, just not publicly. It's a discussion I've had with many people on different blockchain projects, because it's a huge advantage that jumps out to everyone who has paid huge AWS bills in the past. However, talking about it publicly is almost a pity, he admits that you are doing something not to "benefit from humanity", but rather to save on profits.
It means a change in the way you perceive blockchain success, because mass adoption is based on large-scale applications that appeal to the majority.
Until the blockchain community will no longer say "Why is this on the blockchain?" Instead, ask "Why is not this on the blockchain?" This huge leap forward can not happen. Right now, companies are trying to indulge the hype market that we all built, trying to generate revenue on a product nothing.
Instead we have to push them to provide products on a tangible scale and reduce annual costs is a big motivation.
If you would like your company to be present in the Hirech Tech Business Showcase, get in touch with us at [email protected] or on Twitter: @SimonCocking
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