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It is Bitcoin, not Blockchain – Bitcoin USD (Cryptocurrency: BTC-USD)


I can not read a single article about criptovalute or Bitcoin (BTC-USD) (COIN) (OTCQX: GBTC) without finding comments like this:

Do not confuse blockchain with bitcoins. The first one is real and will be valid in all types of applications (supply chain, banking services, etc., etc.) I agree with you on the last one – Section comments SA

Or this :

I think and have said in the past that the blockchain itself has value in niche applications and not as currency, however the blockchain still has problems with the validation and speed of transactions that will limit the implementation size to more private uses .

So in practice, I think – SA comments section

Today I will show you exactly why most of the cases of use for a blockchain does not make sense, so we'll discuss how this error came about. I will show you how to use a blockchain correctly.When we are done, you will understand why it is Bitcoin (and probably also Ethereum), not blockchain.> Let's start.

The blockchain is the technology behind Bitcoin?

No Bitcoin has a blockcha in, but the real turning point was the fact that it is decentralized. The question of decentralization is, how can you do it? I mean, how will you create a decentralized system, really?

I could buy a lot of servers all over the world, but then it's not really decentralized because I own them and control them. So it would not work. I could get a lot of business together, but then it's really a committee, which is not much better.

Bitcoin's success derives largely from the low-tech, but the brilliant moves of Satoshi.

The real turning point in Il bitcoin was the fact that Satoshi understood how to design such a system in a surprisingly low way. It has created a system of incentives that would allow anyone to participate and open the original project, eventually moving away completely. Now people all over the world can take part, and have been incentivized by the system to do so.

The community has embraced the project and the plan has worked. Bitcoin works because people believe it, encode it and use it. There is no technology in the world that can exist or succeed without users (at least not before robots take over). It's the users, the community and the miners that make everything work.

Why are people getting involved with Bitcoin?

Some people do it because they believe in the project, some people see a business opportunity, some people just want to make money, but the reasons do not count. Bitcoin does not worry about why someone is involved. Very similar to a set of genes that replicates for reasons of which it has no awareness, Bitcoin is growing because it is well suited to its environment . The world we live in today is full of rampant censorship, inflation and a serious lack of trust in the central authorities (like the government .. thanks to Snowden, the central banks .. thanks to the collapse of 2008 and the bailouts).

So, is it any wonder that a system without intermediaries is an interesting alternative? Unfortunately, what we are seeing today are the uses of blockchain that come to the fore and make no sense.

Centralized block-blocks based on permission

Let's cut to the chase.

A centralized blockchain is an oxymoron. – Andreas Antonopoulos

A blockchain is a tool that comes with many design compromises in order to achieve a very specific goal, being able to operate in a hostile environment with nobody in charge. It requires an active and prosperous community distributed around the world to make it resistant to censorship and robust.

The closest comparison I can make is ter net, against one in between net. One is limited to certain users and may be useful for downloading documents from its human resources department, but the other has generated a global revolution in commerce and interconnectivity.

Are the blockchains immutable and not accessible?

No, actually. The reason why it is difficult to hack the blockchain, is because there are too many people with a copy, and tampering with the blockchain leaves obvious traces (changes in the merkle tree). These characteristics are called distributed consent and are characteristic and are what makes Bitcoin unattainable and immutable.

A blockchain is just a data structure. So, why can not I just take the Bitcoin blockchain and put all the Bitcoins in my account?

Well, there are thousands of copies all over the world. So when I try to send my version, it's just rejected by the community. Simple but effective.

Why is the blockchain evident? Because the only way to add a transaction is to use the hash of the last block and valid transactions from the mempool, then fix the hash algorithm. It's called proof of work, and the only way to compete to add transactions is to play according to established consensus rules, and the network is the most powerful in the world. Thus, there is no known way to rewrite the blockchain, since there is not enough hashing power to do it.

The translation, using a blockchain, does not mean that your project is immutable and unattainable, a "source of truth". It only happens when you have people competing on an incentive and a crowd to determine the "truth". This is called Consensus Nakamoto, the longest blockchain is the valid one. Bummer, because you just shot 99% of the ICOs from the saddle, I'm sorry for that partner.

Why using a blockchain will not help your business

How much do you think Facebook would be worth with zero users? Twitter? What if I copied the source code of these platforms and created Hansbook, do you think that Facebook would make a tear (ignore the legal ramifications for a minute)?

Well, what I just described is what happens every other day in the space blockchain. Someone copies Bitcoin or Ethereum (ETH-USD) and are ready for tenders to solve the problems of the world. The thing to which they are blissfully (or voluntarily) ignorant is the fact that solving those problems is difficult, and probably the best chance we have of lying with Bitcoin and Ethereum. The reason why Bitcoin and Ethereum are well positioned to solve these problems is that they were born of organic interest in the community; they have real active communities. These communities have some of the best experts in the world and do not show up just for the salary. How can a startup beat a basic movement of the smartest people in the world and software and cryptography experts? I guess you could try to force it, but that kind of inelegant solution will surely fail in the long run.

There is only something in an organic movement that is difficult to falsify. Energy in space is contagious, it attracts the best and the brightest.

Where does the blockchain come from, not Bitcoin?

Originally, Bitcoin was a very radical idea supported by a few enthusiastic cryptographers and software engineers. He started to gain ground, and he even traded for US dollars, giving him a "value", which was eventually enough to buy a pizza in 2010.

In the end people started to take notice. But how could you exploit the success of Bitcoin without having to buy Bitcoin? C & # 39; was it a better way?

This started a chain reaction in which people took the Bitcoin source code, copied it or wrote its own version from scratch. The problem was that, since Bitcoin was so new and nobody really knew if it would be successful beyond its first two years, how could you get people to switch to your Bitcoin currency? How do I get the name recognition?

A traditional business model came to the rescue and the crowd funding projects with Bitcoin eventually led to ICO funded by BTC or ETH (mainly ETH).

If you take part in a blockchain conference today, you're sure to find yourself in an echo chamber that looks something like this:

  • "Bitcoin was great, but their damn blockchain is not scalable.
  • "Bitcoin's underlying technology blockchain is a revolution that will change the world, solve problems with Bitcoin by adding a marketing team and removing decentralization."
  • "Bitcoin was a great idea, except that it's based on the extraction of energy that wastes energy and have no system of governance, we fix it by voting people and using the stake test! "

Because of the success of Bitcoin and, more recently, of the success of Ethereum, the goal has passed from the shoulders of Bitcoin behind Ethereum. Now we no longer hear about "Bitcoin murderers", we hear about "Ethereum assassins".

The king died, long life to the king

I do not want to go too far between the weeds here, but let's talk about two of my favorites, Tron (TRX-USD) and EOS (EOS- USD).

Tron – What aspect does a virtual civilization of the future look like? It is decentralized …

Global developers, from all over the world … are creating applications

– Promotional video Tron

Do I have to stop here, is it decentralized but based in China? I'm sure it will work. Also, they copied and pasted their white paper, sympathetic …

EOS was created to outperform and tarnish Ethereum. I'll let Jon Oliver take this. If someone can seriously take EOS after seeing it, there is nothing I can teach you.

Source: Jon Oliver – Last week Tonight – Cryptocurrencies via Youtube [19659048] EOS and TRX are the fault?

No, I do not think so. We can not blame people for trying to capitalize on change, this is part of what makes our global economy thrive, people run the risk trying to make changes and make money.

The whole thing is this downward ridiculous cryptocurrency started years ago. In the Bitcoin discussion forum (I would like to find this original quote), someone said at the beginning of Bitcoin, that the problem with altcoins is that they both depend on the failure of Bitcoin (well, 99% of them). If one of them actually succeeds in supplanting Bitcoin, then he will condemn himself to the same fate, to endless waves of imitators who try to eliminate them from their pedestal.

The biggest problem I have with most of these coins is the fact that they underestimate and do not really understand Bitcoin. They put themselves in opposition and make claims about Bitcoin that do not even make sense half the time (and today, the same can be said of the Ethereum assassins against Ethereum).

Where this becomes a problem, is that there are so many of them. Remember, Bitcoin does not have a marketing department. Unfortunately, the voices of those who know the truth are stifled by the crowd of pumps and landfills, start-ups financed by foreign VCs or OECs and sentenced to failure. Occasionally it happens to people who understand why Bitcoin is important to try and roll out the BS, but I think we are the minority.

How supply chains work today?

In a previous life I was a manager in a widget factory. We have created and shipped widgets across the United States and parts of Canada. The way our supply chain worked was like that.

  1. The raw materials would have been bought from all over the world.
  2. Brokers or distributors would have supplied and shipped these raw materials to warehouses in the United States.
  3. of raw material, and when we needed more, we bought it from our partner who distributed it.
  4. We had the opportunity to get from multiple distributors, but due to differences in raw materials, it was much easier to use a single source, if possible.
  5. We have sold our products to end users.

The end user received the information from us, we got it from the distributor and the distributor got the information from the source. If a particular material was needed and our usual source could not supply it; we had to find a new source. However, this was difficult for us because we had little visibility into what was happening before the material arrived there.

It was difficult to know where the materials came from and verify the attestations of origin. This led to the disparity between the quality and the variances of the raw materials that would have caused problems to the end-user when a widget did not seem to correspond to the previous widgets (slightly different raw materials).

So, what would a blockchain really support from a supply chain?

Now, if we think about this; Information is a key resource. Each party has an interest in controlling what others know. For example, if I found out that another supplier could get me the same material for less, or if I could find a source of higher quality for raw materials at the same price, I could look for a new supplier. My supplier would not want me to know, just as I would not want my client to know of a competitor who might be more suited to their needs. This inequality of information creates an unbalanced situation, in which some people benefit more than others.

This situation has been going on for a long time; as long as people buy raw materials, they transform them and produce finished products. If we move the cheese in the supply chain, it will be disturbing. But there is a discussion to be made that the net effect is positive.

  who moved the cheese Image source: Wikipedia

The main advantages of an open supply chain, published in an open ledger are the following: [19659070] the entire distribution chain will benefit from increased access to information and streamlined operations. In general, this is a positive change.

  • When people stop spending their time trying to benefit from hidden information, they will be freed to spend their time improving their processes and creating real benefits instead of temporary blocks of information. .
  • People with something to offer will be able to participate in the supply chain when they may not have been visible before, as a small company somewhere in the world with little visibility to big players.
  • With the ability to track products, shipments and raw materials on a distributed ledger, it will be possible to make better use of lean production and the supply chain; since the buffer size needed to justify the interruption will be reduced. This advantage would come from knowing that the shipment will arrive next Tuesday, instead of between 1 and 4 weeks. These operational efficiencies will make companies more competitive and profitable.
  • With more reliable information, it becomes easier to connect different systems with the software and use more automation. This will accelerate the transition from manual and time-consuming processes to highly automated and more effective processes; again increasing operational efficiency and putting more dollars into play.
  • In cases where the supply chain involves perishable products, such as food; a supply chain connected with the data published on the blockchain would help to find and eliminate cases of diseases transmitted from food at source.
  • The list could go on, but you get the idea. In the end this type of system would have tangible benefits for participants (and end users).

    A proper way to build such a system

    Now that we understand what NOT to do and what supply chains look like in general, let's talk about the right way to build a supply chain on the blockchain. The first thing is to use a level two solution with a token to encourage cooperation, make it decentralized and synchronize it with a large and reliable blockchain, such as Ethereum or Bitcoin. This video gives a detailed example.

    Source: Blockchain for Supply Chain Management via YouTube

    You will notice at the beginning of this video, Siraj says "… the only legit supply chain blockchain company I could find Syncfab." This only underlines the fact that most of the projects in this space are irretrievably lost and destined for failure (orders of magnitude slower, less secure and more difficult to maintain), but that among all there are some people who understand it. [19659077] Conclusion

    Clowns on stage today at blockchain conventions pale in comparison to the creators of the blockchain and cryptocurrency space (true math and cryptography scientists) in much the same way as the "artists" (nice guys who dance and make lips) sync) of today have replaced the real musicians who were able to sing, write and perform original music.

    There are ways to use a blockchain, in addition to what Bitcoin is using for. One of these examples is the Ethereum blockchain. However, most of the so-called use cases today do not understand what the blockchain is or does not do. From the wrong idea that a blockchain is "immutable", to the fact that it is "unattainable", there is a lack of high quality information in circulation.

    The correct way to use a blockchain for something like the supply chain is to distribute consensus, have a theoretical game model that incentives people and then synchronizes with a secure blockchain like Bitcoin or Ethereum. All of this just makes Bitcoin look like a German Bund compared to the shady ICO swimmer who sells their blockchain vunderkind v2.0.

    If you want to know the truth about blockchain and cryptocurrency, but you do not want to fall asleep in the process, then you should check Crypto Blue Chips. This article was first published there, but early access is not all I offer with Crypto Blue Chips. Members of my marketplace can follow my real portfolio and get weekly updates to the Bitcoin value indicator – Professional Edition. Give us a look, there is also a free trial.

    Disclosure: We are / are long-term BTC-USD, ETH-USD.

    I wrote this article alone, and expresses my opinions. I'm not getting any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose title is mentioned in this article.

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