I recently launched a new site called Decentral Station: a curated list of links with an introductory essay. This is a short version of the essay.

Introduction

In 2009, I wrote a book called Pull, on how things would be different once everything is online and interconnected. That vision is finally coming to life. This short essay is my attempt to describe the fast-moving world of decentralization: blockchains, cryptocurrency, triple ledgers, distributed apps, and more. I’m going to start using eBay as an example.

  • Blockchain: A permanent, time-stamped record of encrypted transactions & data.
  • Ethereum: An open-source virtual machine that allows programmers to build dapps using blockchain. Includes ETH, its own native currency.
  • Smart contracts: Business logic encoded to run on Ethereum dapps, using new contract-building languages.
  • Dapps: Distributed apps — applications that use blockchain storage and computing power through Ethereum. Generally, dapps look and feel like existing apps you know and use every day.
  • Ether (ETH): The Ethereum currency — can be used as a token of value; also has real market value as a currency and will replace Bitcoin in many cases.
  • Miners: People who own machines that store blocks and provide computing power.
  • Gas: A token used to pay miners a small amount of Ether for each transaction.
  • Decentralized storage: Lets us store as much content as we like on computers around the world and pay a small fraction of what we would pay Dropbox or Amazon.
  • Decentralized processing: Similar to “Folding at Home” and other large-scale processing projects, we will use thousands of small computers to do supercomputing and pay each one a bit of gas for the service.
  • Extras: There will be plenty of APIs, gateways, exchanges, security, authentication, and other services to facilitate communication between ecosystems, especially for highly regulated industries and products.
  • Web 3.0 browsers: New browsers are being built that help you manage your cryptocurrency, keys, passwords, blockchain, identity, permissions, etc.
  • Trustless: There is no third party in the middle to manage the transaction, and you don’t have to trust the miners who do this work for you — you pay a bit of gas for each transaction and every miner gets a copy of your record in the blockchain. High redundancy and confirmations ensure that bad actors can’t steal your money.
  • Latency: It can take up to ten minutes to confirm a transaction and have it replicated on thousands of computers managing the blockchain. This is a feature. It’s meant to ensure that the cryptography can’t be hacked by super-fast machines. Many companies are working to add “sidechains,” tokens, and other software to reduce confirmation time, which is essential for certain markets.
  • Scalability: The system scales out efficiently, since millions of people paying a bit of gas is a strong incentive for thousands of miners to provide services. The more transactions, the larger and more efficient this market gets.
  • Throughput: The goal is to upgrade this trustless system to process tens or even hundreds of thousands of transactions per second, at the level of today’s large-scale proprietary systems, like Visa and SWIFT. We are not there yet. Even though security is built into the system at the lowest level, time scalability will be a challenge as more people want to use dapps. Other systems provide the speed, but not the trustless security. Many people are currently working on this problem, with different types of solutions in different industries.

Provocateur, professional heretic, slayer of myths, speaker of truthiness to powerfulness, and defender of the Oxford comma.

Provocateur, professional heretic, slayer of myths, speaker of truthiness to powerfulness, and defender of the Oxford comma.