Decentralization: It’s not just for cryptocurrencies anymore.
Despite bitcoin’s notorious associations with drugs and cybercrime, the party line for defenders of the digital currency has been that it’s “actually about the blockchain,” the decentralized database that acts as public ledger for bitcoin transactions. Concrete examples of what this line meant were formerly hazy, but Ethereum, a bitcoin-like cryptocurrency with its own special blockchain, is starting to point it out to us more clearly.
Ethereum is like bitcoin with a few more tricks up its sleeve: In operating as a blockchain-style currency, it also serves as the foundation for a virtual machine, becoming a decentralized software “computer.” This computer’s capabilities are pretty cool, considering it occupies no physical space and only exists because people around the world opt in to run it in small pieces on their own computers.
A decentralized virtual machine allows for the development of decentralized apps. Even though a software’s code is never hosted anywhere truly central, it is signed and verified with Bitcoin-style precision. This establishes an ultra-secure censorship-free paradigm, not only in terms of creating powerful, tamper-proof software for Ethereum, but for being able to create and share absolutely anything you want to online.
This environment is exactly the tool that developers need to create the previously mentioned apps — excuse me, smart contracts — as well as any others they can dream up.
It’s 2016 and the word “app” lacks a certain luster; Ethereum’s apps are called “smart contracts.” The smart contracts of the future could run 100 percent securely in plain view to clone an AirBnb-style rental service without taking a service fee, to raise money without the infrastructure of Kickstarter or Indiegogo behind you. Anything that can be coded can be run as designed, without fear of government, business, or any other private interest interfering. Once up and running, decentralized apps remain available until the developer takes them down.
Ethereum’s marketing copy bills it as nothing less than “the way the internet was supposed to work.”
Lest we forget it, Ethereum is exchangeable for real money. At the time of this writing, one Ethereum is worth $9.52 USD. Its value has lately been climbing aggressively and a set of major banks recently test-drove it as a means to trade bonds. The word is getting out, and momentum is starting to build.
Let’s hope the developers use their powers for good.