If you haven’t already seen it, I recommend checking out this video about the future of Bitcoin’s technology. It really lays out what I’ve been saying for a while, that we need to look at the underlying capabilities and start thinking about it as a new method for trusted exchange.
Digital currency is moving fast. Very very fast. It seems a day doesn’t go by where something new doesn’t crop up. The Bitcoin 2.0 space is particularly hot, with various organizations vying to lay the groundwork for future applications. While the world is still stuck on the notion of Bitcoin as a digital currency (if they understand it at all), technologists are embracing a more expansive vision. We are rapidly approaching a world where machines talk to other machines, but until now have lacked a viable mechanism for machines to pay other machines in real time for their resources, access, and capabilities. This machine-to-machine interaction is heavily predicated on their being facilities to do lightweight tokenization.
Let’s construct a contrived example. Let’s say we have invented a new type of camera, designed to be worn at all times that constantly stores video (yes, I am aware that devices like this exist). Over the course of years that is a lot of storage. The traditional model for building something like this would have the camera connect to a service that you the builder controls. It would send you video, which you would store. You would pay for that storage after the fact, and bill the consumer to continue hosting access to it. This means that you are not only a hardware maker, but are also in the storage business for video. Your devices will only work while you are providing them with storage, and hosting the infrastructure necessary to keep the cameras running.
Now lets make this an automated system. The consumer enters their purchase details and instead of directly buying storage with you their actual device is credited storage tokens that it controls. Storage tokens are redeemable for storage at any place that accepts them at a dynamic rate of Megabyte per second. Locations that accept storage tokens don’t have to know anything about the consumer, they don’t have to have any relationship whatsoever. They just have to accept storage tokens, provide the user with storage, and let them put stuff there. This means that the price of storage will fluctuate dynamically over time based on supply and demand. The video device itself negotiates with locations for storage, and pays them directly. When it starts running out of cash it tells the consumer who can top it up anywhere.
Now lets fast forward. Our video device company has discontinued the product, and moved on to bigger and better things. We got out of the storage business but because the tokens are untrusted existing providers can continue to honor those contracts, they have market value because people can exchange cash for tokens and vice versa on open markets. We have machines which rely on and can pay other machines for services rendered.
If you start thinking about what that means in the long term we get the complete decentralization of resources. Standard industry tokens start representing all aspects of compute power, labor and physical goods. Ram, Storage, Compute at the base, followed by more sophisticated high level services like image analysis, post production processing, rendering pipelines, messaging, Database/Querying etc. Devices no longer rely on the resources of one company, but on the available federated resources of the network. That is a total paradigm shift in the making, and Bitcoin is making it possible.
We want to be able to build highly scalable systems that respond to market demand, but are currently mired in a sea of incompatible APIs and standards. Our resources are heavily fragmented and silo-ed. In large part because there has never been a way for someone to negotiate the use of a specific resource without establishing a relationship with the provider, all that is about to change for the better.