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How Will Blockchain Change the Tech Industry?

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We have all seen various eras of computing. From the mainframes of 1960s and 1970s to desktop in the 1980s and 1990s followed by cloud computing of the 2000s where data center companies like Google and Facebook owned all user data, the world is now transitioning into the next era of computing - the era where our data will be owned by us and no third party platforms. 

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This new wave of computing, Web 3.0, is backed by the emerging yet the most powerful technology ever created - the blockchain technology. For those who have been asking why I am a proponent of blockchain over cloud computing, here’s why.

Before we dive into why blockchain is the future of computing, we first need to know what blockchain is and how it works.

Blockchain technology, first outlined in 1991 by some researchers, was put to its real-world application for the first time by Satoshi Nakamoto with the launch of Bitcoin (world’s first digital cryptocurrency) in January 2009. 

Blockchain is a shared, immutable, distributed ledger on which transactions are digitally recorded and linked together so that they provide the entire history of an asset. An asset can be tangible or intangible. Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

The goal of blockchain is to allow digital information to be recorded and distributed, but not edited.

Instead of relying on a third party, such as a financial institution, to mediate transactions, a blockchain network uses a ‘consensus’ protocol, cryptographic ‘hashes’ and digital signatures to ensure the integrity of transactions.

Consensus ensures that the shared ledgers are exact copies, and lowers the risk of fraudulent transactions because tampering would have to occur across many places at exactly the same time. 

Whereas cryptographic hashes (a number associated to each block in simple words) ensure that any alteration to transaction input — even the most minuscule change — results in a different hash value being computed, which indicates potentially compromised transaction input. 

Digital signatures on the other hand ensure that transactions originate from senders (signed with private keys) and not imposters. 

The decentralized peer-to-peer blockchain network prevents any single participant or group of participants from controlling the underlying infrastructure or undermining the entire system. 

Participants in the network are all equal, adhering to the same protocols. They can be individuals, state actors, organizations, or a combination of all these types of participants.

At its core, the system records the chronological order of transactions with all nodes agreeing to the validity of transactions using the chosen consensus model. The result is transactions that cannot be altered or reversed, unless the change is agreed to by all members in the network in a subsequent transaction.

These functionalities of blockchain make it decentralized, bringing back the peer-to-peer network. The next wave of computing is going to be a massive shift away from cloud computing. 

But why does the world need blockchain technology? 

Two major downsides:

I. Users don’t own their data;

II. Remote servers do not provide complete security. 

Blockchain technology with its decentralized system gives control of the digital assets back to the end-users; which means third party servers and infrastructure is not needed anymore. 

According to my friend Muneeb , Co-founder and CEO Blockstack (a US based blockchain company backed by Bitcoin), blockchain technology will fundamentally change the face of the tech industry and how the world operates on it.

According to him, it will have an economic, social, and political impact larger than the desktop and cloud revolutions in the following ways:

1. We’ll see the unbundling of data silos like Facebook and LinkedIn. The ownership of data and the associated power to monetize that data will flip over from large companies to users.

2. Cloud storage providers will get reduced to “dumb drives”, used to store encrypted data for users. It would become hard for cloud storage providers to differentiate themselves from each other. In the new model, they all provide just a basic storage utility.

3. Users will start owning (personal) cloud servers again; servers that can be online 24/7 and take actions on behalf of users when the users go offline. Running a secure, personal cloud server will become as easy as using current cloud services like Google Docs and Dropbox.

4. Publishing the source code for software will become almost a requirement for security reasons. Running closed-source “blackbox magic” software will be perceived as a security hazard.

5. Crypto tokens for protocols will become as ubiquitous as software licenses and terms-of-service agreements for cloud services: to use the software in decentralized computing you’ll need the respective token.

6. Crypto economy will reshape the entire lifecycle of tech companies; they’d start anywhere and end up on token exchanges.

7. Computer security engineer, applied cryptographer, and distributed systems engineer will become some of the most sought-after professions in the tech industry and, by proxy, popular subjects to study in colleges.

With companies like Blockstack playing an integral role in giving power back to the end users, and now with its Pakistan chapter, Stacks Pakistan, I am sure the time is not far where YOU #OwnYourInternet. 

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