Bitcoin as infrastructure [iv]

031 December 26, 2014 -- (tech)

Also read: Part I, Part II, Part III.

Part IV: Examples and conclusion

While I've come to this idea of Bitcoin-as-infrastructure on my very own more than half a year ago, I very much doubt it's a new one, and I doubt even more that it was a new concept back then. In fact I had stumbled upon examples illustrating it some time after finishing the first part of this series. This only made me realize further that the possibilities involving Bitcoin are still largely left to exploration even now, five years after Bitcoin's inception and the now famous Bitcoin paper.

In retrospect I believe I would have been much more inspired to call this concept "blockchain as infrastructure". That's not to say that Bitcoin itself, as a financial system, is not interesting; quite the opposite, in fact: while I personally don't believe that bitcoins and Bitcoin are meant to remove existing currencies, much like the Internet hasn't removed phones, for example, it is, to say the least, disruptive and it will change the way we think about money, payment, banking and so on. As I mentioned at the very beginning, I am not very familiar with finance, but there are already services for betting1, securities exchange2 and gaming3.

The blockchain, however, can be used for much more than transferring money. As money are proof of wealth, one could in theory devise a blockchain-based system for proof of other things, from authenticity of documents (which could in turn be used for making digital contracts) to "proof of process", such as the idea employed by NotaryChains.

One of the early blockchain-based ideas that I've encountered was twister, a microblogging service inspired, as you might have already guessed, by Twitter. Twister is in fact a hybrid system, using a blockchain for user registration and authentication, and BitTorrent (especially its Distributed Hash Table) for the distribution of actual messages. I doubt it's gained very much momentum, but it's being actively developed, which is a good sign, if nothing else. There are other, more general, blockchain-based communication protocols, such as BitMessage, but they're even less popular at the moment.

A favourite of mine is DNSChain, a naming and public key infrastructure system that claims too many features to list here; in particular, the security features are very interesting: Man-In-The-Middle attacks are theoretically unfeasible4 and practically impractical; the hierarchical Public Key Infrastructure chain of trust is replaced with the blockchain; domain seizures are limited to network resilience, and so on. I like the idea very much and I'm very curious if they'll manage to deploy it.

There are many other such projects, providing either infrastructure (e.g. Bitcloud, OpenLibernet) or just a better interface to blockchains/cryptocurrencies (e.g. Bitcore). Some are interesting, while some are trying to achieve too much in my opinion. For example, Ethereum looks like a very promising solution for application development, aiming to create a programming language for this purpose. It might fail, but I'm fairly sure that it won't be the first attempt, and if not this one, then some other project will do things the right way.

At the very end I would like to restate the potential of Bitcoin, or the blockchain, call it whatever you like, to become another layer in the backbone of the current computing infrastructure. I prefer to see it as such, and I strongly believe that it should be seen as such, because the possibilities behind it are definitely worth exploring, discussing and implementing into something better than what we have today. Time will eventually tell if I am right, of course, but then again, that's not what matters.

  1. Such as BitBet and my personal favourite, War of Life, which unfortunately went down meanwhile.

  2. If you're involved in some way or another in Bitcoin, you must have heard of MPEx by now.

  3. Those seem to be focused mostly on betting games, but using Bitcoin as an in-game currency has real potential, since from a point of view bitcoins aren't much different from Linden dollars or InterStellar Kredits, to name only a few so-called "virtual currencies"

  4. If you run a node, which one wouldn't expect most people to do, I suppose. The main idea is that if you keep a copy of the blockchain on your hard drive, you'll never have to go through an external DNS provider, while network resilience should guarantee that no one messes with everyone's domain records.