A few weeks ago, there was a speaker series event about Bitcoin, data, and Blockchain in the Auditorium at the VU. There were supposed to be two speakers but one of them couldn’t make it. Fortunately, it didn’t make the speaker series less interesting because Colin Meulema from bitcone.io had plenty to tell. The speaker series event was a great follow up on the blog about SBE students on cryptocurrencies. What is all behind these cryptocurrencies? This blog is a recap of the event which was an introduction to Blockchain and Bitcoin.
Who is Colin Meulema?
Colin is doing a lot more apart from his own company Bitcone.io where he offers seminars about the importance of Blockchain or in other words the underlying technology of Bitcoin. He is working for Robovision, an Artificial Intelligence company which is in his opinion one of the best AI-companies. He does consultancy and advises NGO’s. He helps very “rich” people with crypto investments. And he is setting up a company which is called ‘Learn’. Setting up a new way of learning especially for people who have it ‘shitty’, like refugees for example.
The world’s most valuable resource
That’s what data is all about nowadays. Companies which are all about data are now one of the most valuable in the world. Amazon, for example, knows exactly what you buy and where you buy. Facebook actually knows everything about you. The reason why these data companies are getting more and more valuable comes with the evolution of ‘deep learning’. “Algorithms can predict when a customer is ready to buy, a jet-engine needs servicing or a person is at risk of a disease.” The Gods eyes view from the biggest data companies are getting stronger and stronger because of this. They can test everything and create behaviour models. You can call it ‘advanced propaganda’ what these companies can do nowadays. But in the end, it’s all based on data, which we are all opening up to companies like Facebook. Perhaps the scariest part is that all this data/the technology is in the hands of a few. Once you have centralization of power, people getting in charge of that data, that’s when things get really scary.
Data of value
One of the drivers behind Bitcoin/Blockchain is decentralization. Having this ‘open source piece of code’ which we can all check, knowing that it’s not controlled by anyone or anything. A lot of people think about Bitcoin that it’s just money for the internet, but it’s much more than that. Blockchain overall is a new type of database system, that handles data in a different way then was being known. When we are talking about data, it is much more than just something monetary. Don’t just think about ‘digital cash’, but think about more pieces of data like your identity. We’re moving from the old analogue systems to digital systems. It’s important to realise that these new types of systems can also protect and safeguard data too. It’s an evolution in how we store value. What Colin wants to show in the presentation is that evolution of systems of value is just much wider than ‘money’. Money was the first one, Bitcoin was the first to do this.
-It created a purely peer-to-peer electronic cash system, which was never before possible.
-Double spending was also new. This means that you’re not only sending the money to someone but also giving away the rights to that piece of data.
-The other thing it accomplished, was a trustless consensus. Being able to reach an agreement with a group of people, a network, without needing to trust a single entity in that system.
-And it’s also a system where value/money is being created without a central power controlling the rules, having influence. This is very important if you want to keep your value.
-Another very important one, Bitcoin is a protection from unexpected inflation. The system that we are in right now, governmental money, have the power to just create more. So the purchasing power of the money you own know have probably decreased a lot in 10 or 5 years.
Systems of value
If you look at all the evolutions in money that took place since 3000 BC when the first bank opened in Babylonia. Here it was just the registration of who owns what. The first paper money was established in 1000 AC in China and this was another big step in the evolution of money. Around 1400 we had the first bank that applied a new type of accounting. Whereby they are keeping track of a ledger, money comes in and money comes out. After that from 1800 on countries were adapting to the gold standard. So, from that time on the money had to be backed by a certain amount of gold. You couldn’t just create more, because that would mean you also needed more gold in the banks. Then in around 1946, we had the first credit card being created. After that in 1971, both the US and Europe could let go of gold-backed forms of currencies. From that time on it was government issued money named FIAT. Governments gained more power, to just create more money. Bitcoin is a very logical evolution in these systems of value, in Colin’s opinion.
In its essence, Bitcoin is a distributed database. Who sends what and who sends what to who. And we’ve had these types of ledgers already. Companies, banks, systems. With these old systems, you had to go to the middle/centre. “When I want to send money to my mother in law in Brazil I need to send money to my bank, they need to send it to a bank in Brazil and the Brazilian government will take a cut from it before it gets to my mother in law.” But it’s also the case with other systems like Facebook. If you want to send someone a message, you’re letting Facebook know. If you want to have a ride you have to go to Uber. In these new systems, the way we interact with each other is different. It’s decentralized and distributed. If I want to transfer something of value, I can just send over that value without some centralized system in-between. Also, when it comes to security it’s much safer. A DDOS attack, for example, is very very difficult to accomplish on a Bitcoin network, as it is decentralized and distributed.
Store of value
Gold has always been a much better store of value then other types of systems have been. It survived more than 2000 years. It’s just a shiny metal, but we’ve all had an agreement on it that it is worth more than other metals. Bitcoin is being compared to it because of its scarcity and the fact that it is decentralized. Above that, it is both accepted all over the world. Bitcoin actually is the first system that has that much of the same characteristics as gold.
Top of the iceberg
What is known now from the outside is so much less than Blockchain it’s actual possibilities. What you may have heard a bit about are smart contracts. Those are all the rules that can be applied to the systems of value. Ethereum, another cryptocurrency, is a good example of that. The overall blockchain application possibilities are huge and are going to make a big difference in for example the supply chain, voting and medical data. Nevertheless, adoption to Bitcoin and Blockchain is still in its early installation phase. As it always takes time to adopt from older systems to newer systems, it is the same with Blockchain.
Colin really wants to clarify what the possibilities of Blockchain are with his seminars and what it’s all about. So, if we talk about cryptocurrencies he is not suggesting you what to invest in, but more like why to invest. Are you interested in the seminars of Colin Meulema? Visit Bitcone.io. Also, check out the previous blog and read what crypto investors at the SBE have to say about this technology!