D3

Understanding the use of Blockchian and Cryptography in the modern and post modern econony.

How to use digital currencies to exchange value in day to day transactions. Using the medium as a true currency, not just a store of value or an asset.

This is the emergent trend.

There are many projects using blockchains and crptography to build solutions to real world problems. Each usually has a novel problem set and a market niche to capture. Some even develop their own novel blockchain frameworks and consist of strong teams underwriting the product. In real time, it appears to be analogous to a plant casting its seeds: many will be released into the world but very few will grow to be a strong oak tree.

There exists potential for a distribution of likely out comes. In one limit there will be a winner takes most scenario where a handfull of players underwrite the majoriy of transactions which occur, on the other there will be many, many interoperable players which all specialize in a particular use case. The ladder would really leverage the nature of distributed systems at the sacrafice of some sort of central control. The former will be more of a changing of the guard into the hands of few via the new technology. Neither can be predicted to be a superior means of which to run the global economy. Traditionally, centralized power has proven to be the best means of manifesting an agenda. What we have now is a function of sourcing our trust not to a central authority but to an implicitly secure system which is secure by design. The security exists through computational complexity.

Computational complexity is an abstract idea. The average user of the systems will have a suspecious feeling that they do not know what they are trusting. This will be a barrier ot entry. With enough inertia the adoption curve will soon consume every aspect of the modern world. This is because systems tend to trend towards that which is more efficient. Transactions will move towards that which reduces latency and error. Features like apend only and cryptography will only add security and trust.

The powerful phenomena we have here is compression. Compression of information, compression of data. This is a natural occurance. We take large concepts and distill them to words and sentences. We consolidate our life experiences into books. We shorten words to acronyms and slang to get a point accross with fewer syllables. The same is true in network communication, computers, transactions. Compression is everywhere and it is in essence the first aspect to understand in order to trust a blockchain with no central authority.

If all of our transactions consisted of all data available which could be relevant to the transaction, the data would be prohibitively large to transact over space time. Instead we take the relavent information and compress it down to some string of bits. Me and you becomes x and y which becomes 0 and 1. This happens billions of times a day accross the globe. Problem is, 0 and 1 can be turned back into x and y which can be turned back into me and you. This is why we trust central authorities: to insure these transactions incase someone tries to take advantage of me and you. This is where encryption comes in.

Add cryptography to the compression algorithm and you have one way compression. A means of condensing information without being able to easily reverse it. This is in essence a hash function. Analogous to the breaking of glass or the burning of wood. The information is still there but it is prohibitively difficult to reverse. Here in lies the security. This condensed, secured information is now small enough to travel around the globe instantly and safe enough to not be stolen. At this point, what is the weakest link?

You. You with open laptop where one passoword protects the vast majority of your digital assets. Now add your private and public keys, ever changing adresses and multiple digital wallets. Block chain is not ready for prime time. Until this is solved, we will not be acquiring milk and bread or paying for services in crypto currencies. The catch is that there is an ever growing group of people working every day to make this possible. This will not go away, thousands, millions of people will not suddnely stop trying to solve this problem. Some will win, some will lose. The winners will build the technology that underwrites the entire globalized economy.