What are blockchains good for?

As the speculative frenzy on digital currencies begins to die down, attention is finally turning to the utility and potential use cases of blockchains.

In this article, I will cover the different types of blockchains, what they are good for, and how you can find out more about the legitimate, legal use cases of this revolutionary technology.

The different types of blockchains

In 2009, Satoshi Nakamoto released Bitcoin. It was the world’s peer-to-peer electronic cash system on an infinitely scalable public proof-of-work blockchain. Bitcoin’s native token can move on this ledger between different wallets with time-stamped ledger entries recording each transaction.

Soon, many different types of blockchains proliferated as companies and loosely associated groups of developers mistakenly tried to “improve” on Nakamoto’s original invention.

Broadly, blockchains fall into two categories: public and private, although many different types of consensus mechanisms are associated with these two types.

The difference between public and private blockchains is what it sounds like: anyone can write to and build on a public blockchain, while private blockchains require permission to access and use. Think of public blockchains as the internet and private blockchains as the various intranets run by private companies, government agencies, etc. It’s not a perfect analogy, but it will do.

These two types of blockchains can have many different consensus mechanisms. The best known of these are proof-of-work and proof-of-stake. I will not go into the nitty-gritty of these in this article, but those interested can read more about the flaws in proof-of-stake blockchains here. Of course, there are other types of consensus mechanisms, such as proof of history, proof of authorization, and others, but covering these is beyond the scope of this particular article.

What are the benefits of a scalable public blockchain?

To date, no public blockchain has come close to Satoshi Nakamoto’s original design in terms of security, scalability, and the ability to build upon and use it without permission.

What are the benefits of an infinitely scalable public blockchain?

First, it’s public, so anyone can do whatever they want, as long as it’s legal.

Second, it is infinitely scalable, so there is no limit to throughput transactions, meaning blockchains like BSV can process any amount of data required by the applications using the protocol.

What are some of the potential use cases for public, scalable blockchains? Let’s cover three of them in more detail.

Micropayments – In the Bitcoin White Paper, Satoshi Nakamoto told us the core problem Bitcoin was designed to solve: enabling small, random payments on the internet.

Due to the costs associated with trusted third parties such as Visa or PayPal, transactions below a certain amount were financially impossible. Nakamoto solved it by creating the world’s first peer-to-peer electronic cash system, which requires no trusted intermediaries and thus has no associated costs. For the first time, virtually free transactions of kroner or less were possible online.

Many who encounter micro- and nano-payments for the first time wonder why they are so important and what we can possibly buy for a krone or less. BSV attorney Issac Morehouse created an insightful series that explores the potential of small payments in detail, but I’ll outline a few here.

With small payments, a new breed of social media apps that don’t display ads or collect data could be born. Instead, users can upload media they own, such as photos or videos, and receive micropayments for each like or share. Apps like La Mint are already showing how this can work.

Micropayments can also lead to new game models. Instead of subscriptions, players can both pay and earn in-game, and new ideas like Instant Leaderboard Payouts could change the way games work forever. This is already happening in Haste Arcade.

Micro- and nano-payments can also change the way we consume content online. Instead of visiting a website and agreeing to have our data collected while being exposed to a barrage of annoying ads, we can pay a penny to access an article and leave a tip for the author if we liked it.

Of course, these ideas only scratch the surface and have deep implications for how the Web2 internet works today. As a result, coalitions of incumbent Big Tech firms created an organization called COPA to sue Bitcoin’s inventor in a futile attempt to maintain the status quo. More on that another time.

Data Management – They say that data is the new oil, and like oil, a few large companies are keen to monopolize the flow, and leaks/spills can have catastrophic consequences.

There are two major problems related to data that public, scalable blockchains solve.

First, users who upload data to the web do not own it. Usually it is owned by big companies like Meta and Twitter, who make money from it. Since they control the databases, they control the rights and all the profits. They also have countless powers to cancel user accounts and delete data at will. Just read their terms of use which describe all of this on these platforms.

Second, data is stored in huge databases and silos, creating honeypots for hackers to break in and steal it. This kind of thing compromises privacy and creates massive headaches for companies that often have to pay huge monetary and reputational costs. Not to mention all the phishing attacks that users have to avoid when the platform database has been compromised and gives the hackers access to personal details that would otherwise be out of reach.

But what if there was only one database? And what if it was public, so anyone could write to it without permission, paying small fees to do so? Furthermore, what if data could be encrypted via hashing so that no one but the key holders or those they give access to could see it? What kind of implications will this have for the world?

Well, for one thing, interrupting culture and censorship would end immediately. If a user was deleted from one app, they would simply go to another, enter the keys, and all their data would be there. On top of this, companies wouldn’t suffer from the same type of data breach because there wouldn’t be large data silos to hack into. Furthermore, any access to or changes to the data would be time-stamped and dated, leading to a new era of data integrity with no possibility for corruption without detection.

Public blockchains are so much more than advocates of systems that BTC has let the public know about. They have revolutionary implications for data storage, management and transmission and equally radical consequences for the monopolies that control data storage and flow today.

P2P Transactions – Have you ever wondered why the internet developed the way it did? How did we end up with a network controlled by a few large companies with all data flowing through their servers?

Well, there are a few reasons, but one of the main ones is economics. Despite the electronic cash that was built for it when the internet first rolled out commercially in the 80s, there was no such thing as a scalable micropayment system in the early days of the web, so platform owners had to come up with new ways to generate revenue . Running data through large corporate server farms to harvest users’ online behavior and monetize it with ads was one way to make it financially feasible, and ultimately that’s what we ended up with and still have today.

However, public, scalable blockchains combined with IPv6, which makes an almost infinite amount of IP addresses available, could change this. For the first time, it’s possible to send data, whether it’s a text message or a photograph, directly from one person to another without going through the servers of companies like Google (NASDAQ: GOOGL ) or Meta (NASDAQ: META ).

Of course, someone has to process the data in such communication, and that’s where miners/nodes come in. Bitcoin nodes are also data processors; they are paid to put Bitcoin transactions into blocks and process them, earning both block subsidies and micropayments in the form of transaction fees for doing so.

When I spoke to Dr. Craig Wright at the 2022 Dublin IoT conference, he told me that Bitcoin and IPv6 complement each other, working in a symbiotic way. Bitcoin payments can make IPv6 commercially viable, and IPv6 can help make Bitcoin the true peer-to-peer network it was designed to be.

For the first time, a truly peer-to-peer internet is possible. It’s all thanks to a scalable public blockchain.

Learn more at the London Blockchain Conference

It doesn’t take much imagination to figure out how radically different a Bitcoin-powered world could be.

It is one where, thanks to infinite scalability and true peer-to-peer transactions powered by micropayments, true privacy and data sovereignty are returned to the people.

It is one where time-stamped logs of all data changes are publicly visible to all concerned, making hacks and breaches easier to detect and discouraging them in the first place.

It’s one where content creators and entrepreneurs have new, alternative ways to make money while maintaining ownership of their creations.

To learn more about the use cases and implications of infinitely scalable public blockchains, join us at the London Blockchain Conference between May 31st and June 2nd.

Far from being a BSV conference, the London Blockchain Conference welcomes anyone interested in legal, legitimate use cases for blockchains of any kind. We believe the free market will decide which blockchain wins, and we are interested in hearing a diversity of opinions and viewpoints on potential use cases, technological developments and entrepreneurial endeavors using blockchain technology.

Come to the world’s largest blockchain conference and share your views. Secure your tickets or register as a speaker today!

Watch: London Blockchain Conference 2023 Brings Government Business into the Blockchain

width=”562″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”>

New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.