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The Digital Revolution - Part 1 Blockchains

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Last week I did say I would enter into the exciting, and for many folks, confusing world of true digitalism.

The digital revolution has been gradually encroaching on our lives for quite some time. In fact, the first real advances in this new approach to technology took place roughly eighty years ago, but it only began to make itself obvious in the workplace in the mid seventies when we started to use computers.

Welcome to the third industrial revolution.

For most of us probably the most obvious example of a move from analog to digital took place in the music industry. Over time the technology was perfected and the recordings got better, and the method of playback improved, and we moved from shellac on through various improved iterations of records to hi-fi, surround-sound, video discs, CDs, and then something else happened. And this is where things took a rather unexpected turn.

Perhaps the most obvious non-linear development was the move from CD to download. The one was a physical object which had to be manufactured, used physical resources that had to be extracted from the ground, had to be moved from the factory to the shop, then carried home, then, when one got fed up with it, thrown away and maybe recycled.

A download does not require the object in the first place. That immediately means that almost no resources are required to make an object because it no longer is an object.

The other example of a digital world is the way we use money these days. Already over 97% of the money that is used every day is digital.

However, things don't stop there. The digital world is muscling in on just about everything that affects our lives. Let's see if we can approach this phenomenon through various categories.

Money; Entertainment; Communication; Work;
How about the digitisation of time and space? Now that is intriguing.

Let's go a little further, and add to the list above:
Art. I'm sure you've heard of NFTs. If you haven't, not to worry, I will explain.

How about the metaverse? Do we live on a holodeck? Maybe in five years time most of us will live a lot of our lives in a metaverse, which is a form of holodeck.

Not only is this all somewhat confusing to most people, it is interesting, exciting, and it is all already here.

What I propose to do in the next few blogs is try to explain, and put in context, some of the elements of this new world. The real problem for me is, where do I start?

I think maybe the best place to start is with the concept of the blockchain, and how that is going to affect the way we organise things, and what the benefits are likely to be, but also what fallout is likely to affect the way we live and how we earn our living. This is going to usher in a seismic change in our lives, and it would be a good idea to get the concept understood before we dive any further into the new digital world.

Let us start with Blockchains. What are they? and how are they going to change the way we do things?

A blockchain is usually described as being a distributed ledger. Okay, what's that?

Imagine a vast spreadsheet with entries, categories, times, events, all listed and interlinked. Now imagine that spreadsheet together with contents being stored and available on thousands of nodes across the planet. Each of those nodes will be a computer with massive storage capabilities.

Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on that blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participantís ledger. The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT).

I could go on with this, but for those of you who want a more detailed account of what a blockchain is and how it works there is an excellent article here:
I suggest you have a look.

There are several important issues that devolve from the use of blockchain technology.

First, blockchains provide a way people who dont know each other can do business with each other. Previously we have needed intermediaries to act as trusted partners. With business on a blockchain that is not necessary. And to assist with that we have such things as intelligent contracts.

At the moment, if you want to send money from your account to someone else's you need a bank. By using a financial blockchain that will be unnecessary in the future. You will be able to safely dispense with that intermediary.

If you want to enter into a contract with someone, you won't need a lawyer to act as intermediary. You will use an intelligent contract. A perfect example of this would be buying and selling a house. At the moment such activities sometimes take months to conclude, and involve a whole legion of intermediaries. Once the land registry transfers to a blockchain however, such a transaction will probably be done solely by the buyer and seller and an intelligent contract, and will take minutes instead of months.

Second, there is the possibility of re-democratising the web. At the moment we have half a dozen companies dominating the web and forcing their opinions upon us all. The original concept of the world wide web has been trampled under foot by such companies. With decentralised systems that is less likely to happen in the future.

Already we have a new generation of social media blockchains which will be owned by the users rather than a company with a megalomaniac chief executive. Blockchains are set to transform social media.

Third, blockchains are about to devastate the job market. Just as we are now able to dispense with trusted third parties, we will also be able to dispense with a whole raft of middle-men simply because they will be made redundant.

Without delving too deeply into this aspect at the moment, it is easy to imagine that rather a lot of industries that no longer need intermediaries will be shedding workers right left and centre.

The advances in artificial intelligence and robots will add to this decimation of the work force.

Next week I will look in more detail at the three aspects of blockchains and see where that is likely to lead in the near future.

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