The latest insights from your peers on the latest in Enterprise IT, straight to your inbox.
Learn what's what in this handy primer.
This article is by Featured Blogger Heather Wilde from her blog. Republished with the author’s permission.
Unless you've been living under a rock, you've probably heard someone mention Bitcoin, Cryptocurrency, or "mining" sometime in the past few years. But do you actually know what they're talking about?
For most people, Bitcoin is the introduction they have to the world of blockchain technology. Without a deeper knowledge, thoughts quickly spread to things like the dark web, the Silk Road and all sorts of other nefarious things -- which as you can imagine has caused a huge problem for mass adoption.
In 2015, Joe Lubin, co-founder of Ethereum (one of the types of blockchain), met a guy named Michael Oved at a music festival in Las Vegas. Lubin and the other members of his then current venture, ConsenSys, gave Oved a crash course in blockchain and Ethereum.
After spending the following weeks researching the technology in detail, Oved determined how to apply his background in algo-trading to understand how the world of finance could be rewritten in a peer-to-peer fashion. This became the foundation for AirSwap.
AirSwap is a decentralized trading platform. Essentially, it's like a stock exchange specifically for Etherium tokens. Users can trade tokens in a global peer-to-peer trading network, just like on any other exchange. AirSwap itself has a token offering (called an Initial Coin Offering, or ICO), the sale of which will help the company further develop its product.
What does this mean for you? I've asked Oved a few questions to help clear the way.
Wilde: What are the biggest opportunities in blockchain technology?
Oved: Blockchain pertains to the peer-to-peer transfer of value, and the opportunities are only beginning to reveal their endless potential. The first 'killer app' of this technology is demonstrated through tokens. Tokens are the first scalable application-- storing a scarce resource onto a global network.
Many, if not all, industries will be revolutionized through blockchain technology and smart contracts, as they promise the decentralized storage and transfer of value without the need for a trusted third party. For example, finance, accounting, and the law will become more advanced and automated forms of their current selves.
For this technology to proliferate, the methods of exchange will need to become more advanced and suitable for blockchain.
What are tokens and why are they successful?
Tokens are a way for users to hold value and are a new way for projects and businesses to fund and sell their software. Tokens are primarily used to govern an open-source protocol and are the currency which governs an economic system, enforced by computer science.
Tokens have been tremendously successful because of the globally accessible and frictionless nature of their design. They are the first truly global asset class that anyone can use, and AirSwap enables an accessible exchange system, and is helping individuals, who wouldn't otherwise be able to, access a token trading marketplace.
Is the ICO market in a bubble?
Whether it's a bubble or not, it's tough to know. Currently, there are only 5,000-20,000 people participating in each of these token launches, which is an incredibly small portion of the population.
Because of the low friction in the blockchain, it is possible for every person on earth with access to the internet and ether in their digital wallet to participate. Imagine once this hits 100,000 people? 1,000,000 people?
In my opinion, we are only in the beginning stages of the crypto wave.
What are the greatest challenges you face?
When asked this question, I tell entrepreneurs that in order to complete a successful token launch, you must iron out the following three areas:
If you can identify and hire the right people to navigate the new industry you will have a path to a successful launch.
Which one is the hardest? Tech, marketing and legal each have their own challenges when it comes to blockchain, I don't think one is easier or harder than another, they are equally important.