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What Are All These Blockchains And Crypto Assets Building?

Forbes logo Forbes 08/10/2017 Laura Shin, Forbes Staff

Clockwise from top left, Naval Ravikant, Meltem Demirors, Brian Armstrong and Jalak Jobanputra © Provided by Forbes Media LLC Clockwise from top left, Naval Ravikant, Meltem Demirors, Brian Armstrong and Jalak Jobanputra

Clockwise from top left, Naval Ravikant, Meltem Demirors, Brian Armstrong and Jalak Jobanputra

 

A $140 billion total crypto market cap. Goldman Sachs considering trading Bitcoin. Celebs launching tokens. Fidelity mining cryptocurrencies. Even North Korea mining them. Crypto is a silly circus with serious consequences. But amid the hoopla about prices and bubbles and celebs, a group of technologists, investors, lawyers, entrepreneurs and dreamers are working on bringing about societal revolutions through blockchains. They’re all convinced it will transform our lives — but how? Twenty-five crypto luminaries shared their thoughts via email. They are reprinted here lightly edited.

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Kathryn Haun, board member, Coinbase © Provided by Forbes Media LLC Kathryn Haun, board member, Coinbase

Kathryn Haun, ex-federal prosecutor & digital currency coordinator, U.S. Department of Justice; Coinbaseboard member

What cell phones did to pay phones, cryptocurrencies will do to ATMs and bank branches. As cryptocurrencies scale, people will use them for payments because of lower fees, less friction, and greater privacy.

Financial institutions that have historically provided trust will no longer be necessary to complete many transactions. This is already happening where people have no access to traditional financial institutions. At the same time, blockchains and decentralized networks promise greater security and accountability. One day identity and other records that can now be easily stolen will be put on distributed ledgers. It’s now cheaper and faster to Fed Ex a box of cash than to send an international wire. Cryptocurrencies are poised to change that calculus.
Erik Voorhees, CEO of Shapeshift © Provided by Forbes Media LLC Erik Voorhees, CEO of Shapeshift

Erik Voorhees, CEO of Shapeshift

The original blockchain application, cryptocurrency (such as Bitcoin), remains the most exciting and consequential. Cryptocurrencies will outcompete and displace government currencies. Centrally planned national monies will fade away, perhaps slowly like castles or all at once like slavery.

Cryptocurrency moves anywhere, instantly, at near-zero cost, and natively digital money will become fundamental to a digital, borderless internet-based society.

Governments will lose the ability to conjure money out of thin air. Budgets will derive purely from taxation and borrowing. Inflation will disappear. Prices will no longer rise each year. Bread will be no more expensive to a son than a father. Humans will again build upon an honest, market-based financial system, having escaped fiat currency debasement, the most egregious financial scam of all time.

Jamie Smith, global chief communications officer at Bitfury © Provided by Forbes Media LLC Jamie Smith, global chief communications officer at Bitfury

Jamie Smith, global chief communications officer of Bitfury and CEO of the Global Blockchain Business Council

Thanks to blockchain technology we will begin to live in the world we deserve, where governments work better for the people.

A world where our contracts cannot be altered, where the electronic transfer of our records and the tracking of our goods are fast, inexpensive and simple. A world where cybersecurity is not just a hope – but a reality. And most importantly, thanks to blockchain technology, we will be able to vote wherever we want, whenever we want, from the palm of our hands from our phones – and our voices, will be counted.
Naval Ravikant, CEO of AngelList, venture partner of MetaStable Capital © Provided by Forbes Media LLC Naval Ravikant, CEO of AngelList, venture partner of MetaStable Capital

Naval Ravikant, cofounder of AngelList, partner at MetaStable Capital

Humans are the winning species because we network — nations, corporations, and money are networks. Networks are governed by leaders, elites, corporations, or crowds. Power makes them kings, aristocracies, monopolies, and mobs.

Blockchains allow the people to operate the network, merit based. The people govern, provide resources, get paid in coins. They create electronic gold, currency, financial contracts, without rulers. Internet protocols to allocate bandwidth, computing, and storage. Self-organizing markets for power, water, Internet, and autonomous cars. Social networks and digital matchmakers without tech monopolies. Bulletproof electronic ballot boxes.

Wherever a ruler is exploiting a digital network, blockchains will disrupt.

Elizabeth Stark, CEO & cofounder of Lightning Labs © Provided by Forbes Media LLC Elizabeth Stark, CEO & cofounder of Lightning Labs

Elizabeth Stark, CEO & cofounder of Lightning Labs

It’s easy to send someone a photo or animated gif, but why can’t you embed value in an app? In the future waiting three days to Venmo someone funds or using a paper check will feel like ancient history. You’ll send and receive money across devices and within various applications instantly.

You’ll be able to set specific conditions, such as paying your favorite band 5 cents every time you listen to their song, automatically, on any device. And you’ll be able to interact with machines that pay other machines, like a self-driving car paying to charge itself or replace a part.
Brian Armstrong, cofounder and CEO of Coinbase © Provided by Forbes Media LLC Brian Armstrong, cofounder and CEO of Coinbase

Brian Armstrong, Coinbase cofounder and CEO

People will earn income in digital currency via activities online, such as upvotes on Reddit, likes on YouTube, or answering questions on Quora.

In the developing world, people will control more of their wealth in digital money and earn/spend it their mobile phones, connecting to the global economy. The developed world will hold it as an investment but increasingly use it for money on the internet as more blockchain-based apps are developed. In three to five years, a growing body of people will earn most of all of their income online in crypto, and this will bleed into the physical world — meaning they’ll want to go 100% crypto, prompting merchants in brick and mortar to cater to them.
Balaji Srinivasan, 21.co CEO (Steve Jennings/Getty Images for TechCrunch) © Provided by Forbes Media LLC Balaji Srinivasan, 21.co CEO (Steve Jennings/Getty Images for TechCrunch)

Balaji Srinivasan, 21.co CEO

The internet meant programmable information; blockchains mean programmable scarcity. The internet unified previously disparate forms of information (photos, music, movies, maps, books, news, telephony, mail).

It added informational aspects to things we didn’t think were informational in 1990 (your followers, likes, and steps). Information became ubiquitous, and everything became searchable, sortable, and social. In the same way, blockchains will unify previously disparate forms of scarcity (cash, currencies, commodities, stocks, bonds) and add financial aspects to things we previously didn’t think of as financial. You’ll get a spot price for the cost of storing 1MB on 1,000 remote hard drives, or the cost of one minute of time from 10,000 JavaScript programmers worldwide. Everything will become fairly priced, consensually transactional snd freely tradable.
Fred Ehrsam, cofounder of Coinbase © Provided by Forbes Media LLC Fred Ehrsam, cofounder of Coinbase

Fred Ehrsam, cofounder of Coinbase

There are hundreds of specialized AI clones of you. A few write emails for you, some attend meetings as you, and others decides what clothes to order for you. To spin a new clone up, just feed its smart contract with digital currency and watch it buy all the resources it needs to accomplish your tasks.

Joey Krug, cofounder of Augur and co-chief investment officer of Pantera Capital © Provided by Forbes Media LLC Joey Krug, cofounder of Augur and co-chief investment officer of Pantera Capital

Joey Krug, cofounder of Augur and co-chief investment officer of Pantera Capital

Apps and services serving as centralized middlemen in two-sided marketplaces will no longer be operated by traditional companies. Instead, they’ll be operated by peer-to-peer networks that effectively serve as coops.

Why pay Airbnb, Mechanical Turk, Betfair, etc., 10-30% in fees when you can use a P2P application charging the bare minimum (around 1%) in fees? Blockchain technology enables cost savings, more efficient markets (and thus economies as a whole), and limits the role of middleman and counterparty risk. Users will benefit from cheaper fees for goods and services but not know it’s powered by blockchain tech. Companies like Apple will survive, but rent-seeking platforms milking users for fees, watch out, software is coming for you!
Jalak Jobanputra, founder of Future Perfect Ventures © Provided by Forbes Media LLC Jalak Jobanputra, founder of Future Perfect Ventures

Jalak Jobanputra, founder of Future Perfect Ventures

All seven billion people have digital identities they control. Data we now hand over to banks, Facebook and insurance companies will reside in secure vaults and we’ll mete pieces of it out. Data will become currency. We’ll transact with disparate data – akin to a “digital barter” system.

Your medical history, medications, and surgeries will be discrete pieces of data on a blockchain. You’ll authenticate and send data to, say, a doctor, a research study, or a relative without fears of being hacked. You’ll create an immutable record of your home’s data on a blockchain – repairs, chain of ownership, history of electricity – for potential buyers, enabling you to better negotiate a sale. Blockchains will give rise to billions of efficient micro-marketplaces. We will securitize our tangible and intangible assets and move on to a world of radical transparency and opportunity: Capitalism 2.0.
Jake Brukhman, managing partner of CoinFund © Provided by Forbes Media LLC Jake Brukhman, managing partner of CoinFund

Jake Brukhman, managing partner of CoinFund

Over the last 20 years companies like Google, Facebook and Amazon have connected people globally and set humanity up for exponential growth. But the downsides of this efficiency are data silos, monopolization and proprietary control of networks by private interests.

Decentralization technology is returning ownership over data and value creation back to individuals. It prepares us for a future where our technology providers are not private companies. They are services that live on the internet, give users self-sovereignty over their data, fairly compensate content creators for their efforts, are agnostic of the content that flows through them, community-owned and governed, and built exclusively for users.
Sandra Ro, former head of digitization at CME © Provided by Forbes Media LLC Sandra Ro, former head of digitization at CME

Sandra Ro, former head of digitization at CME

Blockchains create a world where organizations and corporations are decentralized to enable a transparent and fairer society. Blockchain challenges the notion of ownership and control by a few institutions.

Individual power to control personal data and wealth will increase, while government influence will diminish. Coupled with internet and smart phones, blockchain infrastructure will enable greater democratization of financial access as well as increase efficiencies across many industries. Individuals will decide what has value. The most significant positive impact will be felt by those most vulnerable, excluded, and forgotten today.
William Mougayar, investor/advisor and author, The Business Blockchain © Provided by Forbes Media LLC William Mougayar, investor/advisor and author, The Business Blockchain

William Mougayar, investor/advisor and author, The Business Blockchain

Banks will no longer be our primary financial destinations. Earning cryptocurrency will be the smart way of earning money via a novel variety of work that might be as passive as sharing our data, brain cycles, time or influence.

Every asset will be on the blockchain, allowing anyone from Afghanistan to Zimbabwe to create their own wealth in a world where nation-state jurisdictions are a thing of the past, upended by blockchain-governed and autonomously-run decentralized institutions. As you watch the future of money, work, society, software, government, and business, you will unearth a common fiber: the blockchain, that blockbuster mega-trend for the next quarter century.
Kathleen Breitman, cofounder of Tezos © Provided by Forbes Media LLC Kathleen Breitman, cofounder of Tezos

Kathleen Breitman, Tezos cofounder

Decentralized blockchains enable global coordination. Parties around the world enter into agreements which can be arbitrated and enforced at very low cost. When trade barriers open, globalization lifts billions out of poverty.Cryptographic ledgers open new barriers by lowering coordination costs, ushering in an era of prosperity.

Chris Burniske, partner at Placeholder Capital © Provided by Forbes Media LLC Chris Burniske, partner at Placeholder Capital

Chris Burniske, partner at Placeholder Capital

The native business model of the most successful Web companies involves harvesting data from users, and then charging others for access to that data, or providing a proprietary service based on that proprietary data.

Cryptoassets and their underlying protocols, on the other hand, create shared data layers from which all users can contribute, access, and benefit. Standardization upon an open data layer will collapse the cost of innovation, opening up an entirely new set of markets and services, which will empower the end user and neuter the business models of existing tech incumbents like Google and Facebook. It is the innovator’s dilemma come to today’s tech titans.
Joe Lubin, cofounder of Ethereum, founder of ConsenSys © Provided by Forbes Media LLC Joe Lubin, cofounder of Ethereum, founder of ConsenSys

Joe Lubin, cofounder of Ethereum, founder of ConsenSys

The core value proposition of Ethereum’s decentralized application platform is, along with complementary decentralizing technologies (e.g. for storage, bandwidth and high throughput computation), to create a new substrate for next-generation economic, social and political systems.

Financial, governance, and other systems are being redesigned according to the principle of decentralization.

One such system is identity. Currently, over two billion people do not have access to a government-issued identity. Those of us that do are at the mercy of identity providers who control and use our information for their profit and power. But Ethereum allows for identities that individuals control. For the first time in history, we can have a global, democratized identity system.

Meltem Demirors, Digital Currency Group's director of development © Provided by Forbes Media LLC Meltem Demirors, Digital Currency Group's director of development

Meltem Demirors, Digital Currency Group’s director of development

Digital currencies represent sociotechnical systems – values and principles expressed in code, in the way the blockchain protocol is designed.

This provides humanity an opportunity to create a new economic, political, and social systems – systems that are more transparent, more resilient, and more empowering to the individual. For centuries, our identity has been defined by our affiliation with a nation state, and our existence by the rules of that nation state. This technology will usher in new models for economies and marketplaces, governance, identity, and more. While we’re still in the very early stages, each experiment teaches us something new and valuable about the social, behavioral, and technical design criteria for these new systems.
Will Warren, cofounder and CEO of 0x © Provided by Forbes Media LLC Will Warren, cofounder and CEO of 0x

Will Warren, cofounder and CEO of 0x

We are observing the early stages of a technological renaissance. Today, blockchains are rewiring the global financial system to be more efficient, open and resistant to government intermediation.

In the future, blockchains will fundamentally change the way humans organize, govern and identify themselves. By giving individuals the ability to opt-out of any particular economic system that they might have inherited, power will shift from the state to the governed. The geopolitical consequences will be jarring.
Demian Brener, cofounder and CEO of Zeppelin Solutions © Provided by Forbes Media LLC Demian Brener, cofounder and CEO of Zeppelin Solutions

Demian Brener, cofounder and CEO of Zeppelin Solutions

Blockchains have laid the foundation for a new, open and global economy. Unlike current economies and networks owned and managed by centralized authorities, this new economy is built on a set of open protocols and standards.

Businesses and individuals will make use of these protocols — based on crypto assets — to buy and sell digital commodities in global markets (e.g. storage, processing power). Furthermore, these crypto assets will act as a mechanism for groups to more effectively coordinate and earn from the value they co-create around shared goals. What the internet did to communications, blockchains will do to economic interactions.
Primavera De Filippi, research fellow at Harvard's Berkman Center for Internet & Society © Provided by Forbes Media LLC Primavera De Filippi, research fellow at Harvard's Berkman Center for Internet & Society

Primavera De Filippi, researcher at CERSA/CNRS and faculty associate at Berkman-Klein Center/Harvard

As a new platform for distributed collaboration, blockchain technology can help society move from the paradigm of competition to that of cooperation.

Most organizations today are defined by strict organizational boundaries, incorporating a variety of functions that already exist elsewhere — for instance, finance, marketing, IT, etc. In the near future, new organizational structures may emerge, consisting of a network of functional elements interacting with one another in an open and distributed way. Instead of competing at the level of the organization, competition can be done at the edges, at the level of the functional elements focusing, almost exclusively, on their core competencies.
Brian Lio, CEO of Smith + Crown © Provided by Forbes Media LLC Brian Lio, CEO of Smith + Crown

Brian Lio, founder and CEO of Smith + Crown

As we begin to realize the potential of blockchain technology, the first effects will be behind the scenes.

They will manifest themselves primarilyas additional options to control the services and systems that are already part of our lives:secure, frictionless and private payments; control and management of our digitalidentitiesand reputations; a staggering array of new financial products; powerful tools for creating, managing and governing organizations of every size and type.One experience,service and app at a time, we’ll gain the ability to control our information and money, secure our actions, and organize ourselves in ways that have never before been possible.
Adam Ludwin, cofounder and CEO of Chain © Provided by Forbes Media LLC Adam Ludwin, cofounder and CEO of Chain

Adam Ludwin, cofounder and CEO of Chain

Cryptocurrencies enable decentralized, peer-to-peer versions of services that have previously required a central party, like payments (Bitcoin vs. Visa), file storage (Filecoin vs. Dropbox), and computing (Ethereum vs. AWS).

These decentralized models sacrifice the benefits of centralization – namely scalability, efficiency, and simplicity – but provide users with censorship resistance. This is only a good trade-off for a small number of people today, but that could change if the technology, or the world around us, evolve in unexpected ways.
Joseph Poon, coauthor of the Lightning Network and Plasma © Provided by Forbes Media LLC Joseph Poon, coauthor of the Lightning Network and Plasma

Joseph Poon, coauthor of the Lightning Network and Plasma

Humanity has always entrusted authorities to build companies and civilizations, else life is “nasty, brutish, and short.” In the interest of building good works, we needed accountability of authority — hence open Social Contracts in all aspects of society.

The blockchain is about resolving the social contract dialectic away from the Principal-Agent Problem by making all principals be able to efficiently and economically also be agents. Though the blockchain will produce problems as well, I worry that a counterfactual future without the blockchain could be incredibly dark. I hope blockchains will enable humanity to be collectively more giving, loving, and actualized.
Zooko Wilcox, founder and CEO of Zcash © Provided by Forbes Media LLC Zooko Wilcox, founder and CEO of Zcash

Zooko Wilcox, founder and CEO of Zcash

When historians look back on this time, they will talk about the networks being built today as the foundations of the resulting global economic evolution. The peace and prosperity gained from breaking down the barriers to economic inclusion will open up infinite opportunities.

Already, these new financial tools offer individuals and businesses around the world the ability to interact seamlessly across borders, resisting censorship and introducing new markets. From the family in Venezuela devastated by the country’s hyperinflation policies to New Hampshire’s Bardo Farm serving their community with sustainable meat and vegetables, cryptocurrency is an idea who time has come.

Update October 5, 2017, 5:48pm EST: This article initially misstated the title of Naval Ravikant. He is the cofounder but no longer the CEO of AngelList.

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