Crypto Rev Series Q318 — beyond market dynamics
By: M. Bysala
Tags: Revolution, Cryptocurrency, Blockchain, Cryptography, English

Rev stands for Review, and Revolution

Mainstream naturally gaining technical knowledge

While many mostly focus on the adoption and prices of the blockchain ecosystem applications, we lose sight of yet another side effect of this crypto revolution/era: a path to improved ways of doing things. Those new ways were possible for a long time, but the path was missing. Most cryptography technologies existed before the blockchain arrival, but many daily procedures were not leveraging them, mostly due to the level of technical sophistication required for the average person. So far at least. As mainstream gets involved in the attractive blockchain world, one way or another, awareness of the digital possibilities is accelerating at a fast pace (regardless of the market trends). The next sophistication will be another standard.

Cryptographic signatures

Soon, everyone will know what public and private keys are. While it seems no big deal, this is actually one of those details that we tend to forget, as to how mainstream incorporate new concepts in the first place, that is, without official education in schools or common studies. This is a brute acceleration of knowledge injected in the wild, and that opens the doors to so many new ways of possibly doing things more efficiently. Let’s get a bit more concrete.

Physical individual signatures are so imperfect. They can easily be copied, falsified, or removed. Blockchain didn’t invent cryptography. A more efficient system of signatures could have technically been in place for a long time. The immature process combined with lack of awareness made it out of the question, thus far. What blockchain does, however, is filling the gap between a technical process and user application. Digital (crypto) signatures are not far down the road. As an example, today many funds are cryptographically signing their digital wallets for audit purpose, and all this within the regulatory framework. Even auditors that were not necessarily tech-savvy, understand now why it makes sense to accept such procedure. See an actual output here from Cohen & Co as an example.

Make no mistakes, I am not talking about the digital signature draws here, which can be easily falsified or reproduced. Well, at least they have the merit to be more convenient, so it is one step better than typical signatures. However, I am confident less than 10 years from now, we will be using cryptographic signatures for most of our paperwork (assuming the corresponding identity layer is mature enough by that time). We might not call it cryptographic signatures, we may not see the complex strings of characters similar to Bitcoin addresses, but it will likely be used as an underlying protocol. It makes sense, and Blockchain is getting us there much faster than we think.

Voting system

In the same manner that of signatures, we all know voting could be improved significantly. I’m going to leave off the part of all the current flaws which are obvious and known for the most part, and just mention what blockchain brings on the table.

Transparency and convenience are the key missing attributes of the current system. Blockchain solves those issues via:

The ability to vote from anywhere on a phone or computer

A public ledger accessible to everyone, and absolutely immutable

However, the lack of a mature 2nd layer identity remains a gap in the realization of a fully transparent and honest voting process.

Digital secure identity and access

An identity layer would serve as a sort of attestation that a specific network public address (let’s call this a digital account) belongs to a unique physical person. It would unsure as well that only one digital account per physical person can contribute to a particular voting/election. Basically, the identity layer would be a true end to end bridge to reflect our physical identity into a digital identity, so that typical public functions can be performed online.

Without going into greater details, it’s worth mentioning several projects working on such identity layers;

One of the early projects to tackle the challenge of identity on blockchain (specifically Ethereum) was uPort, by ConsenSys, consisting of “ identity and messaging protocols that together form an interoperable identity layer for the decentralized web.” The process has been slower than expected (this effort started in 2016), that being said an identity wallet (unofficial) is now available for download in the mobile stores. It is however too early to tell if these developments will be sufficient for the main scale functions as mentioned above — probably not, since technologies evolve with waves of improvement until they become robust enough for the mainstream.

Another small but notable effort comes from the Byteball project, via decentralized bots that are able to provide attestations of identity (KYC) and others that are not in the scope of this topic. It is worth keeping an eye on this one.

A more globally innovative development is in steady progress by Iampass, this one utilizing the IOTA underlying protocol. If we, as humans, could become our own password for everything, this one has the potential to truly revolutionize our daily life. Their mission is simply “become your own password”… via “Reliable biometric authentication based on palm vein pattern recognition combined with decentralized trust on IOTA”. Strongly recommended to just follow on Twitter. Before closing on this one, I will add the basic question for you: why do we need a blockchain for this? How does it help at all?

Well, if and when you can use your palm vein information to identify on every app, you probably don’t want the app to have your palm vein information. And if we assume that several actors would take on the role to store the info, independently of the daily apps, You wouldn’t want a third party to own this either. We saw what happened with social security numbers being hacked, and we generally want to improve our security and privacy, not step back.

IOTA will serve as an infrastructure that no one owns and that is trustless. On top of that, Zero-Knowledge protocol will be used for the sensible information, which means no one can have access to it, no one will even know that your information is somewhere there to begin with, unless you choose so. More specifically, “zero-knowledge proofs let you validate the truth of something without revealing how you know that truth or sharing the content of this truth with the verifier. This principle is based on an algorithm that takes some data as input and returns either ‘true’ or ‘false’.” Related note: for the more technical folks, I just came across iden3: new SNARK tools for an identity system from Jordi Baylina.

Companies

Decentralized organizations are another interesting development. What if we could forget the painful paperwork, and simply create a complex structure (with shareholders, specific voting mechanism, specific permissions/rights, and other) in a few steps online, from your Ethereum public address or another such account?

Aragon is one of the best promises I have seen in this regard. “Aragon Network will be the first community governed decentralized organization whose goal is to act as a digital jurisdiction, an online decentralized court system that isn’t bound by traditional artificial barriers such as national jurisdictions or the borders of a single country”.

Simply put, this is yet another area of possible world disruption that DLTs could enable, this time at the organizational level, aiming for borderless and fully digital organizations, a new type of jurisdiction that comes with simplified yet customizable and international properties.

Going public made easy — I met recently a successful entrepreneur, who was on the verge of eventually going public the traditional way. He shared with me some of his obstacles about this, and his conclusion was a no-go for now. Going public is a tough process, requires that you concede much of your shares in the company and that you devote an unquantified amount of time. Well, anything painful today is another potential use case of a DLT application. Something like Polymath enables a company to create a security token with full regulation and control. As mentioned on their website, some of the advantages of such a procedure are:

Programmable equity (issuance), and creation of security in minutes

24/7 access to markets

Elimination of middlemen (and therefore less paperwork (read zero), less time consuming)

Access to a new audience (unbanked, and raising in cryptocurrency)

Conclusion

So here again, we briefly touched on the notion that the blockchain infrastructure, when used properly or in conjunction with subsequent layers, can transform, for the better, the very foundation of our traditional procedures, via strong value properties that are inherently part of the future infrastructure. This effectively removes the need for us, humans, to constantly solve problems growing from our own natural imperfect behavior.

Above post contained just a few examples of DLTs applied use cases. I wrote a separate add-on for the ones looking to use and test some applications today.

As always, I remain open to fair modifications and suggestions. Please remember that the scope to cover is so wide, that this should be considered nothing more than a thin extract of the world forming as we speak.

I leave you with a piece of speculation, not price wise, but about usage. Cheers.