The Power of The Blockchain: Future Developments and Applications

Talent hits a target others can’t hit, Genius hits a target others can’t see. – Arthur Schopenhauer

The sentiment surrounding Bitcoin has transformed. It has gone from being known as the anonymous payment mechanism to facilitate illegal transactions, to a speculative digital bubble with no intrinsic value, to what industry leaders are now calling the greatest and most disruptive technological breakthrough since the Internet.

The paradigm has shifted, entrepreneurs and world-class venture capitalist firms are teaming up to improve the efficiency and effectiveness of this new payment ecosystem through:

  • online exchanges
  • single-signature wallets
  • multi-signature wallets
  • merchant integration services
  • B2B enterprise solutions
  • mobile user applications

So far, what has been built is a secure and effective means to “pay” someone else without the need for a third party. It is simply a global transfer of ownership mechanism using a mathematically distributed digital asset that is growing in scarcity because of an increase in the awareness of its namespace and purposiveness. It is a decentralized peer-2-peer transfer of ownership protocol using a consensus timestamping mechanism, and ultimately, it works.

The underlying technology that facilitates the transfer of Bitcoins, the blockchain, the namespace not in the headlines, is what will transform almost every domestic and international vertical market. The blockchain is intrinsically powerful in that it is the backbone of this new type of open source, verifiable, distributed mechanism of transfer and record. It is the “third-party” that is needed in so many of our modern trust base models for various goods and services. It is the “universal balance sheet” used to record and verify the most recent state of various digital ownerships.

The blockchain is the foundation for so much more than just a payment network the same way the internet is the foundation for so much more than just e-mail. If the blockchain is what’s important, then “Bitcoin” is simply the global onloading mechanism. It is the first tier, an introduction to a new age of what is possible through decentralized networking and computing.

Tier 1: A Decentralized Digital Currency and Payment Network

  • Why is Bitcoin being developed in the form of multiple online exchanges and wallets based on geographical location and currency?
  • What if there was one was global exchange that allowed anyone to buy and sell any form of digital or physical asset regardless of location in world?
  • How could a global asset exchange such as this increase the security, transparency, and efficiency of global finance and trade?

Tier 2: Decentralized Networks and Development Platforms

  • Why are digital currencies the only things being built up on top of this blockchain technology?
  • What if anything that could logically be expressed in code could be implemented on a blockchain?
  • How could this type of network and platform be adopted by the global economy?

This concept has the namespace of Ethereum, Eris (on Ethereum), Colored Coins, “Smart Contracts”, Bitcoin 2.0, and “side-chains”.

The crux of this whole phenomenon is that “Bitcoin” is a currency application to the blockchain.

Ethereum wants to make it so ANY type of deal, organization, service, or system, can be decentralized. It just requires the parties involved to set the parameters expressed in code. So what will be built on top of the Ethereum network for consensus verification?

Third-party Trust Models

  • Real Estate escrow between parties can be implemented using multi signature contracts.
  • Insurance Policies can be engrained in the blockchain.

Digital Commodity Pricing

  • Commodities pegged at consensus-aggregated value

Weather Based Contracts

  • Contract premiums based on season conditions.
  • A Farmer makes an insurance agreement based upon rainfall data.

File and Data Storage

  • Proof of Existence on Bitcoin Blockchain
  • Dropbox / Box type cloud storage
  • Enterprise storage, buy space from others on the network

Smart Contracts and Escrow

  • Hedging accountability
  • No option of default

Signatures

  • Docusign
  • Multisignature to set proportional abilities on access to assets given certain number of keys

Private Keys to Share Economy Assets

  • Home and Apartment Leases
  • Home and Apartment Keys
  • Hotel Keys

-Airbnb

  • Car and Ride Leases
  • Car and Ride Keys
  • Autonomous Vehicles
  • Safety Deposit Box Keys
  • Package Delivery Key

Permits to Controlled Assets

  • Guns
  • Prescriptions
  • Timestamped verifiable access

Audit and Financial Services

  • Taxes
  • Returns

Gambling and Betting

  • Proof of a Bet
  • Undisbutable

APIs with Global Mobile Banking

  • MPesa
  • WeChat
  • Alipay

Non-Disclosure Agreements

  • Timestamped Verification

Patents, Copyrights, and Trademarks

  • Timestamped Intellectual Property Rights

Payment Processors

DAOs (Decentralized Autonomous Organizations)

  • An organization run and bound by code.

Domain Names

  • Namecoin
    • First to exist
    • ICANN Replacement

Governance

  • Opt-In
  • Laws consensus driven

Voting Systems and Records

Reputation Systems 

Online Identification Systems and Records

Medical Records

Incentivized Truth Consensus Crowdsourcing

  • Range of n inputs for a sought after accurate condition or state of n, correct answers is rewarded x

What is actually enabling individuals to trade any amount of Bitcoin regardless of their location in the world is … “mining”. 
The cryptographic time-stamping mechanism that replaces centralized authority with community consensus. The blockchain needs miners to survive. It needs nodes to verify valid blocks with valid transactions. But what if the mining becomes centralized thus, Bitcoin becomes centralized? It is now self-evident to anyone who has been following the development of this cryptocurrency that the “mining” and “the blockchain” is what really matters.

The incentivized mining mechanism is what should make this ecosystem thrive, not the companies building a new type of wallet or security feature. 
 User adoption isn’t people buying up, holding and dumping after a price increase, it’s about people mining, becoming another node therefore increasing the security and transaction volume capacity of the network. It’s them realizing they can be part of a truly empowering decentralized global network. The network effect is what makes this technology powerful, its functionality as a type of distributed consensus technology increases overtime.

So the Bitcoin blockchain is being “mined” for a currency because it’s catching on, people are starting to accept it, online and offline. There is incentive.For all of these other future blockchain applications to work, you need people to mine “ether” from the Ethereum blockchain. I don’t know if I will be able to spend “ether” anytime around the corner but the important thing is that if given the right incentives, a blockchain has the potential to become very powerful.

Create incentive for people to decentralize a type of process:

Bitcoin

Create a platform that allows people to decentralize any type of process:

Ethereum

Additional Reading on this:

http://www.wired.com/2014/03/decentralized-applications-built-bitcoin-great-except-whos-responsible-outcomes/

http://www.telegraph.co.uk/technology/news/10881213/The-coming-digital-anarchy.html

http://diginomica.com/2014/06/16/internets-disruptive-hold-tight-blockchain/

Bitcoin Exchanges, Wallets, and Links

The Bitcoin White Paper by Satoshi Nakamoto – This is the original white paper outlining the peer-to-peer electronic cash system.

The Ethereum White Paper by Vitalik Buterin

Bitcoin Exchanges

Wallets

News Sources

Mining Pools

Mining Hardware and Tutorials

Future

Data and Analysis

How to Setup an Antminer S1Bitcoin Miner

The Antminer S1 is an ASIC miner that hashes at 180-200 GH/S. It comes with a excellent user interface setup page that is accessible by your web browser. In this tutorial, I will explain how to setup your Antminer S1 with the required hardware, get to the miner’s setup page, and lastly configure the miner to your pool(s).

Required Hardware:

Setup

1) Unbox the Antminer S1, it will come in plastic non-static sheet.

2) Connect the two  6 PSI-e power cords from the corsair to the Antminer S1 power inputs. Some green LEDs will come on and the fan will begin.

3) Connect an ethernet cord from your router to the Antminer S1. Make sure the router’s range is between 192.168.1.1 – 192.168.1.254

Configuration

1) There should be a white label on the side of your miner with an IP address on it. Once you have powered on the miner and connected it to the router, type in the IP address on the label in your browser. Make sure your computer is connected to the WiFi from your router.

2) You should be directed to the Antminer’s page and you will be directed to log in using Admin: root and Password : root

3) Once you are in the setup interface, there are a few things you need to do.

4) First go to mining configuration page and change the pool settings for your Antminer S1. The Antminer comes with three pools addresses. Type in the URL for your pool, your worker name, and worker password. You can also use Multipool, which will switch between coins to always mine the most profitable coin. This is a lot more useful for Scrypt mining because  the most profitable coin switches a lot more compared to SHA- 256 coins where Bitcoin usually is the most profitable.

5) After your type in your pool’s URL and port, your worker name, and worker password, hit Save and Apply. The miner will make a few sounds and then start hashing. It will take it a little bit to get up to 180 GH/S.

The machines are very efficient and easy to setup Bitcoin Miners. After configured you do not need to run a mining proxy on a separate computer. The miner just needs to be connected to the router via ethernet or wifi, and of course connected to the corsair 500 watt power supply. Given the current difficulty, hashrate, and price of Bitcoin this miner produces roughly .01 BTC / $6.50 per day. This payout will happen over a longer period of time (every two days, every three days) as the difficulty goes up however the price can also go up to compensate for the inevitable loss of contribution in comparison the the network as a whole.  It would be awesome to have a farm or warehouse full of them powered by solar energy. A lot of big scale Bitcoin mining operations use Antminer S1’s to run thousands of gigahashes per second.

If you have any questions on how to setup the Antminer S1, feel free to send them using the form below.

Bitcoin Tip Page

 

The Top 5 Bitcoin Analogies

1) Bitcoin is the lightbulb, the blockchain is the electrical grid. The lightbulb is the on loading mechanism, but there will be many more applications built on the grid.

2) Explaining Bitcoin to a bank feels like explaining what Amazon.com is to Barnes and Nobles and what Netflix is to Blockbuster.

3) 21 million coins for 5 billion people connected to the internet, this is a relatively scarce amount for a transfer of ownership. Imagine if there were only 21 million paper checks in the world, how much would one check be worth?

4) Is the Internet like e-mail, TV, or communication network; is Bitcoin a like a stock, a currency, a commodity, or a payment network? the answer to both is all of the above.

5) Bitcoin is just the first application and first namespace for a transfer of ownership over the blockchain protocol. The transfer of any digital scarce asset will be possible with this technology. “Bitcoin is many layers of an onion. Peel back one layer, and a new and amazing layer awaits underneath to discover.”

 

The Mobile Raspberry Pi Mining Proxy for an ASIC MINER Block Erupter Cube

So this past week my computer hard drive was overwritten when I was trying to write a Raspian Image to a SD card, unfortunately. A lot of my programs are gone but some of my data is in the process of being recovered. After the initial shock from this, I realized I needed a new way to run the mining proxy for my ASIC Block Erupter Cube. I couldn’t even start my PC, so I turned to my handy 35 dollar Raspberry Pi computer.

After doing some research, I downloaded the proxy on a Rasp Pi, connected it to the wifi network associated with my miner, changed the IP address from my PC to the Rasp pi’s, started the proxy and to my surprise it actually started hashing! I then took the New Trenton portable charger and connected it to the Rasp Pi to make (uh-hum) The Mobile Raspberry Pi Mining Proxy for an ASIC MINER Block Erupter Cube. The cube is averaging around 20 -22 GH/S while running on the Pi. It ran much better on my PC, around 32-38 GH/S. But it is still cool that as long as it is connected to the same WiFi network as the cube it will run the proxy from a mobile pi.