Bitcoin 2.0: Decentralized Asset Transfer
Bitcoin 2.0 relates to the non-currency use cases of the Bitcoin blockchain as a distributed ledger for tracking ownership of various other assets. These have been coined as native applications or use cases that would not be possible without Bitcoin technology. These are the 0 to 1’s that will completely disrupt a number of verticals over the next coming years.
The first stage of Bitcoin was about transferring currency from A to B without C. Doing things that we already know how to do as far as transferring money or buying things but in a more efficient and effective way in terms of speed and reach because of the blockchain. The next stage is the non-currency use cases. The abstractions that provide services that would not be possible without Bitcoin and blockchain technology. Another way to think about it is building the use cases for non-monetary transactions. Moving any amount of value on an open ledger between things connected to the internet. In this sense Bitcoin 2.0 is not a BIP or a newer version of the protocol, but instead a namespace for the new use cases that will be be built on top of and embedded into the blockchain.
It turns money as we know it into bits of data on a decentralized ledger that operate as token of allowances based upon the timestamps and parameters set by the parties involved. These smart contracts can allocate digital resources such as bandwidth, storage, computation, and private keys between people and things connected to the internet. The parameters of the contract are set in code using if-then statements which predetermine what value producing assets are aware and what terms are at hand. This can enable a whole new set of IoT micrometering and communication by passing the data through mesh networks like Zigbee. This is being recognized at the enterprise level by IBM in the form of its premium solutions partner Adept. They are building open source software that allows devices to communicate and then authenticate instructions based on real-time data that is being pulled from the blockchain.
The abstractions that use blockchain technology will remove friction in various processes by removing the middlemen necessary in current models. Combined with multisig and additional opt-in signatures to attach identity, these types of contracts will be completely transparent and automated. The hard part is conceptualizing these 2.0 abstractions and developing the various models using blockchain tools like Chain. This technology brings everyone and everything on the entire planet to the same financial grid.
How do we increase the volume the transaction capacity of the blockchain but compress entire size of the blockchain?
How do we incentivize people to run a full bitcoin node? Or how do we increase the number of bitcoin nodes?
What is the transaction equivalent in frequency, speed, and scale of tweets and likes?