In March of this year, Jeff Bezos, founder of Amazon, unseated Bill Gates for the position of richest man in the world. The feat was the result of a massive $40 billion jump in net worth — the largest ever, according to Forbes.
With Bezos, Zuckerberg and others reaching the uppermost echelon of wealth, it’s easy to forget the days when the dot.com bubble burst, and companies like Amazon were the pariahs of the stock market. The move from the bottom to the top reflects both the fickle public sentiment of investors, and the underlying fundamental value that made Amazon what it is today.
In a similar vein perhaps, the Bitcoin bubble has officially burst. Dropping nearly 80% from its highs at the end of 2017, the first and greatest cryptocurrency has come on tough times.
Fundamentals are key
Nevertheless, the underlying fundamental value that made Bitcoin boom and bust may someday create the next Jeff Bezos. Blockchain technology, the foundation that Bitcoin is built on, has already received substantial accolades in the press.
As a distributed ledger (think of a secure database shared over thousands of different computers), blockchain technology provides unique ways to solve problems that are facing various industries, from banking to logistics. In recent developments, both Facebook and Amazon Web Services are considering blockchain solutions. But perhaps nowhere is the potential for change more clear than in the communications industry.
The very nature of blockchain — secure, distributed information made accessible through private keys — provides a solution to the common speed/security problems facing communications. Below are four ways that blockchain technology will disrupt the way consumers and businesses think about and use communications systems going forward.
One of the first issues with all technology, and particularly with communications, is security. Recent developments in the cybersecurity industry have made this a ubiquitous issue for consumers and corporations alike.
According to Gordon Yilin Lu, the Deputy Chairman of Instanza Inc. and owner of SOMA Messenger, “The telecommunications industry is evolving at the speed of technology. A major concern for the media and communications industry is a responsibility to adapt to the preferences of the community. People worry about their private data being sold by the large social media platforms like Facebook. The future is about privacy and social awareness.”
However, blockchain technology, like that offered by SOMA, provides an elegant solution to this apparently insurmountable problem. By decentralizing data, the technology provides a way for only intended users to access any set of data. And new messaging systems have begun to capitalize on this powerful concept.
Lu continues, “Blockchain technology provides a secure solution to these communication problems faced by large platforms because information is only released with private keys. That’s why SOMA is currently integrating blockchain technology to provide encrypted messaging and a crypto wallet designed to reward users for their engagement, and at the same time protect the privacy and contribution of users.”
TOP Network, a Sunnyvale-based blockchain startup, is building the world’s first decentralized cloud communication network on the blockchain. Individuals and organizations can contribute their idle resources (such as a spare server in a data center) to the network, and receive rewards based on their contribution. The company is creating a transparent sharing economy where all telecom operators and service providers around the world can share resources and serve customers. The consensus mechanism, which is a series of mathematical algorithms accepted by all participants on the blockchain-based networks, can reward participants fairly by measuring their contribution to the network.
By allowing resource and service providers around the world to join the network transparently via blockchain technology, the company is able to build in much wider coverage and higher-quality services at lower prices than any single telecom operator can achieve in the upcoming 5G era. The blockchain-powered sharing economy can decentralize the physical footprint of the network, freeing the company from passing on costly overhead to its users.
Additionally, the security offered by blockchain technology is substantially more robust, and the blockchain startup is looking to build on that foundation.
According to Steve Wei, CEO of TOP Network, “When it comes to data security in the communication sector, blockchain technology can raise the bar higher. On a blockchain-version Facebook, users will be more comfortable posting on their timelines as no centralized organization can control their information. Because the data decentralized in nodes across the entire network, it is virtually impossible for hackers to tamper with data or governments to censor contents.”
Finally, through a decentralized cloud communication network, blockchain technology is able to create seamless integrations between applications. This greatly reduces the complexity of communication.
“For example, an iMessenger user cannot interact with a WhatsApp user directly, but blockchain can break the boundary between different social communication apps. TOP Network, for instance, creates a standard communication protocol to make all the decentralized apps in its ecosystem interoperable. The interoperability realized with blockchain can facilitate Internet of Things, which requires the seamless connection of various apps and devices,” says Steve Wei.
While communications providers and consumers are seeking security and speed, they are also pursuing cost effectiveness. Already a vastly cheaper option that customary telephony, Voice over Internet Protocol, or VoIP, has a genuine future as a decentralized network system.
Current VoIP solutions require a centralized ‘landing point’ which routes the calling party’s signal to a receiving number. Generally, a centralized system requires fees for making those connection (think of a traditional phone operator), even if the system is digitized.
However, blockchain technology removes that centralized access point and replaces it with a distributed network that is shared by all the users on the network. This means that there is never a routing cost, as all routes are already established by the distributed ledger.
Additionally, security is maintained via the distribution, and speed of data transfer is maximized. The TOP Network has just such a solution in place, as do other companies like ENUMER. These networks create viable solutions for companies to have effectively free telecommunications with equal or better security than their traditional counterparts.
Finally, blockchain technology is creating a helpful solution for content delivery networks (or CDNs). Since the internet is really just an interconnected group of servers, for data to travel globally, it must pass through CDNs.
These provide a critical service for information transfer, but also represent an intrinsic cost for data transfer, as well as a weak point of security risk.
Blockchain technology provides a methodology for optimizing unused bandwidth from servers all over the world and links them together into a complex nest of servers which are able to move data seamlessly throughout the world. And, because the data is all distributed and can only be accessed via private keys, such system provides maximal security for users.
A number of companies have already created just such a network, built on blockchain technology, and able to move data internationally for those who use their network. For example, Gladius (Latin for a Roman foot soldier), a decentralized CDN company, has recently released just such a system. Users can sell their unused bandwidth, and also purchase bandwidth for DDoS (distributed denial of service) attacks.
Because blockchain technology decentralizes those points of bandwidth, any single server crash or service interruption can be almost instantly healed by rerouting through the many thousands of other nodes, or points on the network. Therefore, even from a reliability perspective, blockchain is solving CDN related issues.
As these examples show, the underlying fundamentals of blockchain technology promise to create a fast, simple and secure way of communicating. Because the distributed information is both secure and accessible, the technology provides a unique solution for bringing speed and security together.
The bubble/bust cycle of technology is nothing new. Because new technological innovations are exciting, investments flow in and move a market like a traditional bubble. However, with blockchain, like its dot.com predecessor, it seems the technology is here to stay.