ichthyoid

In Part 1 (I've changed the name a little to reflect this on-going series), I talked about the rise and evolution of traditional tech and the Internet, and began to talk about how they can inform us (and hopefully blockchain developers themselves) about the direction that blockchain could potentially go into. Specifically, I mentioned that, if blockchain is to going to be successful, it needs to solve problems that people already have, but address them in a way that is far better than its current competition, as well as easy to use so that a new mass of consumers can quickly become acclimated to and take advantage of the change.

In this second part, I want to theorize on what blockchain is good for, and how it can be applied in the world. For the most part, perhaps because of the infamy of Bitcoin, most of the development for blockchain technologies have come in the form of reinventing finances to be an immediate monetary transaction platform that anyone can use. But I don't believe that's the only thing that blockchain can (or should) be used for.

Disclaimer: Everything said here is obviously just my own opinion and perspective. I could be completely wrong on some of this stuff.

A Practical Definition of Blockchain

First, I think it would be a good thing to define what blockchain actually is, and what it does practically. According to wikipedia, blockchain is:

a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data

What does that mean, though?

Let's pretend we have a book. In it, there is a list of names. The first is just a simple name, “Tom”. The second part of the list also has the name “Tom”, but has the next name “Jane”. Third on the list, we have both “Tom” and “Jane”, and also a new name, “Phillip”. In fact, each subsequent name on the list has all the names that come before it, as well as a new name. And in order to add a new name into this book, we always need to have the same names that have come before (consensus), before adding our own new name. If we try to add a name without the previous ones, the book rejects our new entry.

By nature, then, this book (or ledger) is extremely secure, since I can't retroactively go back and change a name on the list. If I try to, then I have to change every single subsequent item on that list. But because the ledger rejects any entry that doesn't match the rest of the consensus, we are unable to actually change anything in a blockchain.Ok, we know what it does. But why is it so important?

Since the ledger itself is essentially unbreakable, it gives me the ability to know an exact history of events without needing to verify it with anything or anyone else. I don't need two or more ledgers because the one I have can't really be changed. If anyone tries to, they will be rejected.

Finance is the most obvious application for something like this. In the trading of goods and services, if I want to be a good manager, I need a list of who has paid for what, and that list needs to be nearly impossible to screw around with. And so, the blockchain finds its most native application in the decentralization of finances (DeFi) because there is no single central authority outside of the ledger that is needed to make sure that all transactions recorded are legitimate.

But what else could blockchain technology be used for?

**Blockchain vs. Databases
**One of the uses I've been pondering is the use of blockchains in one of my favorite past-times: Gaming. But some of the ideas put forth in the use of blockchain for gaming seem to be misunderstanding what blockchain is good for.

Take this Extra Credits video, for instance. While I deeply admire the team behind Extra Credits for their contributions to the gaming space (especially in terms of theory behind game development), I think in this video, they've missed the mark a bit.

In the video, they espouse the idea of using blockchain for detailing the history of particular items across time. These histories would also give the item small bonuses that, in time, would make it a truly legendary and valuable thing to have. This idea may seem on the surface to be a great use for blockchain, until we realize that we already have something that fits this far better than a blockchain ever could: a database.

Databases have a similar function to blockchains. In our metaphor, they record names in a ledger which can then be used for reference by external apps and software. Databases don't have blockchain's inherent security. However, the one thing that databases do have is the reason they're still so valuable today: speed.

This is because blockchain's inherent security is also its (somewhat) fatal flaw: the act of the system (no matter if it's PoW, PoS, or consensus) checking to make sure that each block is valid slows its ability to create more blocks in real time. While some have gotten quite fast, so far, databases are still the fastest way to do this.

And since video games like the one proposed would have millions of similar items, inscribing those millions of items with new names and histories as they happen in real time would halt the system so fast that the game would likely be slowed down because of it. It would be a fix for an invented problem, one which could be solved without blockchains anyway.

And so we've come to the problem of blockchain today: what problems do blockchains solve which aren't already solved by other methods?

It seems to me that any solution needs to desire the inherent security of blockchain more than speed to accomplish a task. In other words, the problem needs to require security before speed above all else.

**Value through Gaming Economies
**First, let's look at an application that's similar to current DeFi, and see how that can branch out into other sectors of tech.

The Ripple funded group Forte has been creating a platform for game companies to use blockchain in their products. According to their website, their goal is:

Building a community-owned gaming platform with breakthrough technologies and new economic models presents an opportunity to change the games industry forever.

Since I don't have access to their platform, I can only conjecture at this point. What this probably means is that Forte is building a platform from which gaming companies can connect their various in-game economies to in order to create a more robust and secure mega-economy for games in general.

Something like this does currently exist (after a fashion) on Valve's Steam platform. On Steam, I can play multiple different games from a variety of different companies. In doing so, I can earn collectors items such as trading cards or even in-game items sometimes. I can then sell these different items in the Steam Community Marketplace and use that money inside the platform to purchase other games or things.

What's important to understand here is that the Steam Community Marketplace is a closed garden. This means that whatever I decide to earn, buy, or sell in it forever remains inside. I can't farm items or cards in one game on steam, sell those cards, funnel the funds back to my bank account, then go buy some coffee at Starbucks with the money I made.

And even if I could, that sequence of tedious events is practically begging for a better user experience which blockchain can adequately solve quite simply.

Imagine a world where the video games we play can create for us some kind of value that we can then use to trade on an open, global market. I can play or win a few matches on Super Smash Bros, build a few houses and infrastructure in Minecraft, and do a few trades in my favorite MMORPG. Those actions create some sort of value that I can then immediately and directly use to go buy my next lunch.

Or a second scenario: I'm primarily a professional DOTA 2 esports player. But there are times when I'd rather play Fallout or World of Warcraft. When I play those games, the in-game rewards I collect or obtain, I can trade for value which I can then send into DOTA to purchase new skins and other items.

In this way, games can participate in a world economy that is ultimately mutually beneficial to everyone.

It's not that Valve's Steam platform can't do this today. Theoretically, they can issue a “Steam Credit Card” which allows its users to spend money they've earn inside its platform elsewhere. And by issuing a credit card they're in control of, they would be able to keep the walled garden idea inside the platform.

But not every game goes through Steam. And many video game companies would rather design their own solutions that they're in control of, rather than be subject to any other publishers' whims.

And this is where Forte and its (presumably XRP and ILP-based) economic gaming platform comes in. It offers an in-built economy that can potentially cross between any and all other gaming blockchains, so that no matter what, the games that developers are creating would have tradable value in the real world.

The success of this vision depends on a growing network effect. Like Ripple and its ODL software, Forte would need to create a network of well-developed games that use their platform. These fun-to-play games would encourage players to use their games as a self-funding or trading platform across multiple genres. Then, slowly, players who realize they can gain value out of their gaming time will start to only play games which participate in this network (since those are the only ones with real value). Then, as that base grows bigger, other developers would be pressured into making sure their games work well with Forte's software, since gamers gravitate towards it. The cycle then starts to compound, to the point where both consumers and developers are participating on an open exchange platform run by blockchain technology.

Digital Rights Management: Finally Done Right?

A second area which can benefit from blockchain technology is in the realm of Digital Rights Management, or DRM.

Even today, DRM is a pretty dirty word amongst consumers. At first, it was purely an attempt to combat piracy. But the unfair restrictions created for consumers ended up backfiring for a lot of developers and license holders, to the point that, currently, there's still a lot of piracy and anti-EULA attitudes going around.

The problem with DRM and gaining access to art and software has always been immediacy and simplicity. Just like how iTunes and Spotify resolved a lot of musical piracy issues by simplifying the process of getting to listen to the music we want, we can apply this mold to DRM as a whole.

So how does blockchain further solve this problem?

Let's look at it from a software publishers' point of view. Again, I'm looking at video games. Piracy for video games is a problem since code frameworks for access keys are easily broken. But on a blockchain, there can only exist a limited number of these keys. And since these keys can be stored on tokens in the blockchain ecosystem, the problem of made-up access keys is solved as well.

Let's say a game company creates a key blockchain for a new game. Each one sold will have an indivisible token which has a unique key to access the game.

Whenever the player logs onto the game, it requires a legitimate key of which there are a limited number. That token key is transferred to the developer's wallet for as long as the game is being played. When the game deactivates or disconnects, the token key then goes back to the player holding it (by smart contract).

This solves a number of issues. It immediately solves piracy, since no player could access the game without it being a legitimate copy. But it also solves the issue of returning games, players lending copies of games to friends, and a number of other headaches developers and publishers have had for a while. And if done correctly, blockchain can streamline the solution to these problems for everyone involved.

What About Artists and Creatives?

For artists and other creatives, I believe that the problem with DRM, copyright, and licensing isn't piracy. As a musician and synth enthusiast, I don't actually mind much if people who listen to my music download it for free. I know that those who truly enjoy my creations would usually want to support me of their own volition (financially or otherwise). That's why I think current efforts with DRM and its ilk are addressing the wrong problem.

Instead, blockchain could be used by artists to give tokens to their supporters in order to access more of or better versions of their content.

Imagine: if I as a musician am planning a concert. Only those who have my special tokens can come to the concert. I can then sell these tokens to my followers who want to join me. After selling them, my followers can, of course, do whatever they want with it. But each of these tokens can have some kind of memorabilia attached to them (perhaps free access to certain merchandise or other a personal signature or something).

I can even do something similar to the Extra Credits video posted above. Each person who has a token who joins gets some recognition on chain for joining my concert. And since (again) there are a limited number of tokens, these things can eventually become collectors items for special fans and the like.

This scenario would be far better than the video game one given, since (for the most part) I don't really require any speed for these kinds of transaction. I require security above all, because I don't want some mistake to be recorded on chain and a fan to get upset because they were cheated out of their token.

Whoops

WOW, ok, I've written waaay too much this time. I'll follow up with a third part with some final thoughts on Coil and whatever else comes to mind in exploring blockchain. Hope you enjoyed!