Bloomberg: Beyond Bitcoin
News of the Bitcoin market’s latest run-up or sell-off boosts awareness — but also confusion — about Blockchain, the public ledger of transactions that forms the foundation of the cryptocurrency. But even the most passionate digital currency advocate will be thinking differently about Blockchain in the near future.
Some background: The concept of blockchain has been around since the 1990s, remaining obscure until the birth of Bitcoin and all its surrounding hype. Confusion about Bitcoin’s purpose and the nature of its valuation led to widespread misinterpretation of the underlying technology of blockchain.
In 2013, Bitcoin’s major price movement down and then back up shined a light on the underlying technology and its ubiquitous nature. Realizing blockchain’s potential and versatile applicability, more and more companies, especially financial institutions, invested major resources into the blockchain industry. Fast-forward to 2018 and we see that trend intensifying. As more companies adopt the technology, blockchain is truly now on a healthy and progressive track to realize its real potential and versatile applicability.
Realizing that potential means moving far beyond Blockchain 1.0 — decentralized ledgers that record transactions, as required by Bitcoin — and even beyond Blockchain 2.0, which was all about “smart contracts” and exemplified by the cryptocurrency Ethereum.
It’s time for Blockchain 3.0.
Soon, all eyes will be on the next iteration of blockchain and its decentralized apps, or “Dapps” for short. Dapps signal an exciting new era because they require no middle man — no sharing-economy mediator like Uber or SnapGoods — to connect customers and businesses directly. Instead, users and providers are free to meet up in the open space of a blockchain-secured environment.
Dollar figures associated with cryptocurrencies are immense, but the real fireworks are still to come. Confidently, ArcBlock’s founder and lead architect, Robert Mao, lays out a vision of Blockchain 3.0 as a new technological phase with apps as its core value proposition, much in the same way the App Store contributed to widespread adoption of the iPhone.
“In the future, the value created by decentralized apps will exceed what cryptocurrencies have created to date,” says Mao. “We founded ArcBlock and built a global team with the purpose of creating the next-generation Blockchain ecosystem for building and deploying decentralized applications.”
In Q2 of 2018, ArcBlock’s first decentralized consumer application will launch. The project is currently working in stealth mode, which explains why it is not open-source. According to Mao, the first few applications ArcBlock puts online have a good chance to be under the education category. “As a computing platform, we hope our platform can be used in different industries and business scenarios,” he explains, adding: “I believe there will be all different types of ArcBlock applications in the future — generally speaking, ArcBlock is designed to foster non-financial application development.”
Central to the ArcBlock mission is its incentive policy for developers. Despite the fact that its "token sale share” is very limited, the company prioritizes its developers first, should they wish to participate in the sale. “Even if a candidate is a VIP investor,” Mao says, “I can only say 'sorry,' since our quota is extremely limited. But if a candidate is a developer — even if he or she is an ordinary developer — we are willing to give them a chance to participate.”
A new Seattle-based company promoted by the Krypital Group, ArcBlock is positioned to play a dominant role in Blockchain 3.0, which will be a pivot from a focus on cryptocurrencies to development of crypto apps. Unlike its predecessors, ArcBlock offers a platform service, not a standalone software package or set of APIs.
The path mapped out by ArcBlock represents a new level of sophistication in the field. For all of the dazzle surrounding blockchain, its current architecture is lacking. The actual technology is still in its infancy, beset by numerous flaws that keep the system from being user-friendly. Performance is a central challenge — the blockchain used by Bitcoin can handle seven transactions per second, and Ethereum can only handle a few more. That is unsustainably slow processing.
ArcBlock was developed as a comprehensive solution, combining blockchain technology with cloud computing to enable an incentive-driven marketplace for reusable services. The platform improves upon basic foundational components by connecting an existing system to blockchain networks, enabling companies to automate business processes using the data and identities associated with existing systems.
Essentially, ArcBlock is a cloud computing platform powered by blockchain and built for blockchain. It differs fundamentally from cloud computing platforms like Amazon Web Service or Windows Azure, which are owned by large companies. “These are powerful and highly valuable platforms, with lots of applications and services based on them,” says Mao, “but they are owned and dominated by a single player. ArcBlock is different. It's an ecosystem that will eventually be owned by the whole community, not by ArcBlock. That makes it a true revolution.”
Since 2014, Mao has been focused on the application of blockchain technology in non-financial fields. Solutions serving both the scientific and the human components of blockchain were needed in the marketplace, and it was that need the ArcBlock team identified.
“ArcBlock’s primary goal is to remove the barriers that have slowed blockchain adoption among the general public,” explains Mao. “We’re also passionate about developing unique approaches that will significantly advance blockchain development.”
A potential contributor can start with the ArcBlock Open Chain Access Protocol, from which other core components flow. Enabling open connectivity over multiple blockchain protocols gives developers the freedom to evaluate blockchain protocols, and even to switch back and forth between them — addressing a problem known as “platform lock-in” that hobbles functionality and innovation.
Part of developing those unique approaches is incentivizing contributors. “Miners” in the ArcBlock platform bring computing resources, but they also help to jointly build and extend the platform. Those who contribute resources or services get rewarded with tokens (called “native” ArcBlock tokens, to distinguish them from conventional cryptocurrency tokens).
“This is a marketplace driven by token economy,” Mao points out. “ArcBlock’s miners will contribute reusable components, new services or ready-to-deploy applications,” all in exchange for token rewards. In that way, the original connection between blockchain and digital currency is retained, in the name of innovation and productivity.
This reward-based interaction between the original architecture and its community of contributors leads to a platform that continues to evolve on its own. And it is an example of a single company, ArcBlock, showing the imagination and leadership to support a thriving community that Mao expects will “kick-start a new blockchain revolution.”
Among other breakthrough events the company foresees in its near future is an inaugural Developer Conference, planned for 2019. “This will be a milestone that broadens our developer pool and facilitate further participation in ArcBlock’s development,” promises Mao. Very likely he and his team will be the first to tell the world about Blockchain 4.0, 5.0, and beyond, sketching the future of what blockchain can mean to societies and economies around the world.