August 15, 2015

The Future of Crypto DApps and the Ethereum Project Community

Possibility to Explore
Crypto ÐApps Go From Fringe to Foundation by 2025
By 2025, the Ethereum network will find mainstream success as ÐApps (decentralized applications) emerge from individuals, businesses, civic institutions and governments eager to develop products and services based on a radical mix of trust, transparency and automation.  Within a decade Ethereum – and the idea of cryptographically secured programmatic decentralized applications will likely move from today’s fringe to a foundation of social innovation.

What to expect?
The next decade is likely to be exciting, messy and confusing.  The potential of Crypto ÐApps to change the world will remain far off the radar of most people in the world.  Meanwhile evangelists and skeptics will continue to battle over progress in Twitter stream debates.

Give it a decade to unfold!  If you want to watch from the front-row start following the growing global community of developers and enthusiasts! It is one of the most interesting communities of visionaries and innovators in the world today!

Ethereum: Beyond Bitcoin as the Second Wave of CryptoTech
There is no short or easy way to describe Ethereum.  It takes a few passes to finally get it…! No single blog post can capture all the pieces.  This is my best effort.

Ethereum is a programmatic network infrastructure for developing and hosting decentralized software applications that guarante trust, resliency (uptime) and consensus for execution of terms agreed upon within Smart Contracts.  (An over-simplified analogy is that Ethereum is an alternative network to today’s Internet.)

The essence of Ethereum is empowerment for agents (people, organizations, et al) to conduct transactions in a way that is low cost and designed for a world with fewer third-parties to authenticate elements key to secure transactions.

Imagine a world of direct x-to-y transactions (e.g. P2P; B2B, B2C; Govt2Govt; Govt2Citizen, et al) and exchanges that do not require third-parties:

  • eBay without eBay
  • Uber without Uber
  • Facebook without Facebook
  • Airbnb without Airbnb
  • voting verification without a centralized voting board
  • insurance without a centralized insurer
  • carbon tax trading without a centralized exchange
  • car deed-based sales without car dealerships

Great, which Startups are going IPO?!
We are in the early days of Ethereum (Think the ‘Web’ in late 1980s). The Ethereum Project conversation started in 2013 with the release of a white paper and came to life in the Summer of 2015 with the genesis block of its Frontier blockchain.

We are in early days of first way of applications and development of tools for toolmakers and capital funds (e.g. DApps Fund).

Do not expect mainstream adoption of networks that give us Uber without Uber anytime soon!

If you want to watch early versions of DApps (Decentralized Apps) you might note:

  • ridesharing (e.g. LaZooz)
  • crowd funding (e.g. WeiFund)
  • p2p insurance (e.g. Dynamis)
  • security (e.g. Airlock)
  • decentralized prediction platform (e.g. Augur)
  • personal investment plans (e.g. Etherplan)
  • supply chain (e.g. Provenance)
  • social networks (e.g. Groundhog; Synereo)

Learning More?
Step One: Understand Blockchains + Smart Contracts

The magic of Ethereum is based on its evolution of two concepts receiving more attention today: blockchain and smart contracts.  (We’ll save cryptography for another post!)

Blockchains are immutable distributed databases – where any changes made to past or present transaction or document records is known across the entire network.  There are ‘permissionless’ blockchains such as Bitcoin (and Ethereum) which any individual can download and participant in maintaining the ledge of transactions/documents.  There are also ‘permissioned’ blockchains that can be limited to the use within known database managers ‘friendly to a company, country or group of individuals (see companies such as Eris Industries, Hyperledger et al).

Blockchains function both for database management (via cryptography to drive valid-state consensus of the ledger and avoid so-called Double-Spend problem / Two Generals problems) — and also serve as an automation platform for so-called smart contracts.

A smart contract math-mediated, self-executing contract based on met conditions.  (e.g. When Bill exits my ‘for-hire’ car, the fare will be transfered from his account to my account.)

Smart contracts can be imagined for financial instruments, audits, private data (social security numbers), property titles, consumer web applications, managing internet connected devices or location-based services.

Smart Contracts execute terms and (escrowed) transactions when conditions are met:

  • Asset Sale: Sales terms for any owned asset (e.g. website domain; vehicle; house, et al)
  • Asset Sharing: When Tariq scans his phone over my car windshield sensor, allow him to start the car. When he scans it again, allow him to send funds (alt coins or Fiat curency) to my account.
  • Asset backed Micro-Loans: If government agency verifies that person-A owns x-assets, we will provide credit line or loan of y-amount.
  • Voting (Governance): When John presents his ID key, allow him to vote for elected official in District 15.  At 9pm send all votes from District 15 to Election council and approved media channels. Or Board governance and compliance processes.
  • Learning Credentials: When Alice completes her training program on Kahn Academy, add a micro-credential to her resume or workplace records.

Crypto ÐApps (decentralized applications) are built on the blockchain and smart contracts.

Ethereum, like Bitcoin, is built around a permissionless blockchain using ‘ether’ (instead of bitcoin) as a crypto currency to verify transactions and smart contracts.

Ethereum goes much further and will eventually release other pieces to the puzzle such as:
– Whisper (messaging system)
– Swam (file storing system)

Expect Ethereum to be a full development environment and ecosystem that integrates into today’s familiar ‘browser’ style experiences.

How might the world of ÐApps (Decentralized Applications) unfold?  
First, avoid the temptation of total disruption to the world as we know it. There is a tempting vision from folks on the Crypto Utopian side of the spectrum that DApps (Decentralized Applications) kill-off centralized applications of today (e.g. Uber without Uber; banking without banks; insurance without insurers).

Centralized applications will not fade away!  ‘Third Parties’ will not go away.   There will remain strong use cases for centralized systems.  There will likely be strange hybrids of centralized brands with decentralized elements.

The more likely future is DApps will emerge in areas not currently consider ripe for decentralization:

– civic institutions (libraries; museums)
– lifelong or workplace learning credentials
– insurance (peer/community-based)
– health-wellness (e.g. medical records; incentive based discounts)
– social services (e.g. currencies linked to food/healthcare)
– voting
– transportation
– logistics-supply chains
– art + digital content ownership (e.g.
– energy markets
– workplace contracts
– civil rights / civil disobedience (e.g. Sidekick)

We can expect Crypto DApps to have some spill over of techno-babble linked to social norms.  Just as we learned to integrate buzzwords (online, mobile, social, hashtags) into our daily lives, we can imagine new buzzwords emerging out of the CyptoDApps world: smart contracts (tracts), blockchains (chains), hashes, keys and other concepts yet to be framed for mainstream adoption.

Learn more about Ethereum..


Deeper Concepts to understand:

  • Cryptography (e.g. SHA-256, Eliptic Curve Cryptography; Proof of Work; Proof of Stake; Pseudo Random Numbers)
  • Double-spend problem/Byzantine General’s Problem); Merkel Trees; 51% Attack;
  • Blockchain Database (permissioned and permissionless; time-stamping; persistent)
  • Smart Contracts (Smart Agents)
  • Distributed-Decentralized Consensus
  • Public and Private Keys
  • Ethereum’s Casper GHOST consensus strategy
  • Concepts: Singleton, Turing Complete, et al

Range of Issues – Barriers to Change

  • Social side of Smart Contracts (e.g. Does life become over saturated by smart contracts?)
  • Abuse of Power – How might powerul interests coopt DApps to serve their own interests?
  • Technology is Too Complicated-Complex – Policy makers refuse to give up control to concepts they cannot understand

Interview-ish with Vitalik Buterin and Gavin


Stephan Taul’s 8 minutes to Explain

  • Technical-Historical Talk by Vinay Gupta

  • Sample interview of DApp interview with Digix Global
  • If you want to go deeper into more technical talks:
  • 2014 talk by Gavin Wood 
  • If you want a more Futuristic angle – Melanie Swan has some provocative angles:

Notable Projects Built (or hoping to be built) on Top of Ethereum