Applications for the Bitcoin Blockchain

Bitcoin, the libertarian’s dream currency, is far past the heady days of late 2013. When one Bitcoin was worth $1000 USD, there was no end to what could be done; new, gigantic mining rigs were being created, every online store jumped onto the bandwagon, and the price of Bitcoin inevitably crashed. Right now, the exchange rate sits at about $280 USD per coin, valuing all the Bitcoins ever mined somewhere around $4 Billion USD. That’s a lot of coins out there, and a lot of miners constantly verifying the integrity of the greatest thing to come from the Bitcoin community: the blockchain.

The bitcoin is just a record, or the ledger, of every transaction that has ever occurred on the Bitcoin network. It’s distributed, and the act of mining coins creates new blocks, or another set of data committed to the blockchain for eternity. While magical Internet money™ is by far the most visible product of the blockchain, developers, investors, and other people in the know are gushing about the possibilities of what can be done with a distributed record that can’t practically be altered and can’t be deleted.

[Jon Matonis], a figurehead for the entire cryptocurrency movement, recently said Bitcoin has become the strongest computer in the world, and stronger than all of the top 500 supercomputers combined. All of this computational power is effectively funneled in to verifying the integrity of the blockchain.

Bitcoin and other cryptocurrencies are not just a completely anonymous payment system; that’s only a side effect of the blockchain. The blockchain is the only inherently valuable part of a bitcoin; each transaction is logged in the blockchain, providing incredible security over how every coin is spent. No currency in the history of mankind has ever had a record of how every dollar or denarius is spent, and at the very least makes for very interesting economics research. Now, thousands of researchers across the globe are wondering what else the blockchain can do; tapping the power of the most powerful computer on the planet must have some interesting applications, and in the last few months, a few ideas have popped up.

Blockchain as Proof of Ownership

The idea of secure, immutable transactions recorded for all time has obvious applications for contracts and any other legally binding agreement. Already, a few companies are on the case: Stampery is basically a blockchain-based notary public, capable of verifying ownership of files, certifying that emails have not been tampered with, and can do so without an in-house database. It’s directly tied to the Bitcoin blockchain.

Every bitcoin transaction means a little money changed hands, and in the case of Bitcoin, this makes for a perfect substitute for money transfer services like Western Union. With incredible volatility, Bitcoin is not for everyone, so what if real money could be transferred via the Bitcoin blockchain. That’s the idea of Uphold, and while this basic idea doesn’t have the security of a pure Bitcoin transaction, it is somewhat interesting.

Blockchain as Data Storage

While the previous examples are application-specific and mostly tied to certain companies and industries. There is another project, something that started out as ‘Twitter on the blockchain”. Blockcast is an open source effort for simply storing data on the Bitcoin blockchain. In storing data on the blockchain, the data are embedded on up to 16 Bitcoin transactions. It doesn’t allow for storing large amounts of data. The total compressed size of a document is no larger than 1277 bytes, or about the length of this post.

By any measure Blockcast is useful in a way similar to Twitter; just something that allows anyone to broadcast information to anyone else. Unlike Twitter, it’s doing so in a cryptographically signed, verifiable format that can never be deleted.

Run Apps On Top of Blockchain

All of these ideas are just platforms built on top of the blockchain, and each of these platforms require a slight re-invention of the wheel. That’s where Ethereum comes in; it’s a decentralized platform to build applications that run on the blockchain. Any developer can create an application like distributed crowdfunding, a democratic organization, or literally anything else you can do on the Internet.

The distributed and perpetual nature of the blockchain is perhaps the purest example of the cyberpunk philosophies that have wound through the Internet over the years. In the blockchain, you can have a completely leaderless organization that can be vetted by anyone on the Internet. It is the most democratic and perhaps anti-corporate application computers have ever been trained on, and the uses for the blockchain will only grow from here.

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