Blockchains could be the last piece of core infrastructural technology needed to facilitate the machine learning revolution in the same progression as the industrial revolution, only quicker.
- Banking 2.0: The first and most obvious application of blockchain technology is the opportunity to reinvent the banking and financial services industry. The current monetary system is far too slow - it takes days and weeks to transfer funds, where cryptocurrency transactions are received immediately anywhere in the world. Sending a payment to a software development team in India means people receiving money instantly, and at a fraction of the traditional transaction cost. This could mean a tremendous speed-up in the velocity of money, and a way to allow legacy banking systems to interoperate, reorganize themselves, and make the whole way they do business more efficient.
- Financial Markets. In financial markets, one clear application of blockchain technology is algorithmic trading and back office operations. High-frequency trading could be taken to the next level implemented in smart contract DACs (decentralized autonomous corporations) and executed by semiautonomous agents with the ability to act more quickly and better crawl information sources for price, news, and sentiment changes. Similarly, whole tiers of back-office operations like clearing currently handled by people-agents could be handled by blockchain-agents. The automation economy is well under way, and blockchains provide the final required checks-and-balances feature of accountability. Blockchains instantiate a robust technology record of all transactions in a universal ledger system that is available for future lookup on-demand at any moment. Financial services businesses like the mortgage industry could implement smart property via blockchains as a universal asset registry and transfer system, and smart contracts for payment automation, interest rate resets, and securitization packaging.
- RTB and BI Automation. In the same vein as smart contract-based algorithmic trading, blockchains are also well-suited for implementation in other automated high-frequency markets like real-time bidding for advertising and business intelligence. These are already heavily machine algorithm-based markets that could be easily facilitated by being instantiated in blockchains. Again there is quicker, better, more-trackable, more-efficient, permanent, universal worldwide execution, together with record-keeping, monitoring, and tracking. The RTB market is billions of dollars at present and estimated to grow to $42 billion in the next three years. Likewise automated business intelligence is big business, and big data, for example, domain name hosting services use machine learning algorithms to continuously obtain competitive data points for standard services such as the cost of 1-year hosting with 2 GB of storage.
- Blockchain IOT and M2M. We think cryptocurrencies might make our human lives easier, and they do, but even more so, they are for the machine economy. Cryptocurrencies are the economic layer the web never had, and can facilitate not just remuneration, but also the communication, coordination, and tracking of all machine-to-machine and machine-to-human interactions. While two thirds of people are estimated to be online in five years (from the current one-third), 25 billion things are forecast to be online by 2020. A corresponding Internet-of-Money is needed to organize this Internet-of-People and Internet-of-Things, for example seamlessly facilitating a connected car’s progression from smarthome IOT network to smartcity highway to automated city center parking. IBM's Adept announcement at CES is an early example of the idea of smartnetwork IOT coordination using blockchain technology.
- Blockchain Thinkers. Not only is blockchain technology a potential means of enacting Friendly AI, it is more broadly a new concept and tool for instantiating intelligent computing operations in a blockchain architecture. This could have implications for both the development of artificial intelligence and human cognitive enhancement. DeepMind's Neural Turning Machines as an external memory for machine learning algorithms is an example of this kind of instantiation structure in artificial intelligence. For cognitive enhancement too, a blockchain could be the tool that makes lifelogging useful, recording every thought as a transaction in a blockchain memory, for search and recovery later, for example in the cases of Alzheimer's disease and stroke rehabilitation. One implication of Blockchain Thinkers is Blockchain Advocates. Blockchain Advocates are blockchain-based smart contracts as a new form of independent third-party advocate that can act on your behalf in future time frames. Right now you can set up smart contracts to monitor your smarthome IOT network, for example pinging you if the security system goes offline. In the future, your smart contract advocates could confirm that your digital mindfile is still running and being backed up appropriately, doing future real-time oracle lookups. “You’re still running on the current standard, Windows 36” your smart contract butler informs you. (More information: Blockchain Thinkers: The Brain as a DAC and Cognitive Applications of Blockchain Technology).
Bitcoin and blockchain technology could be just the first application of decentralization as a new form of information technology.Overall, blockchains are a new class of decentralized information technology for the potential execution of any kind of administrative task more efficiently, from all applications of money and finance, to government to health. Blockchains are a global-scale coordination mechanism - quicker, more transparent, more participative, and more accessible. Blockchains are a supercomputer for reality in the sense that they are a management tool for any system that can be quantized or divided into discrete elements or constituent parts. Bitcoin as the current ‘legacy’ cryptocurrency with more entrenched network effect adoption than other cryptocurrencies might not be the final or enduring cryptocurrency. Likewise the blockchain architecture as currently instantiated with questionably expensive and wasteful proof-of-work mining operations might not be the final architecture. However, it is harder to argue that decentralization as a new concept and class of information technology is not here to stay given the liquidity and penetration reach of the Internet. Focusing on end-user applications could help Bitcoin shift from its nacency into a more mature phase of cryptocurrency industry development, becoming a value currency, not just a development currency or speculative currency.
More Information: Swan, M. (2015). Blockchain: Blueprint for a New Economy. O'Reilly Media.