Will blockchain technology rescue the Internet? When Al Gore “invented” the Internet, surely he did not envision a World Wide Web controlled by corporate giants. But, this is exactly what happened. As Net 1.0 morphed into Net 2.0, corporate giants emerged. These corporate giants have become the trusted third parties. Trusted third parties play an important role in the functioning of Net 2.0 or the Internet of Things (“IoT”). They drive e-commerce. As a result these giants now now control the data that is sent over Net 2.0. E-commerce could not exist without trusted third parties. Or, could it?
First, let’s discuss why e-commerce relies upon trusted third parties. Second, we discuss how trusted third parties sell our private data for their own gain. Finally, we will discuss how blockchain addresses this problem.
The IoT, E-Commerce, and Trusted Third Parties
Net 2.0 is the Internet of Things (“IoT”). The IoT ushered in a new kind of commerce; e-commerce. In an e-commerce sale, the buyer and seller (almost) never meet. Therefore, payment is provided through a website. The buyer usually enters a credit or debit card for payment. This creates a lack of trust.
Thus, IoT needed a solution to restore trust in the transaction. The solution was found in trusted third parties. Trusted third parties verify the payments for the parties. They also verify the business status of the seller. Finally, trusted third parties verify the quality of the products or services sold. As a result, the parties to an e-commerce sale feel confident in their transaction. Consequently, without these trusted third parties, e-commerce sales would be much riskier business!
Trusted third parties control IoT
As the IoT evolved, certain trusted third parties began to dominate their fields: Google (search engines), Microsoft (software), Amazon (e-commerce) and Facebook (social media). We all engage with these giants on a daily basis. And, we like it. However, we trade our privacy for the ease of e-commerce. Additionally, we lose control over our private data. This is because these giants learned that our personal data is valuable. Because others will pay for this data, these giants stockpile our data. Then, the giants sort and sell the data. The highest bidders are usually marketing firms.
As a result, Net 2.0 is a centralized system in which the power of oversight is entirely in the hands of a few corporate giants.
Blockchain: Rescuing IoT from the Controlling Giants
Enter Net 3.0: A decentralized World Wide Web. In this version of the web, users will verify the transactions. For this reason, there will be no need for trusted third parties. E-commerce deals will reside on blockchain technology. Most noteworthy is that users will use blockchain technology to validate transactions. Thus, the user validated blockchain will replace trusted third party validations. Because of this, no single entity will be able to store and sell users’ data. Therefore, Net 3.0 signals the end of the giant. As a result, you regain control over your personal information.
Net 3.0 is made possible by blockchain technology. Blockchain is defined as a shared public ledger of records or other transactions that are open to inspection by every participant on the blockchain and not subject to any form of centralized control. The four hallmarks of blockchain technology are:
- Decentralized validation;
- Immutable storage; and
Blockchain and the Future of the Internet
Only time will tell if blockchain technology is the promise of the future. Forward thinking companies are already using blockchain technology to offer customers better e-commerce. How will your business use blockchain technology? Future blog posts will examine blockchain technology and its applications in greater detail. In addition, we will discuss the regulations that are growing up around blockchain and blockchain technology. Our goal is to help you see how to harness the power of blockchain for your business. Check back in a few days to read the next blog.