Decentralized Applications to Offer More Than Just Bitcoin Transactions

The Bitcoin protocol's more forward-thinking implications were the subject of CoinSummit's decentralized application panel on 25th March.

AccessTimeIconMar 25, 2014 at 10:32 p.m. UTC
Updated Sep 11, 2021 at 10:34 a.m. UTC

The future of digital currencies and the question of whether that future involves decentralized applications took centre stage at CoinSummit San Francisco on 25th March in a talk that included Ethereum's Vitalik Buterin; Mastercoin Foundation's David Johnston; and NXT's Brian Snyder.

The panel was moderated by Adam Levine of popular online podcast Let’s talk Bitcoin.

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The purpose of distributed applications is to better economize digital resources.

The concept of bitcoin was the impetus for this, but Vitalik Buterin of Ethereum, David Johnson of Mastercoin and Brian Snyder of NXT believe that there are many use cases for cryptographic systems outside of just money systems, the use case that bitcoin has popularized.

Ethereum's Vitalik Buterin told the CoinSummit crowd that cloud storage is one example of decentralization disrupting software:

"Dropbox has a markup of 100x. But, what if you could reduce that to 10x? What if you could sell space on your hard drive?"

Such forward-thinking ideas were on full display in a talk that discussed how bitcoin could have ramifications beyond the world of finance, and how today's entrepreneurs are working toward this goal.

Next-generation projects

The panelists talked at great length about distributed uses beyond bitcoin, and how soon these ideas will come to life.

Mastercoin's David Johnston, whose organisation provides a protocol that uses bitcoin to enable embeddable records such as smart contracts, said:

"In 5-6 years I think you'll see a billion people using bitcoin, but they won't even see that they are using."

The proof-of-stake cyrptocurrency NXT is focused on fraud prevention via the use of tokens, Brian Snyder told the audience. The idea is to build something distributed but also provable and secure.

"I've seen credit cards get hacked, I've seen IDs hacked," Snyder said.

Ethereum is building distributed autonomous corporations, or DACs, to offer more complex functions to enforce the advanced functions of money.

Said Buterin, the core developer of Ethereum:

"We want to reinvent the wheel. And make it better."

He said that Ethereum is focused on building a more scalable bitcoin that can do much more than just spend.

Added Buterin: "I think the reason to do this independently [of bitcoin] is all about scalability."

Distributed software interest

CoinDesk - Unknown

(L-R) Synder, Johnston, Buterin, Levine

The panelists agreed that Bitcoin's rising price and hashing power are major problems, ones that they say squeezs out the mainstream's interest in building out its infrastructure.

Said Buterin:

"Bitcoin itself isn't really all that egalitarian."

Alternatives such as NXT, Mastercoin and Ethereum are next-generation software concepts that can inject new ideas into the cryptocurrency community. Mining is important for today's cryptocurrencies, but new ways to offer incentives to the community are going to be important.

Said David Johnston:

"If you're not doing something that requires hashing power, you need to find ways to incentivize other groups."

The talk concluded with what David Johnston called 'Johnston's Law':

"Everything that can be decentralized, will be decentralized," he said.

Image by CoinDesk

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