Much time has passed since cryptocurrencies ceased to be a toy for geeks and received the status of a serious tool that multiplies the capabilities of any platform by hundreds of times. The last two years in the blockchain world have become decisive, and over this small period, the population of Earth has grown acquainted with the technology real fast. On the one hand, now they know about cryptocurrencies and crypto technology in every corner of the world, and this is good. On the other hand, an impressive part of the population still does not understand how cryptocurrencies can improve their lives because they hear the “Bitcoin is a financial bubble” mantra on TV all the time. It is time to fix it.
Cryptocurrencies: The Economy of the Future, or the Future of the Economy?
Armchair analysts are trumpeting that the economy is no longer the same, the old system has outlived itself, and we need to urgently invent something new. Stop the car! We need to rid ourselves of these thoughts and take a course on studying the nuances of economics. First, there is no old or new order. The economy has lived shoulder to shoulder with people for thousands of years. The economy is people, which means it is just as complex an organism that tends to develop endlessly and adapt to new conditions.
The economy is what the Greeks called everything related to the management of a household. Today, the economy is multifaceted and can take on a variety of aspects depending on conditions. Planned, shadow, market, capitalist, or transitional, and these are only the most common of its types. This diversity does not divide it into parts but constantly complements it, like an endless puzzle.
The new economy has become similar to a modular device, as it is enough to update the mechanism with fresh modules, while the rest will continue to work with the same settings. In the global sense, it consists of dozens of such modules, and each operates independently of the other, although they constantly interact. So, any update in the economy is installed quickly and without compatibility problems, almost like on a computer.
P2P Exoskeleton for an Economy
The economy develops over time and is no longer limited to the concept of “national economy.” Modern economics will not be able to move on without intellectual assistants and machine intelligence, just as a man can no longer imagine life without computers. The catalyst for it was the transition to the concept of P2P. In simple terms, it is a kind of exoskeleton for the economy.
This is how a P2P network looks like as one of the ways to connect multiple devices on one network. P2P physical or technical benefits:
Fault tolerance. The network functions immediately on a multitude of clients, when, if one or several nodes fail, the information is saved and ready to be written to new ones.
Optimization. Which is better: two baskets with apples in one hand or one basket in each? Access to any site or file on the network is provided immediately by all participants. Devices find it much easier to download information in parts, at once, than to pull it from one server byte-by-byte. Especially if at this moment, another hundred users are trying to get the same information.
Security. Any change in the network occurs by consensus. Each client must authenticate such changes and allow access to the information. If attackers or a virus software take possession of one of the points, the rest of the network nodes will simply disconnect it from this array until it recovers to its original state.
Simplicity and availability. To operate a P2P network, one must have several constantly working devices with the same client software. And these can be quite weak computers by their technical specs. There is no need to rent a powerful server and a wide channel for traffic. The cost of maintaining the network is reduced by exactly the amount of server maintenance and all expenses of solving problems derived from it.
This is only a small part of what P2P boasts. And these advantages are tested in information technology repeatedly. After all, everyone knows what a torrent is. And how does the economy of the 21st century differ from modern technologies? Perhaps it is time to transfer it to a new type of fuel.
Blockchain and P2P: Harmony in Everything
P2P and blockchain can be summarized by one concept as a decentralized array of devices. At the heart of this concept is one engine, although its implementation varies greatly. Therefore, the blockchain can be called “peer-to-peer version 2.0.”
How to distinguish P2P from blockchain? In the P2P network, there is no one and nothing but soulless hardware. Yes, any node can be controlled by a person, but it makes little difference. After all, the intellectual system needs not the one who controls, but the one who checks. Thus, the blockchain added honesty and transparency to the old protocols. These factors became powerful engines of progress and forced to reconsider the idea of a modern P2P economy.
Moreover, over the past few years, enthusiasts have studied the capabilities of these technologies at a sufficient level to show us how to use the old methods in a new way.
How Does It Work?
The basic principles of the renewed economy are the absence of traditional banking systems and equal cooperation of users. In economics, it is essential to achieve independence in everything, from one person or a group of people to banks and any intermediaries. Such a concept should be based on openness, transparency, and accessibility of information.
New Ways to Get Electricity
It is strange that no one used to guess just how outdated the multi-level electricity delivery system for customers really was.
More than a year ago, LO3 Energy together with Siemens launched a pilot project for the distribution of renewable electricity using the blockchain. So, the owners of solar panels have learned to sell their neighbors extra kilowatts of energy through P2P transactions.
In general, only in the last year, the number of companies wishing to reduce energy costs and optimize this market began to grow by leaps and bounds. Electrify in Singapore, GRID+ in the USA, and Power Ledger in Australia and even in Romania launched an exchange for trading electricity. Is this not the beginning of a real P2P economy?
On December 10, the Russian project Karma.Red announced the successful launch of a decentralized lending platform.
Cross-border P2P financing is what the company calls its type of lending to small- and medium-sized businesses. The principle of the project is very simple. Transactions take place in two stages: the first is the verification of the entrepreneur (borrower), and the second is the attraction of investments for the business. No intermediaries, assistants, or advisers. Everything is fast, transparent, and clear.
The main thing in the project is not convenience, but the technical component. All transactions, operations, and assets are recorded on the blockchain, which ensures complete transparency and openness of the platform. Can such a project fit into the economy of the future? Sure.
Suppose one company wants to communicate official information to its competitor. Both companies are located in the same city, perhaps even on neighboring streets. What are they to do? Send a letter. Of course, this information is not only official but also very important and may well lose its value in a day. Ask a member of staff to run to the next office with a letter? Then it will lose its official status and can be considered spam. And who wants to get into the lair of their competitors? We’ll have to send it in an old-fashioned way. But everyone knows that mail is always long and often unreliable.
The Last Mile Delivery & Logistics Company takes care of this. In VOLT (the project is called so), all communication takes place in the P2P environment:
User A leaves a request on the site, describes the detailed requirements for delivery, and then sets the amount of reward.
User B takes the order, agreeing with the customer’s requirements, delivers the package, and collects the reward in tokens.
That’s it. No third point is given since the system works without intermediaries. Smart contracts monitor the fulfillment of tasks and payments, and all information is recorded on the blockchain. The company declares that such delivery takes no more than two or three hours from the time the application is created.
The idea of VOLT is not to get rid of existing logistics. The project can be used as an addition to it. In other words, it converts centralized delivery platforms to decentralized ones. And this, in turn, plays into the hands of the end user. Will it be able to affect the economy even indirectly? Of course yes.
The Future Is at Hand
Such projects always add confidence and show clearly what the future is. And though some of them may not stand the competition and will be absorbed by larger players, the main thing is that people understand the value of new technologies and learn to use them for their intended purpose.
The crypto economy is just starting its run, but a huge flurry of questions already requires immediate answers. And there is no doubt that blockchain will help the economy solve many problems, although it will take time.