Inside | Real news, curated by real humans
Inside Bitcoin

Inside Bitcoin (Sep 12th, 2019)

We're back again today with the second part of our interview with DApps and JavaScript developer Eric Elliott. You can catch the first part in yesterday's edition of Inside Bitcoin.

As a reminder, don't forget about the top Bitcoiners list on Twitter. You can help us update it and add members to the list by suggesting people to follow. Hit reply and tell us who should be on the list.

-- Allen, guest editor

  • Email gray
  • Permalink gray

If and when DApps do become mainstream, how will that change the nature of the internet and life as we know it?

Ideally, users will barely notice the transition. Video game users are already accustomed to transacting in digital currencies. What changes for them is that they can take those currencies out of the game and spend them elsewhere, or take their cherished video game items, display them publicly outside the game, and sell them on the open market.

You’re going to start earning money more directly for your viral videos, tweets, and blog posts as admirers send you tips. Your spare computing resources (CPU, Network, Storage) can earn you a few bucks per month while you sleep.

The really big changes coming will revolve around financial inclusion. It’s about to get a lot easier to invest your money, save money, earn interest, purchase insurance, or buy real estate. The big mantra of crypto has been “bank the unbanked.” The mantra of decentralized finance is “unbank the banked.”  I think the truth is somewhere in the middle. Smart banks will see the enormous potential of adopting cryptocurrencies into their core business models. This is already beginning to happen with things like the Bakkt exchange.

Of course, all of that is just the beginning. None of us can imagine the many ways these technologies will mash up with different user community ideas.

  • Email gray
  • Permalink gray

Which industries stand to gain the most from DApp development? Which companies in that industry are funding development or working on projects?

I can tell you which industries are under the most immediate threat and have no choice but to embrace, adapt, or die:

  • Banks
  • Insurance Companies
  • Real estate
  • Stock exchanges, brokers, etc.,
  • Stock option liquidity marketplaces

If you’re in any of these industries and your company is failing to invest heavily into research to disrupt your own core business model, somebody else is going to do it for you.  

All of them are getting tokenized right now, and the tokenized versions are so much better. These industries won’t be able to fight the change any more than the music industry was able to hold back the decimation of physical music sales circa 1999 - 2010. An entire industry was decimated in a decade. The same thing is about to happen again. We’re at the beginning of the beginning. 

The largest companies in all of the listed industries have already dipped their toes in. I’ve spoken to people at the top tiers of a few of these industries, and I know that some of them are already working on it, or gearing up to start working on it in 2019 or early 2020. Bakkt, a cryptocurrency exchange, recently started offering warehousing services for institutional investors. The parent company also owns the New York Stock Exchange.

  • Email gray
  • Permalink gray

What programming languages are most used for DApp development, and which offer the biggest benefits? 

If you want to get started today, learn JavaScript, React, Redux, and Solidity.

Somewhere between 75 percent to 85 percent of all DApp code is UI-related code written in JavaScript. The only smart contract language with widespread adoption to date is Solidity, but it has some big fundamental flaws, and I’m looking forward to competition via Ethereum-flavored WebAssembly (ewasm), which will allow you to write smart contracts in safer languages like Rust.

The most promising language I’m aware of right now is the Haskell-based Plutus language developed by IOHK for the Cardano platform, but it hasn’t yet gone live on mainnet, so it’s impossible to tell yet how much traction it will get.

  • Email gray
  • Permalink gray

The internet started out decentralized and has morphed into a few companies controlling the infrastructure, the advertising, the messaging, and the traffic, essentially falling under the centralized control of a few corporations. Do you think the same thing can happen to the DApps ecosystem?  

Yes. If we tie all our governance power to hash power, or money staked, wealth = power = control, and we’re back where we started. It’s critical that as we build systems, we reward participation, and we incentivize users to participate on an even playing field.

It’s also crucial that we treat user data carefully. We need to put users in control of how their data is shared, used, and recorded. Please, whatever you do, do NOT store unencrypted user data on any blockchain, or on IPFS. Make sure sensitive information is shreddable (sharded into many pieces such that private keys are needed to find it and decrypt it, and deleting the keys is equivalent to permanently erasing the data).

Be careful of user safety, as well. Try not to publicly link a user’s identity on a social network to the same wallet they use to store lots of money.

DApps have the potential to give users unprecedented control over their data, privacy, and finances, but that won’t happen automatically just because we’re building them on top of blockchains. We must be empathetic to our users' needs.

  • Email gray
  • Permalink gray

What would you like to add?

A lot of people seem to think there’s going to be a single platform winner-take-all in crypto. They think that if any other token exists, Bitcoin hasn’t done its job. That’s just silly. Before any digital currency existed, in Colonial America, there were hundreds of local currencies. If winner-take-all was not a requirement in traditional money, why should it be a requirement in crypto?

Bitcoin is an amazing network with some great security properties, and BTC is a great store of value and transaction liquidity instrument to get money in and out of all cryptonetworks. 

It has already won in those respects. We don’t need to squash all the other technical innovation in the space just because we believe that Bitcoin is great money and should one day become a global money standard for transactions.

Retail transactions account for about $22 trillion dollars in annual exchange, but there are hundreds of trillions of dollars worth of other assets trading hands in securities, real estate, bonds, debt, and so on. Those things will require sophisticated smart contracts to be tokenized effectively, and Bitcoin (purposely) is not a robust smart contract or token platform. Opening it up to make it great at smart contracts would hurt its capabilities as a security settlement layer for crypto.  

Crypto is the biggest pie the world has ever seen. There’s plenty of room for Bitcoin and Ethereum, and hundreds of other cryptonetworks, each with its own trade-offs in security, speed, availability, consistency, and so on.

Don’t think of alternative networks as competition. This ecosystem is much more compositional and cooperative than competitive. Technology needs room to innovate, explore, adapt, and mature, and as these ecosystems blossom, Bitcoin will become more valuable. Ethereum, Cardano, etc. are good for the value of Bitcoin, and DApps will help bring Bitcoin transactions to the mainstream like no other technology can.

  • Email gray
  • Permalink gray

Eric Elliott began working on his first DApp before the Bitcoin whitepaper was released in 2008, but he realized he was too early for the market. Since there was no digital currency to make the idea viable, he abandoned that project. Once Bitcoin was introduced, he kept an eye on developments in cryptocurrency and dove in head first during the ICO boom of 2017.

He's the author of several books, including "Composing Software" and "Programming JavaScript Applications." He's also the co-founder of EricElliottJS.com and DevAnywhere.io. He advises crypto development teams and has contributed software experiences to Adobe Systems, Zumba Fitness, The Wall Street Journal, ESPN, BBC, and top music recording artists Usher, Frank Ocean, and Metallica. 

He enjoys a remote lifestyle "with the most beautiful woman in the world."

You can follow Elliott at Medium and on Twitter.

  • Email gray
  • Permalink gray

Inside Bitcoin is written and curated by award-winning journalist and former newspaper editor Allen Taylor. Recognized by the Dallas Bar Association three times for excellence in legal reporting, Allen has since gone on to author, edit, or ghostwrite several white papers, books and e-books, and over 10,000 blog posts for clients ranging from small business owners to global management companies and corporate executives. Learn more about him on LinkedIn.

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

  • Email gray

Subscribe to Inside Bitcoin