Internet Expropriation Without Compensation: No Freedom Without Knowledge

charles sewela

By Charles Siwele

In my previous post, Internet Expropriation Without Compensation: Cryptocurrencies as the Backbone of Economic Freedom, we explored some of the basic and most important tenets of what decentralized digital currencies are and the concepts that make them unique and valuable. We explored some of the novel ideas that can be powered and driven by decentralized digital currencies. This time around, I thought it prudent to first complicate things just a little. This complication is necessary as it will ultimately make clearer firstly the truly enormous potential proposed by these decentralized digital currencies. This complication will also foster a deeper, more intimate understanding of the environment in which these decentralized digital currencies operate, as well as how that environment evolves with new ideas.

So for a start, there is a need to grow in our terminology, and the most important terminology growth priority is shifting from use of the term decentralized digital currency to the term blockchain asset. You might recall from the previous article, we explored what the blockchain is. As a convenient recap and clarification: Blockchain technology refers to the use of a decentralized transaction ledger that lives on a computer network. The ledger lives on all the network’s machines, meaning (1) it is copied to all machines so that it can always be accessed even if any number of the network machines are inaccessible but there will almost always be at least one machine from which this ledger is accessible. (2) Every record ever processed or recorded is accessible from this ledger at any time by anyone. (3) Through the application of transaction consensus algorithms (the computer geeky stuff comes in here), all false transactions that fail confirmation, and fail to fit in with the history of all other transactions in the ledger, are swiftly and promptly rejected.

With this in mind, consider what an asset is by definition: an object, under ones control, which can be sold or used to generate some useful benefit (e.g. money, food, delivery/transference of economic value, etc.). Blackchain assets are digital tools that can be used to (1) transfer value between two or more remote locations very quickly and reliably. (2)They can form a decentralized database for the storing of data for applications, systems and content. This means such a database can have a far higher resistance to hacking, corruption and manipulation than a centralized database. A third and particularly notable use of Blockchain assets is the prospect of acting as a store of value. This is an interesting value proposition for philosophical reasons as well as for practical ones.

Consider for a moment, that a blockchain asset, such as Bitcoin, has been recognized (by a base of consumers) for the value it has in its ability to store, secure and easily transfer incorruptible information. Such a system, application or software surely is inherently valuable in this day and age where information is fragile, and easily compromised? Therein lays one value proposition that makes Bitcoin valuable. It is not the only value proposition but definitely an important one. Practically this can be opportune for a base of consumers who can appreciate the value in this proposition, this is thus where the decision is then made by an investor, speculator or other interested party, to get involved in owning a part of this technology, that ownership comes in the form of buying and owning blockchain asset tokens. Those tokens can come in many forms, and serve numerous purposes. An example could be a token such as a Bitcoin token representing the inherent value of the Bitcoin blockchain. This value is perceived and subject to market consensus and demand. Another example is Etherium. Etherium is significantly different from Bitcoin, although based on the same most fundamental idea of blockchain technology. However Etherium goes a step further and says, “Ok, so Bitcoin, you have all these potential applications and uses in theory, but you don’t actually do anything apart from transfer and store your own tokens of ownership. I’m going to switch it up.” It then switches up and creates a development environment based on blockchain technology and says, “Hey everyone, you can build applications and systems, use my decentralized network to manage the information of your system, and use my token to power or charge users for transactions and record changes made as they use those applications and systems on my network.” This then becomes the new value proposition applied to the Etherium network and, by extension, the Etherium token Ether.

Now we can start to see where the value of blockchain assets comes from and how these blockchain assets justify their value. There have been major progresses from the early days, where Bitcoin was the sole blockchain technology in use, to the modern day, where a mushrooming of other alternatives have been born or have otherwise evolved. These alternatives have attempted to improve on the original blockchain concept. The environment in which blockchain assets dwell is one that is constantly being tested with new and interesting re-imaginations and re-workings of what the blockchain protocol can look like and what it can do.

To understand what blockchain assets are is imperative in being able to make informed decisions about investing in such technologies. This is why this piece is so focused on the nitty-gritty bits of what makes blockchain assets valuable and how that value works, grows, and evolves. Understanding why blockchain assets matter is critical to understanding what it really means to invest your time and money them. Investing in blockchain assets requires that you be prepared to invest your time to realize what your personal role is in the blockchain ecosystems, as well as which ecosystems to invest your time and money in. With limited resources (time in particular, money more generally) it is critical to have a firm and easily adaptable approach to understanding the economic value propositions proposed by the various assets out there, as well as being able to quickly spot investment propositions that sell you more dreams and clouds than real applicable value.

We as Africans stand at a digital crossroads; where opportunities stare us in the face and beg for exploitation. The tools are already available and only require social, communal and entrepreneurial will to take advantage. Social media, for one, provides us with an opportunity to create networks of business minds, technical IT enthusiasts, marketing gurus and social activists, ready to cooperate to create our own Afrocentric, blockchain-based ideas and bring them to life to spur social and economic revolutions continent-wide.

Going forward we will start looking at blockchain technologies from a financial and economic perspective, including investing, trade and mercantile opportunities. We will be looking at real-world applications, such as payment gateways, value transfer platforms, smart contracts (will be explained), the roles that these applications can play in practically addressing social ills, unemployment, education and other areas of social and mass personal importance. We will also at some point, explore the role the state plays, can play and should play in the regulation and support of blockchain technologies. This will also encompass a comprehensive take on the advantages and conflicts of interest that the state (any country) is faced with when confronting the prospects of blockchain technologies and digital currencies.

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  1. Good day uncensored.

    Is your VBS account number correct. I was trying to transfer money into that provided account number but my system says it is invalid. Thanks.

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