The Blockchain Is About to Have Its “Internet Moment”

0
601

by Teeka Tiwari, Casey Research:

Justin’s note: Bitcoin is down more than half from its all-time high last December. Other cryptos are down even more. Many new investors are worried about the sell-off, but veterans know that volatility is common in this space.

In today’s essay, world-renowned cryptocurrency expert Teeka Tiwari explains that the early days of the internet experienced similar downturns… and shows how today’s crypto market is setting up for just as big of a recovery…

By Teeka Tiwari, editor, The Palm Beach Letter

In 1984, two young lovers at Stanford University were frustrated. They wanted to send romantic letters to each other over the university’s computers, but they couldn’t.

They were directors of separate departments on campus. But even though their buildings were separated by only 500 yards, they couldn’t email each other.

At the time, Stanford had thousands of computers running on dozens of incompatible systems.

This was a common problem in the early 1980s. You see, most early computers couldn’t talk to one another because their networks used different software “languages.”

Developers had invented computer protocols to allow computers speaking different software languages to communicate.

But there was no hardware device available to enforce the protocols. If computers didn’t follow them, they couldn’t connect across networks.

The couple, Sandy Lerner and Leonard Bosack, realized the need for such a device… a “traffic cop” of the computer world.

They’re credited with creating the first network router. And it’s an invention that can’t be underestimated.

Routers are at the heart of what makes the internet work.

They sort, organize, and direct internet traffic across thousands of networks, computers, and programming languages.

The little company started by Lerner and Bosack was Cisco Systems. Cisco launched its first successful core enterprise router (7000 series) in 1993.

Once Cisco launched the 7000 series, website growth exploded.

The number of websites boomed from 250 in 1993 to 30,000,000 in 2000.

Web traffic exploded 99.9% from 1993–2000.

The value of the internet sector went from $800 billion in 1993 to a peak value of $5 trillion in 2000—a 525% increase.

Meanwhile…

Cisco’s sales went from $650 million in 1993 to $18.9 billion in 2000.

Cisco grew its IPO value of $224 million in 1990 to a peak value of $515 billion in 2000… more than 10% of the entire internet ecosystem at the time.

Cisco’s routers were key to the explosion of internet technology. But most at the time didn’t realize how game-changing it would be.

Today, I’ll tell you why we’re going to see a similar phenomenon take place in the blockchain space.

Blockchain: The Next-Generation Internet

The blockchain is the underlying technology of cryptocurrencies like bitcoin.

At its most basic, the blockchain is simply an online ledger shared by many parties. The ledger records and verifies transactions anonymously using cryptography. But all entries are expressed publicly. Once data is entered, it can’t be corrupted or altered.

(If it all sounds complicated, don’t worry. Most people don’t know how the internet works but that doesn’t stop billions of people from using it every day.)

Like the internet, the blockchain has evolved. (Remember, the internet began as a way to exchange electronic messages. But now you can shop or watch your favorite television shows online.)

There are hundreds of new blockchain applications popping up to solve all types of problems… from speeding up cross-border payments to creating distributed cloud data storage.

But these blockchains are incompatible.

In the past, I’ve called this “the problem of interoperability.”

Take the two most widely used blockchains in the world: Bitcoin and Ethereum.

If you have data on the Ethereum blockchain… you can’t move it to the Bitcoin blockchain. And vice versa.

The internet solved this problem with routers and protocols.

That’s why when you click on a Facebook or Wikipedia link from a Google search page, you arrive on their respective websites.

Even though Google, Facebook, and Wikipedia use different computer systems, they all use the same protocols, and they obey the rules of Cisco’s routers.

The protocols funnel that traffic via routers and serve them up on any connected device… regardless of which software it uses. It’s because those networks were able to share information that the value of the entire network (that we know as the internet) exploded higher.

Blockchains are just a few months away from obtaining their first taste of information sharing.

Just like the internet, when blockchains can seamlessly interact with each other, it will unleash a huge explosion in value. This “network effect” phenomenon is called Metcalfe’s Law.

Read More @ CaseyResearch.com