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A colossal game-changer has entered the scene: the emergence of a new class of products and services - those fueled by data.
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A colossal game-changer has entered the scene: the emergence of a new class of products and services - those fueled by data.
Imagine testing out your first successful time machine prototype in 2018 and stepping through the matrix into April 2020. Your first sight of this time is a newsstand (albeit, rather deserted) with headlines blaring about oil prices crashing below zero.
Undoubtedly your initial response would be to suspect you’d accidentally jumped 20 years into the future, instead of two. You’d also be reasonable to suspect that this future society is on the brink of migrating to a renewable energy grid, turning crude oil into a burden to dispose of rather than an asset to hoard.
Only once you’d gotten beyond the headlines to read through the news articles would you grasp the unprecedented circumstances (in modern terms) that have led to the oil apocalypse of 2020.
Although it’s difficult to estimate how long it will take society to change over from fossil fuels to alternative energy, we are undoubtedly in the midst of the transitioning phase.
At the same time, our search for alternative sources of electric energy to fuel production and service delivery is only one factor that is bound to change the face of the future economy.
Another colossal game-changer has entered the scene: the emergence of a new class of products and services - those fueled by data.
Let’s backtrack through industrial history:
During the first industrial revolution - the period from about 1760 to approximately 1840 - water and steam was used to mechanise production. The second industrial revolution, or the technological revolution, lasted from the late 19th century into the early 20th century, utilising electricity to fuel mass production. During the third, electronics and information technology was added to the mix to automate production.
Until now, economic activity - the production of goods and services - has relied primarily on electric energy and intellectual capacity. But, as we’re entering the fourth industrial revolution, products and services are increasingly data-based and dependent on a new type of lubrication: data.
“Every moment of every day, countless data interactions take place - information transmitted between humans, between humans and machines, and also between machines. A cacophony of noise. Randomness. Chaos.” - Bitstocks CEO-Founder, Michael Hudson
Though most consumers are still unaware of the emerging data economy, you need only take a closer look at the business models of the corporate giants of our day to see that we’ve already entered ‘the Data Rush’.
“In 2017, the five biggest American IT companies had a combined valuation of over $3.3 trillion, and made up more than 40 per cent of the value of the Nasdaq 100.” - Conor Sen, via Bloomberg Opinion
American technology giants - Amazon, Apple, Google, Facebook, and Microsoft –- have already usurped energy corporations at the top of the NASDAQ stock index. Although these companies offer a mix of products and services, they have a key factor in common: they are all investing a significant part of their R&D on getting aboard the data train.
“What’s the big brouhaha about this data-based economy you speak of?” you may ask.
Fair question.
The first wave of data-based products and services have so placidly entered our households and business world that we hardly think of them as the build-up towards a tsunami. Facebook’s targeted news feed, search engine algorithms trained on the data of their users, and virtual services like Siri, Alexa, Echo and Google Assistant.
The natural evolution of such data-based products and services, however, is an intro into a highly automated economy and AI reality that science fiction writers have speculated on for decades.
Our society is developing into a system where every interaction will potentially be linked to a data interaction between humans, between machines, or between humans and machines.
These interactions could be as basic as connecting your sports watch to a virtual personal trainer to calculate your performance and adjust your exercise routine for the next week accordingly.
It would also include more complex calculations and automation, such as adjusting the production of medical supplies through predictive algorithms plugged into a vast range of data sources: from human, to environmental, and even societal data streams.
Eventually, it will be as all-encompassing as supercomputer computation: algorithms plugged in to all of the data generated by humans and devices around the globe to calculate just about any variable.
It's about financial transactions and data interactions: Millions of them per day, then billions per day. But, to facilitate the broad-scale implementation of such a world, we’ll need an entirely new data infrastructure, or data pipeline to be built.
“As a global and public ledger, Bitcoin is capable of not only recording all interactions of data transfer but also doing so in chronological (timestamped) order, providing us with an auditable, immutable trail of evidence.” - Bitstocks CEO-Founder, Michael Hudson
If you’re wondering what any of this has to do with Bitcoin, don’t feel put out. You are but one of the millions of people whose understanding of Bitcoin has been built on the multitude of false narratives; Bitcoin as speculative asset for the man and woman on the street, Bitcoin as dark money, Bitcoin as a system to enable anarchist ideals, etc.
If these descriptions sound familiar, we recommend that you get yourself a copy of our (free) eBook ‘A Short History of Bitcoin Myths’ to help you clear the rubble.
Our own ‘aha moment’ in coming to understand the true potential of Bitcoin happened when we grasped that monetary transactions are only one application of the fast and cheap transactions that Bitcoin offers as its value proposition.
With each bitcoin transaction, its associated data is immutably recorded to the blockchain ledger. This data could be as minor as the metadata of the transaction, stating little more than the timestamp of the transaction. On blockchains with a big enough block size, however, the data you embed with your transaction could be an entire data file!
Here’s where it gets really exciting: each bitcoin transaction also has the capacity to trigger an ‘intelligent action on the blockchain, like a simple smart contract or a computation.
So, if we swap ‘transactions’ for ‘data interactions’ within our definition of Bitcoin, this is what we come up with:
Bitcoin is the pipeline that transmits, records, secures and computes data interactions of any type.
And now you see why the Bitstocks team keeps hammering on about valuing Bitcoin node implementations by their scalability, security, stability and transaction speed instead of the current price point! For us, Bitcoin is not a speculative asset nor a means to anarchy, but the data pipeline for the fourth industrial revolution.
Whatever the data-based products and services of the future will look like, the corporations who get in on the data train early on are positioned to benefit disproportionately. In order to remain competitive as the volume of data collected grows from a trickle to a daily tsunami, however, these data-based businesses will need the support of a data pipeline that can adapt to their requirements.
Satoshi Nakamoto designed Bitcoin with this goal in mind. While there are currently three different Bitcoin node implementations (Bitcoin Core or BTC, Bitcoin Cash and Bitcoin SV) that all boast the brand name, only one of them is on board with this vision...
If you’d like to know more about Bitcoin’s potential to serve as infrastructure for the data-based economy, we invite you to join our advisory webinar this Wednesday at 11am GMT by signing up here.
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