Blockchain: Blueprint for a New Economy

onto its own platform.63 The implication

was that Counterparty re-created

Ethereum on the existing blockchain

standard, Bitcoin, so that these kinds of

smart contracts might be available now,

without waiting for the launch (and

mining operation) of Ethereum’s own

blockchain, expected in the first quarter

of 2015 as of November 2014.

The announcement was a sign of the

dynamism in the space and the rapid

innovation that open source software

enables (like most blockchain industry

projects, both Ethereum and

Counterparty’s software is all open

source). Any individual or any other

project can freely examine and work

with the code of other projects and bring

it into their own implementations. This

is the whole proposition of open source

software. It means that good ideas can

take seed more rapidly, become

standardized through iteration, and be

improved through the scrutiny and

contributions of others. Ethereum and

Counterparty both have deep visions for

the future architecture of blockchain

technology and decentralization, and

establishing the infrastructural layers

early in the process can help everyone

progress to the next levels. 64 Given the

functionality fungibility across some of

the many protocols and platforms in the

blockchain industry, perhaps the biggest

question is what kinds of value-added

services will be built atop these

infrastructural layers; that is, what is the

Netscape, Amazon, and Uber of the

future?

Dapps, DAOs, DACs, and DASs:

Increasingly Autonomous Smart

Contracts

We can now see a progression

trajectory. The first classes of

blockchain applications are currency

transactions; then all manner of financial

transactions; then smart property, which

instantiates all hard assets (house, car)

and soft assets (IP) as digital assets; then

government document registries, legal

attestation, notary, and IP services; and

finally, smart contracts that can invoke

all of these digital asset types. Over

time, smart contracts could become

extremely complex and autonomous.

Dapps, DAOs, DACs, DASs, automatic

markets, and tradenets are some of the

more intricate concepts being envisioned

for later-stage blockchain deployments.

Keeping the description here at a

summary level, the general idea is that

with smart contracts (Blockchain 2.0;

more complex transactions than those

related to payments and currency

transfer), there could be an increasing

progression in the autonomy by which

smart contracts operate. The simplest

smart contract might be a bet between

two parties about the maximum

temperature tomorrow. Tomorrow, the

contract could be automatically

completed by a software program

checking the official temperature reading

(from a prespecified external source or

oracle (in this example, perhaps

Weather.com), and transferring the

Bitcoin amount held in escrow from the

loser to the winner’s account.

Dapps

Dapps, DAOs, DACs, and DASs are

abbreviated terms for decentralized

applications, decentralized autonomous

organizations, decentralized autonomous

corporations, and decentralized

autonomous societies, respectively.

Essentially this group connotes a

potential progression to increasingly

complex and automated smart contracts

that become more like self-contained

entities, conducting preprogrammed and

eventually self-programmed operations

linked to a blockchain. In some sense the

whole wave of Blockchain 2.0 protocols

is Dapps (distributed applications), as is

Blockchain 1.0 (the blockchain is a

Dapp that maintains a public transaction

ledger). Different parties have different

definitions of what constitutes a Dapp.

For example, Ethereum defines a smart

contract/Dapp as a transaction protocol

that executes the terms of a contract or

group of contracts on a cryptographic

blockchain. 65

Our working definition of a Dapp is an

application that runs on a network in a

distributed fashion with participant

information securely (and possibly

pseudonymously) protected and

operation execution decentralized across

network nodes. Some current examples

are listed in Table 2-4. There is

OpenBazaar (a decentralized Craigslist),

LaZooz (a decentralized Uber), Twister

(a decentralized Twitter), Bitmessage

(decentralized SMS), and Storj

(decentralized file storage).

Table 2-4. Sample list of Dapps

Project name and

Activity

URL

OpenBazaar

Buy/sell items

https://openbazaar.org/

in local physical

world

LaZooz

Ridesharing,

http://lazooz.org/

including Zooz,

a proof-of-

movement coin

Twister

Social

http://twister.net.co/

networking,

peer-to-peer

microblogging66

Gems

Social

http://getgems.org/

networking,

token-based

social

messaging

Bitmessage

Secure

https://bitmessage.org

messaging

(individual or

broadcast)

Storj

File storage

http://storj.io/

Swarm

Cryptocurrency

https://www.swarm.co/

crowdfunding

Koinify

platforms

https://koinify.com/

bitFlyer

http://fundflyer.bitflyer.jp/

In a collaborative white paper, another

group offers a stronger-form definition