Blockchain and Distributed Web: Why You Should Care

When it comes to emerging technology, it’s often anyone’s guess what the future will hold. At IDEO U we are far from having a crystal ball and that’s why we advocate for “building to think” or, rather, making prototypes to learn how people react. To help get our heads around emerging tech, we invited our IDEO friends, IDEO CoLab, in for a Creative Confidence Series session about emerging tech (and why you should care).

CoLab is a new approach, a shared R&D (research and design) network that allows members to collaborate on and share in the benefits of new prototypes. As designers, CoLab views emerging technologies as new tools in our toolbox, and we can learn about these technologies by building prototypes. CoLab and their big-brained fellows are making hundreds of prototypes a year for their members to learn and test assumptions around the desirability, feasibility, and viability of new technologies. For example, with one CoLab member, the Nasdaq stock exchange, CoLab prototyped and is now piloting an internet connected solar panel that generates renewable energy credits. 

“The web is being rewritten from the inside out.”

In this first session, we sat down with CoLab’s Joe Gerber and Gavin McDermott to talk about the distributed web and blockchains and why it's important to experiment with these emerging technologies. Many people conflate blockchain technology and bitcoin, but as Joe and Gavin discussed, bitcoin is a digital currency and one small piece of a larger movement powered by blockchain technology and the distributed web. In this post, we’ll break down why, as Joe and Gavin say, the web is being rewritten from the inside out.  

First, some definitions:

  • Blockchains: Blockchains are peer-to-peer networks that log shared information about transactions. They're provable because the transaction is validated by a broad network of computers. Joe quoted Vitalik Buterin likening blockchains to “a database we all agree on.” The magic of blockchain technology is that it solves the problem of digital abundance and computers’ innate ability for infinite copying by creating scarcity, ensuring that only one copy of something exists.
  • Bitcoin: Bitcoin is a cryptocurrency that uses blockchain technology, but there are a number of different applications for blockchains including contracts (smart contracts) and other types of information.
  • Distributed web: A movement that's a complete reimagining of today’s internet infrastructure, it includes new and different protocols. We rely on protocols every day for things like email (simple mail transfer protocol, SMTP, allows Gmail, Yahoo Mail or Hotmail to all communicate) or for web browsing (hypertext transfer protocol, HTTP). In the distributed web, new peer-to-peer networks that do not rely on centralization are being built.

So, why should we care?

Joe and Gavin boiled down their thinking for why blockchain technology and the distributed web are so game-changing to three core principles:

1. People now have permission by default

To date, you’ve always had to ask some large entity to play in the economy. (For example, to get a bank account you might need a driver’s license or a birth certificate.) In this new situation, anyone can participate in the open system. Now there’s a generation growing up with the expectation of participation. Whether it be access to information or financial markets, with a distributed system it's more difficult for an entity (corporation or government) to exercise control.

The example that Joe and Gavin cited was the government of Turkey’s ruling to shut down Wikipedia in April 2017. A group of “hacktivists” used a new protocol called IPFS (InterPlanetary File System) to make an entire copy of the Turkish Wikipedia available and stored it in a distributed fashion. Typically, websites are stored in a central location using the HTTP protocol, but with IPFS, the files can be stored on computers in various locations. (Akin to a public Dropbox or similar to the very comical efforts of the fictional PiedPiper in the HBO television show Silicon Valley where they set out to create a new internet sharing across devices.)

2. Data flowing freely

Another change that Joe and Gavin cited as important and groundbreaking is a movement away from a controlled flow of information. Traditionally data has been the competitive moat for companies that they guard and protect using analytics and business intelligence to monetize. In the decentralized web of the future, data will likely flow more freely. Successful companies moving forward will be better off through the sharing of information, enabling better ecologies of systems. They'll be paying it forward by contributing value and gaining a competitive advantage from sharing. 

“If we were cave people and fire was just invented, half the people would think, this is amazing, we can cook food, we’re staying warm. The other half would say, there’s going to be wildfires raging and we’re all going to die. And they’re both right. Fire is neither good nor bad. It depends on how you use it and I think that’s true for all technologies, including blockchain.” 

—Joe Gerber, IDEO CoLab (paraphrasing Phil Libin)

3. New types of coordination

It’s likely that if you're reading this post, you're in a developed country with fairly established and somewhat trustworthy institutions. And these institutions have been necessary historically to coordinate over long distances. But for many people on the planet, trusting in their government to rein in inflation or corruption is not realistic. There may be significant benefits for applying blockchaintechnology in the developing world. In addition, there are billions that go to bank transfer fees each year in remittances to and from the US to Mexico or Europe to Africa that can be enabled without such fees. Joe also cited an example from Estonia where the government is using blockchain technology to secure government data and enable citizens more control over their healthcare and medical data.

These technologies are still in their early days of construction and the blueprints are changing every day. What Joe and Gavin would recommend is that you start to experiment and prototype with these technologies to test assumptions for how they could affect your business. Don’t get ready, get started.

Need to help your team explore new territory? Try out Leading for Creativity with IDEO CEO Tim Brown.


For More on CoLab and Prototyping 

How to Prototype a New Business

Using Prototypes to Shape Future Technologies

How to Move from an Idea to a Prototype

Upcoming Courses:

Designing for Change
Starts February 28

Leading for Creativity
Starts January 17

From Ideas to Action
Starts February 28

Insights for Innovation
January 17

Storytelling for Influence
Starts January 17