“If a government isn't integrating blockchain technology in the next 5 or 10 years, not only will they be obsolete, but their currency will be gone.”
- David Johnston
In the latest episode of Epicenter Bitcoin, Brian Fabian Crain and Sebastien Couture were joined by David Johnston. David is the Co-founder of BitAngels, a board member of the Mastercoin Foundationand serves as Managing Director of DApps Fund, which has invested in decentralized applications like MaidSafe, Factom and Storj.
He got the Bitcoin bug in 2012 and, soon after, made the decision to convert all of his fiat currency to Bitcoin. It took him 4 months to do this, but this painful experience allowed him to grasp the problems with the current financial system and only reinforced his desire to make a career switch to Bitcoin.
His first real encounter with the Bitcoin community was at the Bitcoin Foundation conference in May of 2013. When he realized that there was no Bitcoin angel investor group at the time, he co-founded the BitAngels network. It soon became the world’s largest Bitcoin angel investor group with 500+ members and has invested over US$7M in its first year of existence.
“Everything that can be decentralized will be decentralized.”
Originally coined at CoinSummit in San Francisco, the basic premise of Johnston's Law is that technology is subject to mechanisms similar to those observed in the evolution of species. In a process of natural selection, over time as systems compete, only the most efficient one survives.
Many believe that centralized systems are inherently more efficient. But David Johnston dismisses this argument:
"Centralized systems work, until they don't."
We can look at the ban on payments to WikiLeaks by major financial institutions as one example of were a private centralized system has exercised power to enforce political agendas.
DApps, according to Johnston, mean that no corporation is necessary to distribute wealth to those creating value in the system. Thus, middlemen are eliminated. And although they are currently limited to things of quantifiable nature like cloud storage, computational power, bandwidth and transportation, DApps, he feels, will eventually disrupt every industry as they allow us to write business logic into code.
“This is not a 20-year revolution like the Internet. It's an 8 to 10 year revolution.”
- David Johnston
In collaboration with others in the cryptocurrency space, David has written a white paper titled "The General Theory of Decentralized Applications, DApps". The paper establishes a framework to define and classify DApps, introduces terminology and nomenclature and proposes best practices. David has also written a paper which defines transparent and ethical practices for the sale and distribution digital tokens.
With regards to the legal status of decentralized applications, David Johnston thinks that the “product pre-sale” approach utilized by Ethereum and other Bitcoin 2.0 protocols will succeed. “From a purely technological perspective, a private key is nothing more than a password, which allows you to access a piece of software, with no dividends, revenues, or promises of future returns.” But to prevail with this approach, regulatory agencies need to be educated as they are starting to pay attention to DApps.
“When you use rough analogies like shares or corporations, you're bringing in a whole legacy context of ideas and norms that people are used to and that don't really apply to this new ecosystem. So we have to invent new terminology.”
- David Johnston
Epicenter Bitcoin is a podcast about the technologies, projects & startups driving decentralization and the global cryptocurrency revolution. Every week hosts Brian Fabian Crain and Sebastien Couture talk to some of the most influential people in the cryptocurrency space about their projects and get their perspectives on recent events. Their guests, who range from entrepreneurs to academics, to industry experts, join the conversation from different locations around the globe, which gives EB a truly international scope.
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