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“The blockchain economy will be even bigger than the web economy in the next couple of years,” he told the European Identity & Cloud Conference 2017 in Munich.
According to Mougayar, money is one area the web has not tackled in a “native” way, with most money transactions still going through banks rather than being peer to peer (P2P) in nature.
“The banks have led us to believe that we still need them, but in reality they are just updating each other’s ledgers,” he said, pointing out that this is what blockchain technology enables, but without the need for a third party such as a bank.
The best-known application of blockchain technology is bitcoin, which Mougayar said “at its core” is really about P2P transmission of value, with cryptology being a critical component that secures both the stored data as well as securing and validating transactions.
Bitcoin and other cryptocurrencies, he believes, will become an increasingly popular way of transferring value, with up to 900 different cryptocurrencies available already.
Blockchain is also about new, emerging P2P infrastructure that is truly decentralised, said Mougayar, in contrast to many web-based applications such as Facebook that have not remained true to the original decentralised concept of the World Wide Web.
Blockchain, he said, provides a clear and quick way of getting transactions settled without involving a third party. “If you were to dumb it down, the blockchain is a just series of API [application program interface] calls to verify something – a settlement, an identity. But because it is immutable and each transaction just adds to what has gone before, transaction history remains intact. It is an excellent record-keeping technology,” he said.
Cryptocurrencies go beyond money use
Cryptocurrencies, said Mougayar, are not just about money. “They can represent a function, work and attention, which means new companies publishing user content could compensate users by enabling them to earn tokens for giving attention to content or attracting attention to content.
“This means users could earn cryptocurrency that can be exchanged for goods and services, which is already being implemented by companies such as Steemit, where everyone gets paid for creating and curating content,” he said.
Most of what has been happening around blockchain has been about the development of the core, which has been a largely “technical story,” said Mougayar.
“A lot of the activity is very technical, about the nuts and bolts of the infrastructure, but we are now going to get more into the app development and the story is going to be more about the applications, which is how the web started. First we had to get the infrastructure and the standards, and then the applications came,” he said.
Developers should prepare for ‘inevitable’ blockchain change
Mougayar urged organisations to encourage their developers to learn blockchain languages in preparation for the changes that he sees as inevitable.
“The fact that there currently around 10 million Java developers in the world and only 30,000 blockchain developers tells you were we are and where we need to be,” he said.
Standards are very important in the era of technology, said Mougayar, and although there are only few blockchain-standards, the ERC20 standard for issuing tokens or cryptocurrency is an important one because it is the main reason so many ICOs and cryptocurrencies exist. “When you put standards in the market, adoption skyrockets,” he said.
However, Mougayar cautioned against trying to regulate the blockchain prematurely for fear of stifling innovation around this technology. “Blockchain is just a baby right now. Let’s wait until it grows to be an adult, and then we can regulate it,” he said.
Going forward, he said, the blockchain is going to disrupt the database, a new type of virtual environment is going to emerge, there will be a new way of proving the identity of people and the ownership of value, and tokens and smart contracts will become the new language.
“We will enter the new blockchain economy in the same way that we entered the web economy 20 years ago,” said Mougayar.
Read more about blockchain
- UAE bank becomes the latest to test out the potential of blockchain technology for improving financial services processes.
- A global banking consortium, including Barclays, Royal Bank of Scotland and HSBC in the UK, has completed cloud-based tests of five different blockchain technologies.
- At 2016’s Sibos event, one word more than any other reverberated throughout Singapore’s Marina Bay conference centre: blockchain.