Issue 22: Your Blockchain is Full
Welcome to Backstory, a weekly newsletter turning global technology shifts into a three-minute read. With the surprising news about Ethereum, we’re thinking about digital ledgers running out of room this week – Joseph Dana, Senior Editor
THE BIG TAKE
Your Blockchain is Full
What happens when innovative technologies fail to deliver on their basic promise? Imagine a smartphone unable to place phone calls or a laptop without a battery that could last more than ten minutes. Ethereum, the popular blockchain platform widely used for smart contracts, is facing this conundrum. Ethereum co-founder Vitalik Buterin said that his creation was close to 90 per cent capacity and as a result, the cost of processing transactions on the blockchain will soon be prohibitively expensive due to the lack of space.
Double-edge sword: Ethereum's troubles stem from the popularity of its technology. It has been touted as a better alternative to Bitcoin because Ethereum enables users to automate tasks and set up autonomous corporations that run themselves via software. The result is that Ethereum's digital ledger is clogged with digital games such as CyprtoKitties (which has been removed) and several crypto coins that have turned out to be scams.
Bigger players: The problem the blockchain is facing is one of scale. Just before the news broke about Ethereum's capacity woes, leading central bankers met in Jackson Hole. Bank of England governor Mark Carney told the bankers it is time to look for a digital alternative to the US dollar. Indeed, it is time for nations to start embracing the power of blockchain. The backing of powerful countries could resolve Ethereum's capacity issues and perhaps provide some calm to tattered financial markets at the same time.
QUOTE OF THE WEEK
“In order to have a decentralised database, you need to have security. In order to have security, you need to have incentives."
Vitalik Buterin, Ethereum co-founder
OUR VIEWS THIS WEEK
Fresh approach: The Business Roundtable, one of the most influential private sector organisations in the US, updated its mission statement last week. For the first time, the group, which includes the country’s leading CEOs, said that the wellbeing of workers, local communities, and suppliers should be part of the ultimate goal of a business. We explored the implications of this shift and how wellness and health are starting to factor heavily in the global economy.
Strong alliances: It has been a significant couple of weeks in regional diplomacy. After an official state visit to China HRH Sheikh Mohamed Bin Zayed, Crown Prince of Abu Dhabi, welcomed Indian Prime Minister Narendra Modi to the UAE. New Delhi and Beijing are widely understood to be leading the transformation in emerging markets. We unpacked the visits to show how the UAE is at the centre of the defining developments happening in this space.
SPOTTED ELSEWHERE
Emotions in the city: Some say the city knows everything about its residents. In fact, city governments around the world are now tapping into social media streams to find out what residents feel and what’s happening around town. Axios outlined how several startups are using AI to analyse resident sentiment. The data can then be used to address common concerns and possibly dictate how resources are used.
Be careful out there: LinkedIn is so popular that it is now being used by foreign intelligence agencies to gain information and even recruit spies. The New York Times revealed how China and North Korea have been posing as employees on the popular social media platform to recruit agents. Next time you get an offer that is too good to be true on LinkedIn, best to do some extra homework.