Many indicators are revealing that our civilization stands at the threshold of a new, all-encompassing technological revolution. One of them is the advent of the “Programmable Economy.” This is the term Gartner Inc. has created to warn policy makers and business leaders of the upcoming, far-reaching transformation of the global economy. In this context, as the Internet of Things (IoT) becomes more pervasive, with millions of interconnected devices capable of performing financial transactions, our monetary system needs to be reinvented. Gartner has alerted us to the fact that the success or failure of the programmable economy will depend on the monetization of “things.”
Bitcoin Can Help Monetize “Things.”
Certainly, the full potential of the programmable economy won’t be achieved with 20th century technology. We will not be able to implement these transformations with the obsolete, cumbersome and expensive transaction payment systems currently in place. Absolutely, we need to reinvent and change these antiquated payment systems. Indeed, we need a new business reengineering revolution.
As defined by Gartner, “The programmable economy,” enabled by a combination of “smart” technologies and distributed computational resources evolving from the blockchain, represents a massive transformation of the global economic system.
Mr. David Furlonger, VP and Garnet Fellow, acknowledges the need for radical change when he stresses that monetization is a critical missing component to the Internet of Things (IoT). And, he predicts, “Success or failure with IoT will only be achieved via the development of a new economic platform and monetary operating model. Monetized ‘things’ will, therefore, redefine the economy.”
So, it is in this context that Bitcoin’s pertinent attributes should be taken into account. Specifically, Bitcoin and the blockchain technology offer transparency, decentralization, low transaction costs, resiliency, trustworthiness, and efficiency.
The Programmable Economy and the Blockchain
The concept of the programmable economy is further explained as “the aggregate of solutions built on a digital currency platform that enables entities to incorporate full-strength programming constructs, including smart property, self-enforcing contracts and decentralized autonomous corporations,” according to Ray Valdes, Gartner’s Research VP.
These concepts were explained during presentations about peer-to-peer digital currencies and meta-coin platforms, which took place at the October 2015 Gartner Symposium in Orlando, FL.
The Gartner team also affirms that the programmable economy will be enabled by metacoin platforms. Metacoins are a form of alt coins that use protocol layers implemented on top of the Bitcoin’s blockchain.
In this regard, Gartner should not discard the fact that Bitcoin and its blockchain have already been demonstrated to be superior to other existing altcoins or alt-chains. For example, unique elements of the superiority of Bitcoin and the blockchain reside on the secure, distributed consensus based on proof of work. Most importantly, security and financial privacy are critical. In fact, the intrinsic security and pseudonymity properties of Bitcoin and the blockchain technology, combined with other technologies, particularly with anonymous communications, can provide a substantial degree of personal data protection of all participants in the programmable economy.
The Internet of Things and Bitcoin
Additionally, Gartner brings into the mix another concept, Digital business: “The creation of new business designs by blurring the digital and physical worlds.” Digital business is the dynamic between people, business and the Internet of Things (IoT) interacting together.
In this new environment, the all-pervasive presence of IoT makes digital business unique. IoT encompasses all sort of electronic devices, which are interconnected. Many of these devices will need to process high frequency payments of very small dollar amounts.
So, farther from being in a post-Bitcoin era, as suggested by Gartner, Bitcoin and the blockchain technology are indeed most relevant regarding the processing of micropayments cheaply.
In fact, a lot is happening for Bitcoin and the blockchain. For instance, heavyweight entrepreneurs continue to join the Bitcoin ecosystem in substantial numbers. Similarly, venture capital continues to flow. According to Tomasz Tunguz, “Bitcoin is the fastest growing area of startup investment in 2015.” Recently, a financial services start up, R3 CEV, began leading an effort in which the world’s biggest banks are joining forces to create a set of standards for the use of blockchain technology. These banks are Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, JPMorgan, State Street, Royal Bank of Scotland, and UBS.
Bitcoin and Micropayments
Because of Bitcoin’s inherent capacity to process micropayments cheaply, it is well-suited to be integrated into IoT devices for decentralized payment purposes. In this context, technological innovations are constantly taking place in the Bitcoin space.
For example, in collaboration with Cryptotronix, TilePay is to launch a free application to enable decentralized payments to IoT devices using bitcoins. An interesting feature of TilePay is that “With TilePay it is possible to pay for real-time access to IoT sensors using micropayment,” says, Josh Dakto, founder of Cryptotronix.
Another example of the latest bitcoin micropayment innovations is the 21 Bitcoin Computer. It was recently announced as the first computer with native hardware and software support for the Bitcoin protocol. The 21 Bitcoin Computer allows users to “Buy digital goods with the constant stream of bitcoin mined by a 21 Bitcoin Chip; sell anything to anyone for bitcoin with the built-in 21 Micropayments Server; and easily build bitcoin-payable apps, services, and devices.”
And, let’s not forget about wearables, which are a growing component of the IoT. Wearables are electronic “devices that can be worn on the body, either as an accessory or as part of material used in clothing.” Because these devices can connect to the Internet, they can exchange data and perform payments.
Incidentally, in the field of wearables, Bitcoin is also at the heart of exciting innovations in payment technology. One thrilling example is EAZE’s Nod to Pay application. This is a wearable electronic wallet that uses Google glass technology to allow users to pay with bitcoins by just nodding. You can now download the Nod to Pay beta release here.
Bitcoin and the blockchain technology innovations are enabling greater integration with the Internet of Things. It is clear that the transformation to the programmable economy hinges on the establishment of an agile, manageable, international and low-cost global currency. The good news is that, amazingly, Bitcoin offers exactly these attributes. Therefore, Bitcoin is the most suitable digital currency to enable this exciting new economy: cashless, secure, borderless, and decentralized.
What are your thoughts on the future of Bitcoin in the programmable economy? Let us know in the comments below!
Images courtesy of Pixabay.