Jeff Garzik: Bitcoin Is Moving to New Growth Stage With Cross-Chain Smart Contracts
Jeff Garzik is one of the most respected developers in the Bitcoin industry. He has been a Bitcoin core developer and has worked for various other companies, such as BitPay. Recently, he started his own blockchain-as-a-service firm, Bloq, which will serve enterprise clients who wish to develop stems on a private, public or confederated blockchain.
In a recent discussion with Bitcoin Magazine, Garzik expressed his belief that, currently, blockchain technology is moving from Step Three to Step Four in a model he crafted.
“Step One is digital currency, the very first use case of blockchain,” Garzik said.
That means Step One in the evolution of blockchain technology, as Garzik explains it, is obviously Bitcoin. Bitcoin, introduced in 2008, has caught the imagination of large swaths of the collective imagination, from major financial institutions to hackers in their mom’s basements.
Step Two, which, according to Garzik, Bitcoin has already surpassed, includes companies researching how digital currencies ‒ or tokens ‒ can be used in interbank transfers. Financial institutions are doing this in order to make the modern methods of money transmission more efficient.
While credit cards and debit cards work well, people lament the need still for paper checks or wire transfers, which can take days. Moreover, the latter costs a large percentage of the overall transfer.
As Garzik puts it: “Step Two is digital assets, where you have financial institutions putting digital assets on the blockchain.”
“Step Three is smart properties,” Garzik said. “Putting physical assets on a blockchain, whether it’s a jet, a boat, a plane, real estate or something like that.” This phase has been theorized about for years and the mainstream media is undoubtedly catching on to things like how the Internet of Things (IoT) and blockchain can unite to power the cities of the future. For many, this comes down to managing property on the blockchain.
Smart property refers to ownership determined by blockchains with smart contracts. Smart property can also include shares in a company or access rights to a software or computer. Smart property streamlines the ownership process, diminishing the chances for fraud and reducing mediation costs.
Nick Szabo first introduced the notion of smart property in his 1998 paper, “The Idea of Smart Contracts.”
The blockchain industry ‒ which in Garzik’s mind includes at its heart the Bitcoin technology ‒ is moving into an exciting phase: Step Four.
“Step Four ties all of that together into a mesh network of cross-chain smart contracts that guard the assets and the assets mature,” Garzik said. “Really move beyond simple encryption needs for managing and securing assets. Right now, I think we are moving from Step Three to Step Four with some of the exciting things going on in the Ethereum community and similar technologies on the smart contract side. With Rootstock most notably, similar [things are] happening on the Bitcoin side as well.”
It’s this development that is “exciting to me in the very near term,” Garzik said.
Bloq recently launched its Blockchain Operating System, called BloqEnterprise, which is designed as an enterprise-grade blockchain backend with customer service. This “multi-pronged blockchain software solution is designed to give users the ability to create, update, customize and analyze their own public, private and permissioned blockchains.”
Garzik partnered with Matthew Roszak in November 2015 on Bloq.
“Open source is key to rapid innovation,” said Garzik, “and this has been true of both the early days of Linux and cryptocurrency. But at some point, there needs to be an enterprise-grade solution for a technology to be reliable enough to play in the Fortune 500. You can’t sit around and hope that unpaid volunteers come up with an update. Red Hat solved this problem for the Linux market, and Bloq will solve it for the blockchain.”