The Evolution of Cryptocurrency Roles
Hello! Iam Daniil Kapran, a sales manager at Platinum. Our team of professionals offers a complete set of services for your successful ICO or STO. We are self-confident because of our huge experience in ICO and STO advertising and promotion. Besides, there are more than 700 successful companies’ promotions behind us. See for yourself: Platinum.fund We also launched the best online institution in teaching crypto economics! You will know everything about best security tokens in 2019, learn all about ICO and STO promotion and become real professionals after finishing our courses! How the original roles in the blockchain industry have evolved up to this day? Read this article to get the answer!
Cryptocurrency Miners
When people first hear about mining cryptocurrency it is natural to think of big drills and rock crushers. Of course it is different than that.
What happens in cryptocurrency mining?
Bitcoins exist in a protocol design, but the bitcoins need to be brought to light, or brought into being through a series of mathematical computations. This is similar to gold existing underground, but if we want it we need to explore for it, find it, and then dig it out. Another similarity to gold and gold mining is the scarcity of bitcoin. There are only 21 million Bitcoins which can possibly exist.
Why would someone want to mine cryptocurrencies?
The simple answer is for a reward, which is paid in the form of Bitcoins.
A miner must run what is called a “node” in order to do the mining and earn the reward. A node is a powerful computer that runs the bitcoin software and helps keep the blockchain network functioning by participating in the relay of information. Anyone is able to run a node. A miner simply needs to download the free software and leave a certain port open. Mining nodes solve complex mathematical functions and add the correct answer to the block. Miners are rewarded for their ability to solve and complete blocks as well as verify transactions on the network. It is far more complex than this, but this is the general principle.
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“Cryptocurrency Miners §2
How has the role of miners changed?
Mining bitcoin is an extremely energy-intensive process. In the very beginning miners would work to solve cryptographic puzzles for blocks, and to confirm transactions on their own. Bitcoin was not very popular, and most people simply mined for leisure or intellectual interest. No one really knew how much bitcoin would appreciate in the future.
Maybe you remember the story about James Howells, who mined 7,500 bitcoins and forgot about them on his hard disk. The hard disk ended up in the trash can and later into a landfill in Newport, under tons of garbage. Other home miners did not care much about how they stored their BTC before the coin gained such massive popularity and value.
What caused this change?
As more and more bitcoins have been mined, the computations have gotten harder and harder, meaning more and more energy is required to perform the computations. This has led to the emergence of pool mining and the decline of home mining. The popularity of bitcoin has soared, and the difficulty of the problems needing to be solved has increased dramatically.
What does the future look like for miners?
Home mining is likely to remain a thing of the past. Larger commercial scale mining setups are likely to become more common place as the industry consolidates further. Tremendous scale is required to endure the volatility of the cryptocurrency industry. Home miners are not likely able to scale up for the intensity of this kind of competition.
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“The Emergence of New Roles in Cryptocurrency Industry
The blockchain industry has evolved from the simpler early days with some people mining and verifying transactions, and some other people investing in cryptocurrency. Now there are thousands of professionals working in a much more complicated industry. These professionals can be broadly grouped into ten key roles.
We have already discussed the basic roles that exist in the cryptocurrency space from the perspective of Bitcoin and other fundamental tokens. Now we will move on to a more focused discussion about the entire spectrum of roles in the blockchain industry today. The roles that facilitate everything from ICOs, to market making, to exchanges; from where they are now, and to where they will be in the future
Ethereum, Smart Contracts and Dapps
In order to understand the roles that have developed in the blockchain industry, we need to examine the underlying technology again. Ethereum is second only to Bitcoin from the perspective of market capitalization and popularity. Like many other altcoins created to address inherent weaknesses in Bitcoin, Ethereum was created to be better and faster.
In the words of Ethereum co-founder, Vitalik Buterin:
I thought [those in the Bitcoin community] weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each [use case] in a sort of Swiss Army knife protocol.”
Ever since Ethereum was developed in 2015, the role of the underlying blockchain technology and potential applications upon that technology have been absolutely amazing. We will now discuss some of those applications.
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“Ethereum, Smart Contracts and Dapps
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The Ethereum Virtual Machine
One of Ethereum’s core innovations is that its software enables developers to run programs with any programming language on the network. This makes the process of creating blockchain applications much easier, faster, and more efficient than before. Developers had to build an entirely new blockchain to run their application before, but now they can develop different applications on the Ethereum blockchain. These applications are referred to as Dapps.
Developers using the Ethereum Virtual Machine can build and deploy numerous decentralized applications, hence decentralizing many services across many sectors.
This development has made the work of developers in the cryptocurrency space more efficient and quite rapid too. As a result, the majority of new cryptocurrencies are now built on the Ethereum network.
Other than Dapps, the Ethereum blockchain has also been used to create decentralized autonomous organizations (DAO).
A DAO consists of one or more contracts and could be funded by a group of like-minded individuals. A DAO operates completely transparently and completely independently of any human intervention, including its original creators. A DAO will stay on the network as long as it covers its survival costs and provides a useful service to its customer base” Stephen Tual, Slock.it Founder, former CCO Ethereum
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“Ethereum, Smart Contracts and Dapps
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Other than Dapps, the Ethereum blockchain has also been used to create decentralized autonomous organizations (DAO).
A DAO consists of one or more contracts and could be funded by a group of like-minded individuals. A DAO operates completely transparently and completely independently of any human intervention, including its original creators. A DAO will stay on the network as long as it covers its survival costs and provides a useful service to its customer base” Stephen Tual, Slock.it Founder, former CCO Ethereum
How has the Ethereum network changed the role of developers in the cryptocurrency space?
It is obvious from the above quote that Ethereum has made it very easy for developers to build and launch Dapps, DAOs and Smart Contracts on the network. You can say that it now takes less genius to create a cryptocurrency, thanks to Ethereum.
What are we likely to see in the future?
The roles of developers in the cryptocurrency space will keep evolving and perhaps become less complex with time. There are numerous online courses offering training for developers, as the remuneration for this function is becoming increasingly lucrative. But like with many other things, it is also a question of survival of the fittest. The competition will be fierce, and the urge to survive will be intense. The best developers may come up with something we cannot even imagine now, and better than what we currently have.
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“Notable Personalities within the Cryptocurrency Industry
Vitalik Buterin – Programmer and Entrepreneur
The well-known genius behind the Ethereum project is a young scientist and entrepreneur named Vitalik Buterin. His unique contribution, through the Ethereum project, has transformed the blockchain industry since the project took off in 2015.
Ethereum has allowed for the development of Dapps and smart contracts which have revolutionized many blockchain projects. It is currently the second largest cryptocurrency in terms of transaction volumes.
Nick Szabo
He has been referred to as the secret cryptocurrency pioneer. He is responsible for coining the term “smart contracts” in 1996, and he is also behind an earlier blockchain innovation – Bitgold. He first came to attention in 1996 after his publication of Smart contracts: Building blocks for digital free markets.
John McAfee
He is both hated and loved in the cryptocurrency industry in equal measure. McAfee, a software tycoon, is heavily invested in cryptocurrencies, and was for a while, the “voice of judgement” to determine which ICOs or coins to invest in. Investors waited for his tweet before they invested their money. John McAfee’s tweets have played an outsized role in shaping the cryptocurrency space, especially in promoting ICOs and popularizing certain coins.
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“Notable Personalities within the Cryptocurrency Industry §2
Hal Finney
He is second only to Satoshi Nakamoto when it comes to using bitcoin as a payment method, having actually received the first bitcoin payment from Satoshi himself. He has also been “accused” of being the real identity of Satoshi Nakamoto. Hal Finney has made milestone contributions to the development of cryptocurrencies. Finney was a cryptography activist and regularly posted on cypherpunks. In 2004, he created the first reusable proof of work system, before bitcoin.
The DAO hacker
This anonymous person (or group) has made a significant impact on cryptocurrency by managing to hack into the Ethereum network. The DAO hack resulted in the split of the Ethereum network, leading to the emergence of Ethereum classic. As much as this was a bad thing for several reasons, it has also served as a learning experience for the future; smart contracts are not infallible if a flaw can be introduced into the code.
Contrasts between Blockchain & Traditional Roles
The disruptive technology behind cryptocurrency is making an impact across diverse industries, affecting jobs in different ways. We will examine some traditional roles to see how they have evolved to function inside the blockchain industry. And we will see how some other traditional-world roles simply cannot exist in the blockchain space at all.
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“Traditional Roles which will evolve
Realtors
Once they get a willing buyer or seller to service, the bulk of work that a realtor does is paper work. With Blockchain technology, the paperwork will be largely eliminated.
The role of realtors is likely to change in many ways similar to that of stockbrokers. Their role will become focused on facilitating or assisting individuals make complex decisions as opposed to just facilitating the transaction.
SMARTRealty is a blockchain startup that is transitioning the real estate business to the blockchain. To the degree that paperwork is eliminated or significantly reduced, the process of buying and selling a house will be made much faster. The verification and transfer process will be swift and secure with records immutably stored on the blockchain.
The blockchain will also allow for a trustless system where potential home buyers and sellers can interact directly without the need for a trusted intermediary.
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“Traditional Roles which will evolve
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Banking Roles
Research has shown that millions of people in the undeveloped world remain largely unbanked. Many developing nations suffer from unstable governments which lead to unstable national currencies and unreliable legal frameworks. This may in fact be the population group that needs cryptocurrencies more than anyone.
Banking roles have largely become digitized in the modern globalized economy. All roles in the banking industry will likely further become focused upon the specific value added by each role. There will be less of a focus on pushing paperwork and a greater focus on providing a unique and discernable service to their customers.
In third world countries with multitudes of unbanked individuals, the blockchain technology will allow those countries to start fresh, leapfrog ahead, and remove many of the grievances and friction points which presently plague their financial systems.
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“Traditional Roles which will evolve
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Supply Chain Management
In the past, it has been the duty of supply chain managers to record and track goods or services through the entire process from creation to their ultimate destination. This has been an arduous task, especially when the supply chain is prolonged, complicated and indirect. Blockchain startups have been created to tackle this challenge. The blockchain offers indisputably superior supply chain management as it greatly reduces delays, eliminates human error, is cheaper to use, and much easier to monitor.
This role will therefore be forced to evolve to one of mostly management and troubleshooting issues along the supply journey.
Records Management
Records Management is a supportive yet vital role in many institutions. Record managers are tasked with responsibility to ensure the integrity of records both manually and electronically. The blockchain is one large immutable and tamper proof ledger. What better record could anyone possibly ask for? As more and more industries integrate blockchain into their operations, there will be less and less need to employ record managers to maintain records and ensure their integrity.
Record Managers are likely to be one of the roles actually made obsolete as a result of the blockchain technology. The value they currently add to a business transaction will be rendered useless, and there does not appear to be any similar or adjacent role for these people to fill.
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“Traditional Roles which will evolve §3
Retail Roles
The Retail business contains many roles from the front to the back end. The front end of the retail business should survive because they provide a special face-to-face service to customers. The back end of the retail operation however is a different story. Everything from supply chain management to accounts is likely to become obsolete. Blockchain technology will not only fundamentally redefine those roles but it will also dramatically reduce the workforce required to carry out the remaining functions.
Openbazaar is one blockchain startup that is trying to create a trustless system that will allow manufacturers and buyers to connect without a middleman.
The roles in the retail industry are likely to further move toward providing personal service and creating unique value-added experiences. Roles which are largely administrative and indistinguishable from one firm to another will become obsolete or at least dramatically leaner with time.
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