The bitcoin blockchain is not just going to change the way money works on the Internet (and off). It’s going to change the way Internet applications are built. We have been working hard to understand how things are going to look in five to ten years and Joel Monegro has been providing much of that thought leadership inside our firm.
Since we are not into keeping our insights to ourselves, we have encouraged Joel to publish all of our work in this area (and every area). And today Joel has posted something that is really important and needs to be understood by every Internet/mobile entrepreneur, investor, developer, employee, and analyst. It is the blockchain stack and it looks like this.
The most important things to understand about this blockchain stack are the overlay networks (most of which are still emerging), and the shared data layer and the shared protocol layer. Please read Joel’s post which describes each of these in some detail.
What is most important about this emerging stack is, in Joel’s words,
This imposes a very interesting set of challenges for developers, entrepreneurs, and investors as so much of the value in the current Internet stack will be commoditized by this architecture.
Differentiation and defensibility and network effects will be much harder to obtain with this architecture. Most things will work like email. Take your keys from one app to another and all your data and relationships come with it.
Fun times are ahead. Time to put your seat belt on.