The moment you take incentive (bitcoin) out of the equation, whole blockchain will lose its strenght.
You can not take out greed^H^H^Hincentive out of the picture.
p.s. this is black and white written in bitcoin whitepaper.
Follow this:
- The core technology here is a crypto-backed distributed ledger. We call this the 'blockchain'.
- You need a unit of trust to enable the blockchain to work. We call this unit of trust a 'bitcoin', or to be more precise, the smallest divisible unit thereof. (1 Satoshi = 0.00000001 BTC)
- These units of trust have value, which also gives you incentive to create ('mine') them.
If we stop here, that's all well and good. The problem with 'bitcoin' and the currency argument is that we're basically going back to the barter system. Instead of gold or foodstuffs, we're trading one good (a unit of trust) for another (whatever you're buying with BTC). Then, on top of that (and as a result), we've created a speculative commodities market in BTC. There's no true scarcity here.
This is why the arguments get so confusing. I could transfer any currency on the blockchain and get the so-called benefits of bitcoin: immutable transactions, low transaction costs, etc.
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Then you also get gems like this, from the article:
A more radical idea is to use digital currency, issued
and supervised by the central bank, at the retail level
to replace physical cash.
If you really think that, you don't understand bitcoin.
How do you load your USD on to this hypothetical block chain? How do you prove you destroyed the physical notes? Is there a mechanism to turn it back into physical notes? How do you hand out a block reward without creating counterfeit USD?
For bitcoin to work, it needs to be its own currency.
So to answer your question, a couple points:
0. You can use the blockchain without bitcoin as the token of choice. You create your own limited tokens and go from there. This has already happened with various altcoins.
1. You can create private chains. Bitcoin mining and the associated value (currency) therein is one way to create a (public) ledger, but not the only way.
2. You don't 'load your USD' onto the blockchain. That ignores the point of a distributed ledger.
Emphasis on that last word, because what we're talking about here is a trusted record of transactions. That's why the blockchain isn't just about currency, and gives participants a way to immutably record all kinds of things.
How does the first $1 come to exist on your ledger?
Are you thinking of something like Tether?
Bitcoin is not the only incentive that can be had in implementing blockchain technology.
There are a number of very promising use cases for blockchain, in education, healthcare, energy... none of which involve bitcoin at all.
If you want to do interesting things with a trust-less, decentralized system, you need the mining and mining rewards.
Mining allows for high value transactions in a low trust environment, but lower value transactions are very possible without that.
IMO Tit for Tat is a much more interesting form of consensus building as it can be very low resource. But it's really all about the goals not the protocol.
I'm not asking for dissertations but could someone briefly explain how any of these problems/industries will be effected by blockchain.
This assumes that the compute power of the miners who are left after the incentive is gone will not be sufficient to prevent attacks.
It also assumes that the miners who quit, whose hardware would seemingly be ripe for use in attacks, would have no other purpose to use it for, such as another cryptocurrency.
FWIW I'd also point out that I would not be surprised if a fork were to occur that prolonged the incentive. Consider the finite incentive something that was necessary to create the initial coordination among participants in Bitcoin, but once it reaches sufficient scale if continuing to have an incentive benefits the ecosystem then surely it will (by then).
But then the value would go low enough that the fees wouldn't be that bad and miners would probably still get their worth from it. It would be a strange blockchain though :/