Harmony could be the Future of Blockchain
The platform Harmony could be the future of blockchain. Interestingly, the way Harmony operates shows us how they could build future blockchain platforms.
In essence, Harmony operates like a traditional Silicon Valley start-up rather than a typical blockchain project. For instance, Harmony’s developers are using classic venture capital funding; cash from wealthy backers, rather than an ICO to fund their operations. Specifically, the investment and advisory fund Lemniscap is financing Harmony’s R&D.
Tapping venture capital allows Harmony’s team to concentrate on building the technology rather than raising funds. Moreover, Harmony can avoid all the legal, ethical, and other problems an Initial Cryptocurrency Offering (ICO) creates. In particular, Harmony can avoid ownership questions and conflicts with regulators.
Importantly, Harmony’s team can focus on their primary mission of building a shardable and instantly scalable blockchain. Additionally, the building of a cryptocurrency and the melodrama of a token sale will not distract Harmony’s developers.
Is Harmony writing a new Business Plan for the Blockchain?
Harmony is following the disruptive business plan of building and perfecting the basic blockchain infrastructure before offering specific solutions. Hence, Harmony is reversing the typical blockchain startup operation.
To clarify, the typical blockchain startup business plan goes something like this: First, a promoter thinks up a specific blockchain solution like a new cryptocurrency, or a service he can sell on the blockchain.
Second, the promoter holds an ICO to get the money. Third, the promoter hires techs to develop the product. Fourth, the promoter markets the product and hopes somebody else has built the infrastructure the product needs to reach the market.
For example, a promoter designs a great blockchain-based game. However, average people have a way to access the game or play it. Plus, there is no good way for an ordinary person to pay for the game.
Additionally, most blockchain promoters do not consider fundamental concerns like the blockchain scalability problem. Instead, they hope somebody else will solve the problems for them.
Can Harmony Solve the Blockchain Scalability Problem?
Notably, Harmony’s team is trying to solve the blockchain scalability problem from the beginning. In fact, Harmony hopes to offer a scalable blockchain from the start.
Current blockchain technologies are slow and have small capacities because of encryption. To elaborate, all the encryption limits the size and speed of a blockchain.
Hence, the blockchain can only conduct a few transactions at a low speed. For example, Hackernoon’s Kenny Li estimates Bitcoin’s (BTC) speed at 4.6 transactions per second (TPS). Consequently, a Bitcoin-based payment solution could crash if processes over five payments at once.
Is Harmony Scalable?
Harmony’s blockchain offers a built-in scalability solution they call “shard chains.”
To clarify, a shard chain is a smaller independent blockchain that performs just one task. For example, a payment shard-chain only offers payment.
To elaborate a shard is a separate blockchain that breaks off from the main blockchain. Hence, a shardable blockchain could generate new blockchains from itself. Thet process’s similarity to broken glass or crystal inspires the terms shard, sharding, and shardable. To clarify, a shardable blockchain breaks into smaller pieces as operations expand.
Hence, Harmony is theoretically scalable because it creates a new shard chain for each new task, the Harmony whitepaper claims. Theoretically, shard chains can increase security. In theory, a hacker will have to crack a new shard chain every time he tries to steal Harmony data.
Moreover, the Harmony shard chains contain an adaptive threshold proof of stake (PoS) mechanism to identify owners. Theoretically, only an owner can access a blockchain construct a PoS mechanism protects.
Harmony’s New Blockchain Business Model
Harmony is constructing a blockchain platform with a built-in scalability problem solution. Essentially, Harmony is building the infrastructure before the solution.
For instance, Harmony has its Testnet 2.0 up and running but it is still planning its Harmony Token. Instead of holding an ICO, they are testing a Harmony Token in simulations, CEO Stephen Tse reveals.
Moreover, Harmony is signing up Node Operators for its blockchain ecosystem before launching a token or opening the system to the public. Hence, Harmony hopes to offer a blockchain ecosystem upon which users can do real stuff from the beginning.
For example, Harmony is working with games developer Animoca Brands as it builds its infrastructure. Animoca works with CryptoKitties developers Axiom Zen and Dapper Labs. In addition, Animoca owns the game rights to many popular characters; including He-Man, Ben 10, Kung Fu Panda, Astro Boy, Garfield, and Doraemon.
Thus, Harmony’s ecosystem could go live with a working token and games people can play from the beginning. However, Harmony seems to lack any working e-commerce solutions. On the other hand, Harmony hopes to solve this by offering a business-ready blockchain and shard chains from the beginning.
Harmony Does not want to Compete with Ethereum
Interestingly, Harmony is trying to avoid competition with Ethereum and all the platforms that use that blockchain.
Instead, they plan to offer a Harmony-Ethereum Bridge from the beginning. The Bridge is an API; application processing interface, that will connect the two ecosystems and allow Ethereum platform operators access to Harmony’s Shard Chains and Beacon Chains.
To explain, the Beacon Chain is a bigger and more secure version of the shard chain. The purpose of the Beacon Chains is to connect the Shard Chains, and I guess to connect shard cahins to other blockchains. Thus, a Beacon Chain could serve as a network for the shard chains. To see a full explanation read Harmony’s whitepaper.
By offering easy access to Ethereum, Harmony can work with all the existing Ethereum-platforms. Moreover, Harmony can offer those platforms’ services and products through its blockchain.
Will Harmony’s Business Model work?
For example, Harmony can offer access to Aitheon’s Artificial Intelligence marketplace and digibots, Bancor’s Liqudity Network, SyncFab’s manufacturing and machining services, and Yumerium’s games.
Thus, Harmony could offer a marketplace full of products from the beginning. Historically, this model worked for companies like eBay (NASDAQ: EBAY), Alibaba (NYSE: BABA), Amazon (NASDAQ: AMZN), and Google or Alphabet (NASDAQ: GOOG).
To explain, those companies did not create products or services. Instead, they operate platfroms that provide access to products or services created by others. For example, eBay offers an auction platform for sellers; and Alibaba and Amazon offer platforms for merchants to sell through.
This model works because it frees the developers to concentrate on the infrastructure rather than the products. In particular, it outsources chores like marketing, promotion, and customer service to the platform’s users.
However, the platform can make money by charging users a fee or rent. Hence, Harmony’s business model has history behind it.
The Idealistic Vision Behind Harmony
Harmony comes with an idealistic vision based on a radical ideology. The vision is to extend property rights to data.
Essentially, Harmony wants to make data into property that every human being has the right to own and control. Therefore, Harmony wants to extend the rights compacts like the US Constitution grant to the internet, the blockchain, and cyberspace.
“Controlling your own data must be a basic human right,” Tse writes. This is a radical concept because it challenges Big Data’s current notion that nobody owns data and everybody can use it.
How Harmony Plans to Extend Human Rights
This is a radical extension of rights similar to that which occurred in the 18th and 19th Century. To explain, until the 18th Century human beings had no rights to their own bodies or labor.
Thus, other people could own your body and sell your labor. If you objected your owner had a “right” to whip or torture you until you went you went along.
The American and French revolutions changed that by proclaiming every human being had basic rights no government or corporation could violate. A logical consequence of those revolutions was the abolition of slavery in the 19th Century.
Harmony’s data basic right could form the basis of a new economy and a basic income, UtopiaPress’s Michael K. Spencer theorizes. In detail, Spencer thinks royalties or dividends on your data could form the basis of a basic income paid to each person who participates in a blockchain platform.
Harmony could be a disruptive blockchain platform
However, I think Harmony could be disruptive platform without the radical ideology. Harmony can disrupt because its business model of tapping venture capital and developing infrastructure that works is the future of blockchain.
To explain, Harmony could offer a scalable blockchain solution from the beginning with its sharding technology. That alone could form the basis of practical and profitable blockchain platforms.
Consequently, all speculators and investors should watch Harmony. This seemingly simple platform could be the blockchain’s future.