By Tim Hall

 


Blockchain is the programming that gives Bitcoin its value, but it could be much more than that. Blockchain could change the world.

A blockchain is a shared ledger, where ‘blocks’ (packets of data) are linked together into an unchangeable chain that is constantly verified by anyone with a copy.

Every time a new block is added to the chain, all of the copies compare themselves to see if the addition is legitimate, and then update the shared ledger.

Blockchain systems rely on verification in such a way that there is no ‘master’ copy, so the data exists in a decentralised state and cannot be modified without the agreement of all other copies.

This 17-minute video does an amazing job of describing the technology, and is highly-recommended viewing.

It is confusing, but important, because blockchain’s ability to provide an unchangeable database that does not rely on an authority to administer it could topple entire industries.

Blockchain could take power from the powerful, remove all middlemen, and create new standards of truth and transparency.

For now, it is mostly used to record and verify financial transactions – think Bitcoin or Ethereum – something it is perfectly suited to.

However, the same blockchain advantages could one day be brought to research, charity work, and even democracy itself.

Here are some areas with potential to be touched by the blockchain revolution:

Finance and real estate: Beyond just creating new currencies, blockchain technology could be used to record traditional currency transactions outside of any individual bank. This would allow different banks to register and verify payments in a faster and more secure way. But that is just the beginning, as the finance sector has been one of the first and most heavily-invested blockchain users, it is a major area for innovation.

In fact, ANZ and Westpac have recently teamed-up with IBM to digitise the guarantee process for a major commercial property lease process. IBM estimates that blockchain will soon be implemented by 15 per cent of all banks.

Music streaming: The internet age has been tough on musicians. After mp3s and file-sharing smashed their previous business model, musicians are just starting to find a new way to operate through large streaming services like Soundcloud, Spotify or Tidal. However, these systems provide miniscule payments to artists, and tend to direct most of the profit up to the corporate owners of the service itself.

If every single song was stored on a blockchain, artists could be sure that their intended version is the only people get to listen to, and potentially, revenue from it being played on any of the many different services could be directed back to the artist. Ujo Music and VOISE are working on ways to improve music distribution with artists in mind.

Research: Some groups are already looking at ways to create decentralised archives of research data and scientific papers.

Not only would this allow work to be stored and published more freely, it would also help identify and interpret the data from a range of sources (from old research papers to individual monitoring devices in the field) more easily.

Instead of data being jealously guarded by universities and journals, a blockchain could be used as a transparent mediator to allow more people to access data (in which they have a greater level of trust), increasing innovation and reducing the chance that data can be skewed or fudged.

Energy: Energy management is a highly centralised industry, with layers of disconnect between consumers and the sources of power they consume. Energy producers and users are separated by physical and virtual networks that could be removed or at least improved by blockchain technology.  

“Units of power and energy are a strong fit for so-called smart contracts based on blockchain, and meters can feed data directly into blockchain logic,” said Lux Research expert Katrina Westerhof in a recent paper.

“Power also relies on cumbersome trading and clearing systems to support complex markets, and blockchain can help create a leaner distributed system that can cut out intermediaries and associated fees.”

Technology: Samsung and IBM are working on a blockchain approach to networking devices. The basic idea is to record the ID of all devices on a single ledger, so that each one can more confidently communicate with others (sharing data, bug reports and even software updates) without have to be re-verified by a central authority.

“A humble washer can become a semi-autonomous device capable of managing its own consumables supply, performing self-service and maintenance, and even negotiating with other peer devices both in the home and outside to optimise its environment,” IBM said in a recent paper.

Voting and democracy: Each person’s vote could be recorded on a blockchain, as well as what they do with it.

This could get rid of all the risks of voter registration and authentication, make counting votes instantaneous, and make electoral fraud impossible. This is something the people at MiVote.org.au are working on already.

Beyond just voting, blockchain technology could change the idea of government itself.

Think of how many government services and department consist primarily of maintaining and administrating a list. Everything from passports and driver’s licenses, to land ownership data, health records and demographic information can be brought together on decentralised, unchangeable ledgers. This would allow gaps in services to be identified in real time, and for resources to be directed more efficiently.

While this is a bigger idea that really requires its own article (like this one) replacing government databases with blockchain ledgers could allow the concept of government to be enhanced for greater integrity, security, privacy and inclusion.

This is just a tiny smattering of the potential uses for blockchain technology, some more in brief include charity distribution, supply chain management, health insurance, contracts and retail.  As it becomes more ubiquitous, the blockchain will begin to underpin part of our lives that we didn’t even know could be improved.

It’s all very exciting, and waits tantalisingly close down our current technological road.