What is it?
Blockchain is described as a decentralized system or distributed ledger. Where a network of decentralised devices or nodes, each hold a copy of all the data in a chain. When updated, each member device can verify the work of the device previous in the chain.
Simply put; A secure, continuously updated record of who owns what.
When the list or record is decentralised and available to everyone to check and verify it inherently builds trust into the system, known as automated trust. The decentralisation aspect means blockchains are tamper evident, meaning if one item is changed maliciously, it will be recognised as being tampered with by the rest of the chain and rejected.
Mostly known for being the underlying technology behind cryptocurrency, the origins of this technology stem from a problem in the late 1980’s and early 1990’s of verifying a timestamp digitally. In a 1990 paper published by Haber and Stornetta called ‘How to Time-Stamp a Digital Document’, they proposed to link issued time-stamps together into a liner hash-chain so it would be infeasible for a user to either back-date or forward-date a document. Arguably the inception of what has evolved into what we now call Blockchain.
Fast forward to November 2008 where a mysterious white paper titled ‘Bitcoin: A Peer to Peer Electronic Cash System” was uploaded to the cryptography mailing list at metzsowd.com by an unknown entity calling themselves Satoshi Nakamoto.
Blockchain had officially been born.
“I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party. The paper is available at: http://www.bitcoin.org/bitcoin.pdf The main properties: Double-spending is prevented with a peer-to-peer network. No mint or other trusted parties. Participants can be anonymous. New coins are made from Hashcash style proof-of-work. The proof-of-work for new coin generation also powers the network to prevent double-spending” - Satoshi Nakamoto (Original post from 1st of Nov 2008)
Since 2008 the social perception of blockchain technology has changed dramatically. In the early stages of bitcoin, it was perceived as a cryptocurrency for tech savvy criminals and people who were anti-government.
Now in 2018, different cryptocurrencies are widely available such as Ripple and Ethereum. Many online-retailers accepting it as forms of payment such as Expedia. Blockchain technology itself is now being integrated in modern banking with the World Bank’s announcement in August 2018 it was creating the Bond-i, a Blockchain based bond mandated by the Commonwealth Bank of Australia.
Possibilities outside cryptocurrency.
While cryptocurrency is one aspect of Blockchain technology, it has far wider implications and scope. It can be used to reshape whole industries. Healthcare for example, where a distributed encrypted ledger can be used to store and share patient details between hospitals and doctors worldwide or supply chain management where everything along the supply chain can be monitored and verified from origin almost instantaneously.
Emergence of DAO’s or Decentralised Autonomous Organisations can pave the way for new business models. Where the organisation made up of people can provide the rules of the organisation as a consensus, code these rules as a transparent program, execute it within the chain and not have a central authority making or enforcing the rules.
Blockchain has implications outside of business as well with Dubai taking steps to becoming the world’s first blockchain powered government.
The new social acceptance of these technologies will help pave the future of technology, business, services, contracts, ownership and government.
Downsides and Pitfalls
Although Blockchain has many possibilities for the future, it is not without its pitfalls. Privacy and the right to forget is one aspect of blockchain some people might find issues with. The blockchain is permanent, with all transactions held forever. To combat this aspect some blockchain technology creators are experimenting with the idea of what’s known as Oracles, People with special access to edit and amend the chain. This idea of Oracles however, somewhat negates the idea of the blockchain being tamper evident.
One thing is certain though, Blockchain is a powerful technology with massive implications that we are still yet to see or even forecast.
Blockchain, an emerging technology for the future was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.