So, your interest in blockchain is piqued. You’ve heard tell about the promises for the technology — everything from generating trillions of dollars in business value-add to making it easier to know where your Thanksgiving turkey was born and bred.
But will the blockchain truly be, as some pundits predict, “bigger than the internet?”
I think so. And here are four potential impact areas that just might convince you, too.
Because of its affiliation with cryptocurrencies and its natural affinity to markets and exchanges of all types, banking and fintech are among the first realms to dive head-first into investigating how blockchain technology can be used to improve service delivery and decrease transaction costs.
While it’s great that your bank or mortgage lender will have more efficient back-office operations, how does that play out for the everyday Joe or Jane? Will you notice your life changing radically as a result of the blockchain?
In a word, yes. “Any institution or individual living in a money-based economy is likely to benefit from the new technology, for reasons of convenience if not financial,” writes Michael Brown in IT Pro Portal.
Right now, financial institutions hold a sacred cow position as market middlemen. Their position is so entrenched that no one questions why you need a bank if you want to sell a car, buy a home, or pay for your anniversary dinner out.
If you dig a bit, it makes sense, given current limitations. After all, before you hand over the pink slip to your 2012 Camry, you want to make sure the money’s in the bank. Someone’s got to be the intermediary and hold the purse in the exchange between your mortgage company and the seller of your new condo. And it’s much easier to pass the waiter your Amex Gold Card instead of carrying a wallet full of bills.
But what if that middleman was no longer needed and you had another, more efficient way to ensure that the exchange of value — whether for $100, $10,000, or $1 million — was certified and proceeded as designed?
That’s what the blockchain does. The trust is built into the network, so you don’t need to know that the person or entity you’re dealing with is good for their part of the deal. You don’t need an escrow company to hold the cash while the house transfer is taking place. The network does it for you.
As a result, transaction times are cut drastically, from weeks to hours in some cases. Fewer middlemen means lower costs — to the tune of an estimated $6 billion a year for capital markets, according to Goldman Sachs.
Saving time. Saving money. What’s not to love?
2. The Internet of Things.
The Internet of Things (IoT) promises a Tony Stark-esque reality and convenience to everyday non-billionaires. Out of kombucha? Hit the Amazon “dash” button on your refrigerator, with delivery promised by 5PM. Want to warm up the house temp before you arrive home? Just push a button on your smartphone and you’re set.
Well, except for the potential security weak points.
After all, every one of those little smart devices, from Alexa to each and every game console, smartphone, computer, tablet, and other wired device in your home, presents a hacking opportunity. But the cryptographic processes underneath the blockchain just might be the security answer everyone’s been looking for.
“IoT is a term used to describe the ongoing proliferation of always-on, data-gathering devices into our work and personal lives. Blockchain is an encrypted, distributed computer filing system designed to allow the creation of tamper-proof, real-time records,” writes Bernard Marr in Forbes. “Put them together, and in theory, you have a verifiable, secure and permanent method of recording data processed by ‘smart’ machines in the IoT.”
Just think: Combining blockchain and the IoT gives security and interconnectivity. So say you hook up your FitBit to your treadmill to automatically adjust intensity to burn off the needed number of calories to account for the food you ate and logged into your iPhone fitness app. Now you don’t have to worry that someone’s going to hack your system and get access to your personal data — including the fact that you ate three Krispy Kremes at your boss’s going away party yesterday.
One of the biggest issues facing healthcare is how to share up-to-date information amongst various stakeholders — individuals, facilities, physicians and other healthcare practitioners, insurance companies — while still maintaining confidentiality and security.
This scenario seems custom-made for a blockchain-based solution. The distributed, immutable ledger is ideal for sharing of large volumes of data in a secure format.
Instead of today’s antiquated system where medical data has to be hand-reconciled in a labor intensive and error-ridden fashion, the blockchain enables a constantly updated, trusted, secure database.
“The end result would be perfectly reconciled community-wide information about you, with guaranteed integrity from the point of data generation to the point of use, without human intervention,” writes John D. Halamka, MD, CIO for Boston’s Beth Israel Hospital, for the Harvard Business Review.
As a result, your cardiologist in New Jersey is updated when you check into the ER for strep throat in San Diego, and at your next visit, she can see your vital data, test results, and any prescribed medications. No more forms. No more error-laden reporting. No more guessing. And better quality of care.
4. Fighting Crime.
By amassing a variety of data into an immutable and transparent database, the blockchain enables predictive analysis at a level never before experienced.
One such example is the process one PhD candidate has developed to identify online advertisements linked to human trafficking rings. By using a combination of algorithms and AI, Rebecca Portnoff has developed a way to sift through thousands of online advertisements and link them to Bitcoin payments, the preferred currency for online sex ads. Using the blockchain, law enforcement can find links between anonymous ads and, ideally, target the criminals.
Meanwhile, Alistair Davidson, an official for the United Kingdom Ministry of Justice is proposing to use the blockchain to establish records for officer-worn camera footage. Because the ledger is immutable and transparent, it can be used legally to prove authenticity of any piece of video.
“If that chunk of video were needed in court, it could be unambiguously, cryptographically verified that the chunk of video seen in court is exactly identical to that particular chunk recorded at that time, and has not been altered or processed in any way,” says Davidson.
While interesting in their own right, these examples are merely illustrations of the various ways the blockchain can revolutionize the way ordinary people — not just multinational enterprises and governments — work, interact, and go about their daily tasks.
As blockchain expert Don Tapscott says, “The first generation of the digital revolution brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.”
Will it really be “bigger than the internet?” I’m voting yes.
Jason King — Humanitarian Hacker. Executive Director, Unsung.org. Co-Founder, Kingsland University — School of Blockchain, the world’s first accredited blockchain training program. To find out more about how the Kingsland University — School of Blockchain is working to address the developer shortfall, download a copy of the whitepaper, “Developing the Future of Blockchain”.