The chances are pretty low that if you’ve found this article, you don’t know what blockchain technology is, however there may be some who do not. A blockchain is essentially a distributed public ledger, a decentralized record of transactions/records. And they’ve enabled some pretty amazing things to happen. Blockchains are the backbone technology of cryptocurrencies such as Bitcoin, of decentralized applications and Smart Contracts which Ethereum has made possible, digitized assets such as the gold-backed DinarCoin, and applications ranging from the medical industry to agriculture to government and beyond.
The first major application of blockchain technology was Bitcoin. Produced by a mysterious person or group of persons with the pseudonymous name of Satoshi Nakamoto, who released the whitepaper back in 2008. The blockchain concept was designed to help stop double spending, but it wasn’t long before people started realizing the potential of blockchain technology apart from Bitcoin. Vitalik Buterin was the main mind behind Ethereum, which produced smart contracts using blockchain technology, and opened the door for businesses and startups to build their own decentralized applications on the platform, using it’s blockchain. And blockchains have pretty much exploded in use since then.
We already discussed in another blog about digitized assets, where physical commodities are going on the blockchain in the forms of cryptocurrency tokens, including: gold, gold ore, oil, agriculture, and Zirconium Dioxide (Zr02) – an industrial chemical. We expect this trend to continue growing.
The world is taking blockchain technology and cryptocurrencies on at different rates and with different views. From governments, to banks, to several different industries, and from decentralized products and services to centralized ones – though centralized blockchains are arguably ineffective and self-defeating, offering nothing better than centralized systems already in place (the blockchain’s main strength is in it’s decentralization). You can read more about that here.
So what IS blockchain’s future potential?
Some have extremely negative views on blockchain technology apart from Bitcoin, such as the writer of this article from coindesk.com, who among their many points, points out that efforts by intermediary entities to incorporate blockchain technology, defeats it’s purpose entirely. And that blockchain technology’s abilities has been largely exaggerated and overestimated, with no one really being able to explain how it could accomplish their high hopes. The author also makes the point that much of the blockchain craze has been motivated by a fear of not wanting to miss out, amidst all the hype. He does however mention that there are some notable uses for blockchain aside from Bitcoin, such as: timestamping, anchoring, and notarization. The author also praises Bitcoin (enabled by it’s blockchain) as “digital gold” with the ability to be to the world what gold itself has been.
Unfortunately for Bitcoin, “digital gold” is now not only an allegorical catch phrase, but another, quite literal, blockchain-enabled digital gold asset.
Of course, such negativity was not only directed at blockchains in general, but also at Bitcoin itself, as the author of the coindesk article pointed out:
“There has been no shortage of folklore and drama: 2016 started with the “whiny ragequit” of Bitcoin Core developer Mike Hearn, who shortly after joining banking consortium R3CEV declared bitcoin a failure and sold all his coins.”
Mr. Hearn, for now at least, would appear to have been wrong. Could this also be the case for negativity against blockchain technology (Distributed Ledger Technology – or DLT) apart from a cryptocurrency such as Bitcoin? But this negativity is shared among many, such as the responder to this Quora question: “what are the negative impacts of using blockchain?”, who points out a few problems with the technology, including the fact that ‘private blockchains’ are nonsense, and that blockchains are not immutable (as is commonly thought), as storing ever-increasing data accrues costs, which must be paid for by someone, and as such the Bitcoin Core team is constantly making efforts to reduce storage requirements.
But all is not doom and gloom for this technology. People like Don Tapscott believe that blockchains have the potential to revolutionize the world economy. In an article on mckinsey.com, the author shares an interview done with Mr. Tapscott. In it, he shares how he believes blockchains can offer genuine protection of privacy and can be platforms of privacy and trust. He believes that blockchain technology can help restructure the economy, and redistribute power to the people, with technologies such as Bitcoin. He reveals that blockchains can be useful for any sort of structured data, which can extend far beyond money transfers. Enthusiast and advocate for the technology that he is, Don also realizes that there are potential problems with the technology and implementing it, such as energy consumption and a current lack of governance and order. He also says the technology could be the ultimate job-killer.
Microsoft’s John Farmer also has a radically positive view of blockchain technology, as revealed an article by techcitynews.com. He says:
“Yet relatively few people are talking about how the blockchain will fundamentally transform so many other aspects of our lives, including remittances, real estate transactions, election fraud monitoring, healthcare and even identity itself.”
Unfortunately, both Don and John believe the technology is immutable, and Don also believes it to unhackable, neither of which are true. That aside, their hopes for the technology are revealing, and they are shared by many others.
It’s important to have a balance when it comes to blockchain, understanding what it is, knowing what it is not, and understanding it’s future potential and applications. This article by forbes.com despells 5 myths about blockchain technology. In fixing these myths, they point out that:
- “The Blockchain” does not exist, there are in fact several separate blockchains that help operate different services and products.
- Blockchain records can actually be hacked or altered. Though it may be more difficult, it is by no means impossible, especially as new technology grows in all sectors.
- Blockchains do not actually have to be publicly accessible. Blockchains are for networks of communities, they can be private, they can be open, they can be big, they can be small.
- Cryptocurrencies are not only used for untraceable black market activities. While they can be used for such purposes, they are first and foremost a means of transferring value from one person to another. They can be used for good or for bad things, the same way as any other form of value can be. And they are not untraceable, in fact every transaction is recorded on the network.
- Blockchains do actually have business and commercial applications. As you will see in the rest of this article.
The author of the article continues to say:
“Blockchains tends to be associated with the transfer of value. However, the very nature of their design — secure blocks of information, verifiable data and permanent records — creates a model that can be used for any sensitive data. A good example is patient medical records: They often need to be sent from a provider to a range of different recipients, including insurance companies, referrals and other departments within the same facility. This data includes things like medical history, social security numbers and insurance information. Blockchains provide a means to access and transmit these records securely and privately.”
Blockchain technology certainly does appear to have a useful future, with and without cryptocurrencies. Let’s take a look at just a handful of examples of how blockchains have already been used and are being planned to be used in the future.
Current And Future Uses
Obviously, there’s Bitcoin, Ethereum, and the altcoins you’re all likely familiar with, and what we’ve already mentioned in this article, such as digital assets or digitized commodities. Let’s take a look at what else is being done and is planned to be done. Again, these are merely a handful of examples.
Blockchain & Cryptocurrency Acceptance: General acceptance of blockchain technology is growing around the world. You’ve seen it and we’ve written about it, governments, banks, and companies around the world are starting to accept, plan, and build their own cryptocurrencies and blockchain platforms. In fact, just a couple of days ago, newsbtc.com wrote an article about the Japanese government creating a blockchain platform to better help with citizens and businesses interacting online with the government. Koreaherald.com reports that South Korea is looking to give Bitcoin legal ground. Of course Bitcoin legality has been of much dispute in different countries around the world, some accepting it with open arms, some hotly disputing and banning it, and others switching their stance on it. Innovation before regulation tends to cause a lot of issues and confusion.
Education: Not only is education on blockchain technology being made available and disseminated to the public, but the technology also has the possibility to transform many aspects of education itself.
Voting In Brazil: Technology and Society (ITS Rio) is building a blockchain platform to keep track of citizen votes for draft bills for congress to consider. The country has a form of “direct democracy” where a 1% voter vote can bring a draft bill before the Brazilian congress. The number of signatures required to create a draft bill can be time consuming and labor intensive, using blockchain technology can help make this process easier and faster.
MORE Transactions!: An Australian company is claiming that their Red Belly Blockchain will be able to process 440,000 transactions per second! That’s more transactions per second than Visa, Paypal, Bitcoin, and Ethereum combined!
Sharing Economy: Bitcoinmagazine.com claims that blockchain technology can enable real and sustainable sharing economies, in contrast (as they make the point) to Uber, AirBnB, and other like-companies which have spearheaded the concept. Cryptocoinsnews.com wrote a similar article, and gives the example of Arcade City, a ride sharing company – although a simple google search will provide plenty of negativity, including this article claiming the company is a scam.
Airlines: Some believe that blockchains could have substantial benefits for the airline industry.
Healthcare: One article from back in August of 2016 described how 8 healthcare startups were already using blockchain technology to improve health care services and their inner workings.
Supply Chains: Hbr.org said that startups and corporations are working on blockchain-based systems to help improve the supply chains of restaurants and retailers.
Restaurant Ordering and Inventorying: Even taking customer orders and keeping track of inventory have been revolutionized by blockchain technology.
P2P Mobile Payments: Abra has created a smartphone wallet app that allows users to send funds directly to each other through their phone numbers, free of charge. The funds do not go through, nor are in the possession of a third party.
Proving Fish Origins: One app is trying to prevent human slavery and human rights abuses in the fishing industry, by proving seafood origins, from the trowler to the supermarket.
Banking: Despite concerns and perhaps some misunderstandings, some banks are fascinated by the promise of blockchain technology.
Trading: Examples are popping up of blockchain technology being used in trading.
Gift Giving: India has started it’s own gift-giving blockchain-based platform. And there are likely others.
Crowdfunding: Blockchain technology could work perfectly to automate crowdfunding and crowdsale projects. And many many more: Again, these are just a handful of examples, and there are (and will likely continue to be) many more.
We believe that blockchain technology is growing and will continue to do so. The blockchains.my advanced digital wallet app, is another example of the growing potential of this technology. So, as it is important to know the technologies’ limitations and myths that are not true, the technology itself seems very promising well into the future, with and without cryptocurrencies.
We hope you enjoyed this week’s article,
Have a wonderful rest of the week,
The DinarDirham Team