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When Satoshi Nakamoto, whose true identity is still unknown, released the whitepaper Bitcoin: A Peer to Peer Electronic Cash System in 2008 that described a “purely peer-to-peer version of electronic cash” known as Bitcoin, blockchain technology made its public debut. Blockchain, the technology that runs Bitcoin, has developed over the last decade into one of today’s biggest ground-breaking technologies with potential to impact every industry from financial to energy to educational institutions.
At its essence, blockchain is a decentralized software mechanism that enables a public distributed ledger system. It allows the tracking and recording of assets and transactions without the presence of a central trust authority such as a bank. More importantly, it relies on public key encryption, or cryptography that makes it hard for hackers and other cyber bad guys to change or steal data. It enables peer-to-peer exchange of data, assets and currencies in a fast, transparent and cost-effective manner.
Someone with a unique insight and understanding of Blockchain is Oliver Isaacs– early investor and proponent of Ethereum, Bitcoin Cash and Ripple. With a following of one million followers across his social channels, Isaacs is one of the world’s leading blockchain advisors and influencers –indeed he has worked with and advised some of the founding and most successful companies in the sphere such as Dragon Coin, Coinbase, Nauticus, and Ripple.
Isaacs is often invited to speak at major tech events around the world on topics ranging from what investors should look for when considering investing in an Initial Coin Offering to how blockchain technology will make the world a better place.
Recently appearing on CNBC NIKKEI in Japan, Isaacs emphasises that Blockchain is not only here to stay but that it will change the world for the better. Blockchain will change the world because of three key issues it addresses: Decentralisation, security and incentives aligned with outcomes.
Vitalik Buterin, the co-founder of Ethereum, asserts that Blockchain will transform society. Buterin, a programmer from Toronto, first grew interested in Bitcoin in 2011. He co-founded the online news website Bitcoin Magazine in the same year, writing hundreds of articles on the cryptocurrency world. He went on to code for the privacy-minded Dark Wallet and the marketplace Egora. Along the way, he came up with the idea of a platform that would go beyond the financial use cases allowed by Bitcoin.
Speaking to TechCrunch, Buterin highlighted several areas in which blockchain and Ethereum will play a major role in the future: Generally speaking, a blockchain application could be built for anything that: (i) needs some sort of decentralization and (ii) needs some sort of shared memory. Ethereum was first described in Buterin's white paper, in late 2013. Buterin argued that bitcoin needed a scripting language for application development. But when he failed to gain agreement, he proposed development of a new platform with a more general scripting language.
Indeed, it's clear there is a growing concern in society related to the dominance and influence of central big business. Across many industries, people are warming to the idea that a decentralised governance and delivery model may be a better option. It’s seen as more inclusive, transparent, fair and inherently aligned with stakeholder interests.
Companies are facing growing challenges in relation to data security, ownership and privacy. On a global scale, it only gets harder as governments adopt varying positions on these topics, and compliance costs compound. Already in Europe, interesting movements are underway as the market reacts to the General Data Protection Regulation (GDPR), which kicks off on May 25. The GDPR will replace the Data Protection Directive as the primary law regulating how companies protect European Union citizens’ personal data. For any business, protecting customer data is paramount. And, as our world becomes more connected, robust systems will be needed to manage ownership of physical or digital assets over time. These systems should be aligned with taxation requirements, payments, trade, commerce, law and the fabric of nearly all societies globally.
The internet was a fundamental shift in communication and the distribution of information, but it reframed our concept of ownership. In business, most of what happens involves multiple parties transacting with one another, with these transactions dictated by a series of rules and regulations. Lawyers have employed contracts for decades to try and manage these arrangements, along with the evidence that is needed when things change. This is all managed via bits of paper, or their digital equivalents, PowerPoint slides and email. The static and hands-on nature of this is expensive and inherently inefficient. Blockchain aims to solve these core issues.
Finally, society’s desire for incentives, rewards and a stake in anything we do is a powerful force. In society, companies are valued on their ability to bring people together, invest, and benefit from an increase in the company value or a share of the company’s profit. There’s typically a demarcation, however, between the incentives and benefits gained by the shareholders, and the customers of the business. It’s a common problem — aligning incentives with benefits and utility across diverse stakeholder groups. If you can create that link, the opportunity for growth to more organically accelerate is huge.
For the blockchain benefits to kick in, one first needs to think about how one can use it to make things easier, more affordable and more accessible. The technology will have to undergo a further fundamental shift in business and the quality of people’s life and confidence in the systems that make things easier day-to-day. The internet changed the world, but it took a while for the building blocks to fall into place, and for business models and our way of life to change. Blockchain will be much the same. The blockchain impact will be even bigger if it succeeds in solving major challenges and points of friction in the world today. Some issues are on track to be addressed, while others need an intervention — a sudden and more deliberate change in tack. One thing is clear nonetheless; blockchain technology will change the world.
Alexander Martin is a senior tech writer, where he covers the development of the internet, technology, and startups.
© Japan Today
15 Comments
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fxgai
I can see certain potential applications for blockchain, but...
I don't get it.
If you are a customer of Apple, you get an iPhone or whatever, and you are happy.
If you are a shareholder of Apple, your shares go up in value (and maybe you get paid dividends), and you are happy.
If you are both, you are really happy.
So what is the problem with companies that blockchain is going to fix?
viking68
I don't fully get blockchain either other than the potential benefits of a distributed ledger and possibly a clearing house like ebay.
However, blockchain is being pushed as the next huge thing in information technology, outside of virtual currency.
What I think that compact statement you cited is trying to say is that investors are better informed in some way by knowing the customer base. That may be more relevant in the non-consumer goods areas where more information on the market price of say raw materials could better inform investors. Most investors should be doing that kind of homework anyway, but maybe blockchain will help improve reporting and quality information.
I agree with you that consumers probably only care about the end products, but they may want visibility in how the products are produced or who the investors are.
I'm with you on this one. I'm guessing to an extent and trying to understand these generalized statements.
UknownPlayer
Blockchains can be implemented to do an inordinate number of processes that we are hardly aware of, the whole time keeping the current status-quo just more efficient. And this is why everyone is looking into using the technology. That may seem depressing but it will lead to many, many positive developments in terms of ethical behaviours, regulated activities, efficiencies in deal-making and even reducing payment costs.
At the moment there are few applications (other than bitcoin) that are up and running in the real world. But the possibilities really do appear to be infinite and it is with this in mind that regulators are launching incubators, insurance companies are hosting hackathons, banks are investing in blockchain tech projects and venture capitalists (VCs) are snapping up anything that merely mentions the phrase ‘decentralised ledger’.
What this means is that the barriers to entry so many people will be lowered, allowing much greater economic participation by more and more people at lower and lower cost. It means that complex processes such as day trading will be near instant in terms of settlement of trades, property conveyancing could happen in moments not months, tax collecting could be instant and at point of transaction. The concept of paying professional fees to access certain markets will be gone, as the cost of participation will be greatly reduced.
Even from technological development, the advent of robotic science is being hampered by the confusion sowed by the human bureaucratic processes and obscured ownership ledger systems. Because currently we have a very convoluted way of managing assets, it is is near impossible for a logical, procedure-driven, semi-autonomous system to really assist us. If you had an efficient asset management register and complementary transaction and security systems, robotic assets could, at last, be in a position to greatly enhance our economic processes.
How will it change us? Well, it is hard to say. Clearly, it raises enormous challenges for society, demographics etc. But it will come and it will change everything we know and everything we do. Perhaps it will allow more human resources to be deployed into finding new assets, exploiting their benefits with greater accuracy and less waste, and thus in time allow us to focus on the effects of our cumulative behaviour on our environment and our children’s future.
But my main issue that needs to be address is how are these blockchain companies need to overcome the technology's fatal flaws? Blockchain companies still need to overcome their fatal flaws–blockchain bloat and scalability. Majority of users are experiencing problems with their computers simply because of the size of the blockchains they are trying to download.
As more and more transactions are executed through blockchains, the transaction logs will continually grow. The inability of many blockchains to scale and accommodate larger blocks doesn’t bode well for the industry’s long term viability as well as the ability to crack down on Blockchains’ high energy consumption in order to truly improve business operations and providing cost, efficient and quality values.
albaleo
It would be useful if the article provided a simple example of where blockchain technology would be helpful, and spelled out what would be involved. As it is, it reads like a lot of vague promises.
UlsterBoy
Imagine the potential for being able to identify everything a Person has bought throughout their whole life.
BertieWooster
If we could just have ONE money all over the planet and it NEVER fluctuated, that would be good. The system right now is like trying to build a house when the builder is using metric, the plumber cubits, the electrician yards, feet and inches, the roofing contracter sun and shaku and so on. Except that the length of the metre, cubit, yard, foot, inch, sun and shaku are constantly changing.
We want ONE stable monetary system.
fxgai
The tricky thing is that the world population is growing. The extra people then produce stuff, and consume stuff. If the money is singular and stable, there isn’t going to be enough of it to smoothly mediate and facilitate the extra economic activity.
Or is it?
At least I think this is one of the reasons given against the gold standard.
BertieWooster
fxgai,
I see what you're saying, but the gold standard was considerably more stable than the current system. I read an article that gave the price of everyday goods 400 years ago in terms of contemporary gold prices and the same articles today. Things like a house, a loaf of bread, a pint of beer and so on. The price of these items had hardly changed. But the money changed drastically, and most dramatically after they removed the gold standard.
Now they just print money as they like, it's not backed by anything. And the rich get richer.
Same old story!
albaleo
@Bertie,
But who gets to issue the currency? Say you're the altruistic leader of a very, very poor country with almost no money. You want to build something useful - new port, new roads, new windmills, whatever. There are plenty of underemployed people, and you have the necessary material resources. How do you pay for it? Look for a foreign investor or issue your own currency? Printing your own money is not always bad.
Tokyo-Engr
@Burning - my first reaction to your post was "you are crazy!!!"...even as an electrical engineer I had trouble believing your post (perhaps a kind of cognitive dissonance maybe?)....
Then I looked it up. It is certainly not an "environmentally friendly" currency. I guess I learn something every day (makes life fun)
https://digiconomist.net/bitcoin-energy-consumption
https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change
Aussieboy
So I met this girl in the bar the other night, bragging about how rich I was from Ethereum, then she asked me for a drink......oh sorry, I dont have any real money.
Kavabata
https://medium.com/@tradingview.com/charting-for-kids-2a287c1058b1 The easiest way is to buy and sell not to mine...IMHO
mmwkdw
All your secrets are mine(d)...?