There is a lot of crypto hype these days from crypto currencies like Bitcoin to fundraising efforts like ICO (Initial Coin Offering) similar to an IPO. All this noise has obscured the real benefits of the underlying technology – Blockchain. The Internet brought us the “exchange of information” over last 3 decades. Blockchain will give us the new era of “exchange of values” or “exchange of assets” without an intermediary via highly secure transactions in a peer to peer network. New ways of transferring real estate titles, managing cargo on shipping vehicles, guaranteeing the safety of food we eat and much more mundane activities will be enabled by Blockchain. An article in today’s WSJ by Christopher Mims covers this in more detail.
Briefly Blockchain is essentially a secure database (or ledger) spread across multiple computers. Everybody has the same record of all transactions, so tampering with one instance of it will be meaningless. “Crypto” describes the cryptography that underlies it, which allows agents to securely interact (e.g. transfer assets) while also guaranteeing that once a transaction has been made, the Blockchain keeps an immutable record of it. This technology is well suited to transactions that require trust and a permanent record for traceability. It also requires the cooperation of many different parties. Here are some examples of actual deployment of Blockchain so far:
- At Walmart 1.1 million items are on Blockchain helping the company to trace the item’s journey from manufacturer to store shelf. Global shipping company Maersk is tracking shipping containers making it faster and easier to transfer them and get them thru customs. Other companies using Blockchain technology for tracking are Kroger, Nestle, Tyson Foods and Unilever. In all these cases, IBM is providing the Blockchain technology.
- CartaSense, an Israeli company uses Blockchain database for its customers to track every stage of the journey of a package, pallet or shipping container.
- Everledge, a company started in 2014 uses a Blockchain-based registry of every certified diamond in the world (already 2.2. million in its registry). By recording 40 different measures of each stone, it is able to trace the journey of a stone from its source to the final sale to a customer.
- Dubai has declared its goal to make itself a Blockchain powered government in the world by 2020. They want to streamline real estate transactions for faster and easier transfer of property titles. Other assets like birth/death certificates, passports, visa, etc. can also be managed at low cost with better efficiency.
It is a bit early to claim that Blockchain will revolutionize every industry including government, but it has that potential. It poses a tremendous challenge for the hackers to break into. It can impact on how we vote to whom we connect to what we buy.