Do you know that blockchain technology could decentralise everything and not just currency? Do you even know what Blockchain is? One example that you just might have heard of is Bitcoin, the online currency. That in itself may not enlighten you to what blockchain is, however. According to Pearl Chan (2015) reporting for Venture Beat, a blockchain is:
“A transaction database shared by all nodes participating in a system. In essence it is a distributed method of tracking and transferring assets online without need for a trusted party.”
Applications based on the blockchain technology
Some interesting observations that Chan made after attending a conference on blockchain include the fact that various kinds of applications are currently emerging outside of the Bitcoin blockchain, and also on top of it. People are building applications that use this technology.
These applications need to be monetised and it is still early days, but they promise interesting developments. One is Factom. Factom is essentially built on top of the Bitcoin blockchain. It’s ethos is to use the technology behind bitcoin to manage how businesses manage data and keep record. Factom can be used to simplify records management, record business processes, and address security and compliance issues through the use of a blockchain technology.
This can allow for different kinds of information to be stored, such as legal or medical records, or even title records. One example of a potential benefit of this is given that 75 per cent of the world does not have secure land title at the current time. Through its digitisation of title records, Factom is solving this challenge.
Another of the developments in this area is Ethereum which is a platform providing developers with the opportunity to create decentralised applications. Koinify, a Denmark based Bitcoin payment processor is yet another and it has used Bitcoin blockchain specifically to help fund decentralised platforms.
Additionally, IBM ADEPT is Autonomous Decentralised Peer to Peer Telemetry and this has been used to create a decentralised Internet of Things. All of these are fascinating developments. Another observation that was made is that implementing blockchain applications will need cross disciplines to work together to be able to achieve it.
Computer science in itself may not be sufficient to find the answers, and questions of scalability, among others, need to be explored. There are various other areas that will need to be covered off for blockchain to be as effective as it could be. These potentially include mathematics, law, economics and privacy. Understanding the different incentives of those within any given ecosystem using blockchain will also be necessary.
Building an ecosystem for blockchain
A third observation from the conference was the fact that the supporting ecosystem for blockchain still needs to be built. That is because blockchain is such a new technology. There is a sense that this needs to be achieved for common good.
There were two organisations that could be influential here. One is the Cryptocurrency Research Group or CCRG. CCRG is studying cryptocurrencies (among others) in a cross-disciplinary way, considering mathematics, economics, law and cryptography.
One activity that has been undertaken that will be helpful in moving everything along in the right direction is the fact that CCRG has set up Cryptoeconomicon where cross disciplinary discussion of blockchain could occur. Another helpful step is the fact that Blockchain University is already underway. This is a bootcamp for developers to enable them to gain the knowledge that they need to create decentralised applications. It provides critical information for those that are not really sure how to get underway, yet have an interest.
Funding in the blockchain ecosystem was also considered to be of interest. Funding to date has been at least in part achieved through taking Bitcoin for cryptoequity or tokens. Sixty four thousand Bitcoin was raised by the biggest platforms. This is a very different approach from going out and targeting angel investors or traditional venture capitalists to try to seek out funding.
A final observation is that blockchain trends present a formidable challenge to start thinking about. Because the ecosystem is so very new, understanding what might happen over the next few years is in reality, very difficult. However, one trend that has been predicted for 2015 is that it is likely that those blockchain applications that are likely to be mainstream are those that target business to business activities.
These types of activities might include identity, the management of records, or potentially the supply chain. Other trends are more challenging to predict, and it will be fascinating to see what emerges in the upcoming months and years for blockchain.