One of the ways that Blockchain technology is most often referred to as a ‘trust protocol’. It’s immutability and decentralized nature theoretically remove the need for third-party central authorities and intermediaries in the verification, storage, and exchange of data and information. Like many new developments, the full ramifications of the technology, have taken some time to be appreciated. However, even the most obvious potential applications of Blockchain technology add up to huge fundamental changes in the way we live.
Many more changes we haven’t yet considered will surely subsequently be given birth to. Were Uber and other ride-sharing competitors an obvious result of Google Maps technology? Not to most but these apps and the multi-billion dollar market they’ve created are powered by Google Maps data. We can expect the same, and potentially far more significant, changes to the environment we all live in to result from the increasing adoption and implementation of Blockchain technology in different areas.
Just a few of the main ways we can expect Blockchain technology to change our lives are:
Personal data ownership: the internet of information – the World Wide Web – means that to a varying extent we all have a ‘virtual you’. This is the sum of all of the digital crumbs we leave behind ourselves when we do anything online, particularly when that involves financial transactions. However, we don’t own this ‘digital’ version of ourselves – our data is held by all of the intermediaries we go through online when making payments, transfers, inquiries and so on. Blockchain, by cutting out most intermediaries and allowing secure transactions directly between counterparties will mean in the future we should own our own digital identity. It will be less necessary to provide third party access to this personal data and only when and how we wish to provide it.
Online Security: because Blockchain records are decentralized they cannot be hacked. Or it is at least hugely difficult to do so. Blockchain applications are infinitely more secure than even the heaviest online firewalls and security measures current systems use. Multiple copies of the same cryptographically-sealed records held simultaneously on millions of computers means that hacking a Blockchain is practically impossible. It would mean being able to simultaneously do so across more than 50% of potentially millions of copies.
Online records and personal data being held on Blockchain applications would essentially bring the era of identity theft, online fraud, and malicious hacking to an end.
Time and Cost Efficiencies: having full ownership and control of all of our own personal data has many potential applications. Processes from applying for a loan to replacing a lost driving license or disputing a property boundary would all be streamlined. Verifying our own identities, financial history, and other records would no longer require the slow and inefficient process of compiling information from different central authorities. Everything could theoretically be contained in our own personal Blockchain record and convenient access provided to what is relevant.
Most of the transactions we conduct, from financial transactions to applying to a university, involve intermediaries. This both increases costs and processing time. Blockchain technology’s potential to remove these intermediaries will slash costs and processing inefficiencies across the many trust-based commercial and administrative transaction processes we are part of almost every day.
What Blockchain Means for the Sharing Economy
Blockchain technology has the power to create a genuine ‘sharing economy’ that is based on peer-to-peer transactions. When we talk about the sharing economy we refer to companies such as Airbnb, Uber, and Lyft. However, while these companies have certainly opened up the opportunity for individuals to earn money by providing others the use of their possessions or time, they are not truly peer-2-peer. The ‘marketplace’ platform that links buyers and sellers is still owned and controlled by a company. The companies behind the sharing economy revolution are arguably the largest beneficiaries, their cut of each transaction are now worth billions.
A Blockchain technology-powered alternative would mean a system like Airbnb could genuinely run without a company behind it. The trust required between the two counter-parties would be provided by the Blockchain records and Blockchain-based smart contracts. A company, or another form of organization, would still need to initially build the platform of course but it would then be able to run autonomously. At the very least this would hugely decrease the service fee costs for the two counterparties.
How Blockchains Could Change the World
Blockchain technology could also have a massive global impact in the form of protecting ownership rights, rule of law, preventing corruption and making politicians and other leaders more accountable. The single biggest cause of poverty in the world is not a lack of resources but corruption, poor management and weak rule of law.
Blockchain allows for permanent, immutable and auditable records. This provides transparency and keeps all parties accountable. Imagine the case of a major public concession such as building a motorway, hospital or school. A Blockchain-based record of each and every transaction within that process would make it impossible to cover up misuse or misappropriation of funds or inefficient work. How much was paid for what, when and to whom would be clear.
Blockchain technology also has clear application for supply chain management. This means a full history of building materials used, all the way back to the quarry or factory would also be possible. The use of cheaper inferior materials in construction is a huge element of fraud and misappropriation of public funds in many parts of the world. Precise records that cannot be tampered with would eliminate a massive percentage of the corruption and theft that has prevented many parts of the world developing in the way they should have.
Rule of law and protection of private property is another fundamental problem that has held back many parts of the developing world at different points in history. It is estimated that 70% of the world’s private property is held tenuously. A citizen may have a paper title deed to farmland or other property but if a dictator says that the government’s computer says that property is actually owned by someone else, favored by the regime, what recourse does that citizen have to defend their ownership rights?
Blockchain’s immutability would mean that title deed records would not be corruptible at the whim of any government or central authority. Of course, a property could still be taken by force but there would be no way to dress up the action in front of the wider public or international community as anything other than direct theft.
Blockchain-based public record keeping, contracts, and supply chain management genuinely has the potential to eliminate the majority of theft, corruption, and lack of accountability for gross incompetence. And that would almost certainly take the handbrake off development in the parts of the world that have suffered the most from those things.