As I write this blog, I already wonder how it will be received. Will it will be taken as intended? Will the reader say “Hmm, that’s interesting and I should look more into this…” or will it be “Duh, when did Marble wake up from his nap?” The subject that has captured my interest lately is “blockchain” and its potential impact on the very fabric of our economy and beyond. Much is being written about the technology these days and it has fascinated me enough to write about it here. One of the reasons I follow developments in nuclear fusion is the potential it brings to completely revolutionize the energy industry and in turn, our lives. I am beginning to believe blockchain technologies may have that same potential for impact.
As a matter of background, blockchain is the underlying technology used to develop Bitcoin, the digital currency used in many internet based financial trust applications. Much like the internet itself, there is no real central authority in a blockchain. Think of it as a series of trusted transactions with each link having a piece or “hash” of the previous link which binds the chain. Running algorithms keep the history of the chain up to date at all times and also have the interesting characteristic of becoming more and more bulletproof as they get bigger. Encryption is inherent so security is central to the architecture. This is a completely decentralized model. Think of a distributed ledger with no central or master database. What sounds chaotic is massively elegant and revolutionary and its potential impact is staggering. Consider just the idea of eliminating central banks for a moment, replaced by a completely distributed software-based digital trust model. The trust model in many applications cuts out the middle man. For instance, the blockchain between the consumer and say, a musician can be direct with no need for distribution labels or even on-line music stores. Makes one wonder about the long term play for Amazon or the iTunes store.
The technology is one thing and there are tons of hurdles in an open and completely distributed software world. I am fascinated though by the social impact and its implications. One article used the analogy that very few people knew what TCP/IP is nor cared as the internet was evolving. Blockchain may develop the very same way. The cool thing to think about is the potential ability to deal with ideas of trust and identity in a very new way, something that is on the front burner for many of us. As with any new technology, there are many naysayers and hype masters. For me personally at this stage, I just think it is a tremendously interesting topic to explore from both the technical and social perspective.