It is perhaps unfortunate for the blockchain that its fortunes have been inextricably intertwined with Bitcoin. The world’s biggest cryptocurrency has experienced major growing pains, suffering reputational damage with every hard fork and stock market sell-off. Negative press coverage has repeatedly highlighted the blockchain’s underpinning of Bitcoin (which was developed simultaneously by the same person), even though its potential extends far beyond recording currency transactions.
Working on a ‘chain gang
At its simplest, the blockchain is a decentralized public ledger. It records and time stamps information provided by individual users, creating permanent records at each stage. These records are publicly visible and tamper-proof, as well as being validated through a data-intensive process known as mining. This has hitherto proved to be one of the blockchain’s key drawbacks since verifying transactions require a lot of processing power. Every transaction also has to be processed by every computer on the network – a data-intensive and frustratingly slow process.
Scientists and mathematicians have been trying to engineer solutions to both these problems in the hope that blockchain uses can expand into new industries or processes. A number of global banks launched a blockchain consortium in 2015 to share processing power, while IBM started offering blockchain-as-a-service in 2016. However, it was the development of smart contracts which really made companies sit up and take note. This enabled the blockchain to handle loans and bonds, as well as cryptocurrency tokens. It’s also hoped blockchain scaling (where validation of new events is handled by a number of networked devices, rather than all of them) may accelerate processing times.
Block and tackle
Until these challenges are overcome, blockchain uses will be limited by the amount of processing power required to record and verify each transaction. However, below are some of the potential ways in which blockchain technology might be deployed in the future:
Because information can’t be replicated or copied, files can only be accessed by a designated owner or recipient. A blockchain ledger could prevent documents or media files being opened without permission, protecting copyright and optimizing file security.
One example of evolving blockchain uses involves the development of self-executing contracts, which are triggered in response to an event or signal. Signing off a contract could instantly release payment, or payment could instantly activate a contract.
Because the blockchain can’t be corrupted or manipulated, personal identification would be definitive. Unique digital IDs could ensure only an authorized user logs into certain portals, potentially reducing or even eradicating online identity fraud.
There’s excitement around the potential for online voting, which would banish issues like hanging chads and electoral fraud to the history books. A public ledger of voters, each with a unique ID key, could ensure even the housebound or agoraphobic are able to vote.
The existing system of land registration is archaic and inflexible. Blockchain uses might include tamper-proof digital records of land ownership data. It would also be easier to determine who to contact for issues like neighbor notification.