Technological Innovations and the blockchain

The rapid advancement of technology has empowered society tremendously in the past two decades by offering new ways of communicating, sharing, accessing, storing, and creating information. This is due to the birth of the internet and the impulse of software development which has led to prototypes used to only be heard about in science fiction novels. However, in recent years, society started witnessing the development of robots, artificial intelligence, machine learning, flying vehicles, nanotechnology, and distributed ledger technology (DLT), also known as the blockchain. From the above-mentioned technologies that we are bearing witness to, blockchain technology is worth noting since it’s been flying under the radar for quite some time now.

A blockchain is a continuing growing list of records which are distributed through decentralization and secured by cryptography. One can think of a blockchain as a decentralized database which is immutable, transparent, and more efficient than the present systems being used to read and access data. What makes blockchain technology so interesting is its mysterious origin and manifestation in a form of “magic internet money” or the cryptocurrency known as Bitcoin. Although its creator(s) is unknown(but possibly the NSA), it has gained a lot of attention in recent years due to its first use case when cybercriminals discovered they could use it as a method of payment in the black market of the internet to purchase illegal substances. Thankfully, academic researchers, financial institutions, and investors have rinsed the dirt off Bitcoin and began to realize its underpinnings — the blockchain, has vehement potential to disrupt several industries such as insurance, real estate, financial services, health care, and others. For the purpose of keeping this essay no longer than it should be, I will provide two examples of how blockchain will disrupt both the financial medical sector.

Blockchain technology is reshaping the way one person pays another. This is due to the fact that with said technology, the value being transferred doesn’t have to go through a trusted third party such as a bank or some other institution. If Alice owes Bob 10 dollars, then Alice can pay Bob the 10 dollars directly even if Bob happens to be on the opposite side of the world where it’s 5 PM on a Sunday. Bob would also get his 10 dollars in a matter of minutes mitigating any counterparty risk. What’s more interesting is the number of start-ups that have surged in the past year alone. Ethereum, another cryptocurrency project created by Vitalik Buterin and co-founded by Charles Hoskinson of IOHK (Input Output Hong Kong), has introduced programmable money that can execute a set of instructions known as “smart contracts” that allow them to mimic real world financial agreements. There are hundreds of projects that aim to do different things and not necessarily have anything to do with transferring money.

Factom, whose headquarters are in Austin, Texas, is taking the roll of changing the way data is accessed by securing it with methods that guarantee any form of tampering and allowing transparency and thus ending corruption of data. Data integrity is kept by anchoring Merkle trees into the bitcoin or any other blockchain (it’s really far more complex than that). By doing this, Factom can be used to secure data such as medical records and even IoT devices. In fact, the government of Japan recently released information stating that the Factom protocol will be used to the secure social security records of its citizens. Furthermore, the Department of Homeland Security is looking into implementing the technology to secure cameras on the border between Mexico and the United States from cyberattacks. There’s really much more to it than just that, but the technicalities and abilities of the protocol do not fit the scope of this essay.

From facilitating criminal activity online to securing cameras on the border between nations, blockchain technology has proven itself innovative amongst the other big players in the tech world. Every day there seems to be a new bank or government looking into using the technology due to its wide array of applications. As the World Economic Forum states,

The blockchain creates both opportunities and challenges for countries. On the one hand, it is unregulated and not overseen by any central bank, meaning less control over monetary policy. On the other hand, it creates the ability for new taxing mechanisms to be built into the blockchain itself (e.g. a small transaction tax).

Finding the correct approach for governments to regulate the technology will definitely be something worth beholding.

REFERENCES

1. World Economic Forum. (September 2015). Global Agenda Council on the future of Software and Society. Deep Shift. Technology Tipping Points and Societal Impact. Retrieved from: www3.weforum.org/docs/WEF_GAC15_Technological_Tipping_Points_report_2015.pdf

2. Okamoto, Katsuji. (June 13, 2017). Press release: a joint development with Atrris. Kaula Inc. and Atrris Corporation have formed a joint development of a usage record management system utilizing Factom’s blockchain solution. Retrieved from: https://kaula.jp/2017/06/13/kaula-atrris-factom/

3. U.S. Department of Homeland Security. (February 21, 2017). Science and Technology. News Release: DHS S&T Awards Nearly $1M to Five Start-Ups for Phase 2 R&D. Retrieved from: https://www.dhs.gov/science-and-technology/news/2017/02/21/news-release-st-awards-nearly-1m-five-start-ups-phase-2-rd