Blockchain —potential society changer
Shifting trust from institutions towards technology
For the past year I have been working with Blockchain technologies. I believe that the Blockchain technology has a prospective to change the society as we know it. A potential to substitute the basic functions of banks, insurance companies, administration and law systems.
A hard statement to get you aware of its importance. In fact, the technology caught a lot of attention that corporations started building alliances to research the technology (Enterprise Ethereum Alliance — EEA). Even Putin himself sat down twice in 3 days with the creator of Ethereum, Vitalik Buterin.
All-around trust enabler
Blockchain is a universal technology that can be used in all parts of the society = all around.
Every sector starting from banking, finance, law, insurance, policies agreements exists because people trust in their institutions. The foundation of a society is based on trust.
People keep their money in banks, entrust their security and freedom to the police and law institutions. Properties like houses and cars are insured with insurance policies.
All the regular things in daily life are based on trust. Supermarkets selling products is a process of exchange. When a person buys products from a supermarket in Vietnam, they pay with Vietnamese Dong. The supermarket trusts in the value of the dong and it is willing to exchange products for dongs. If the money are fake, the supermarket is protected by the law system.
It is hard to imagine, but this (institutional) trust can be achieved with technology. The Blockchain technology enables trust by default, without the need of (third-party) institutions, in every part of a society.
Nowadays, we use all kinds of global services and applications. Apart from this trend, administration institutions and societies are still slow in catching up, cooperating and leveraging the available technologies.
I would present a simple scenario.
A car passes on a red light, a camera takes photo of the accident. A fine is printed and delivered to the car owner’s address. The owner will have to pay the fine or complain about it in court of law. In any case, the process would probably involve police, postal service, banks and a lot of time.
All procedures are done step by step. Even if all processes are done fast, things are getting slow in the connection points between institutions. For a car registered in another country, it is a “mission impossible”.
In a scenario where Blockchain is applied, the process can take less time than the car would take to reach to another crossroad. The whole process would be executed by a Smart Contract using cryptocurrencies. Funds would be taken from the car owner’s blockchain address, the penalty record can be automatically recorded in the driver’s license.
This can be applied in any corner of the world. All the steps, done by each institution, are done at once, applying the same rights and rules. Simple and effective.
From technical stand point, the simple scenario is feasible with on-the-shelf technologies like cloud storage and computation. Yet, it is very hard to synchronize the whole system at once.
The Blockchain technology does this synchronization by default.
Every participant of the network is aware of the global state of the system. None of them can crack it (unless they control 51%).
All procedures that take time can be done at once with a high level of trust.
Every exchange of information is transparent for all participants, but the identity is kept private. Everyone would know that someone paid a fine to the Smart Contract. Only the person and the police will know the real identity and the reason for the fine.
The privacy is maintained, but the transparency of the institutions is increased.
I intentionally didn’t use any technical terms and details. I just mentioned several times trust and technology. This is what lacks today.
People tend to be more and more skeptical about technologies. Even IT guys don’t want to experiment too much with new technologies.
My goal is to bring you closer to the idea of the Blockchain technology. It HAS A POTENTIAL of building better societies while keeping the common trust safe. It is totally transparent and public, but it cannot be controlled by a single participant.
Each change is verified and confirmed using a consensus mechanism. The way it functions is closer to how a society functions and that is probably why it is applicable to any sector. It is a technology that has a different workflow and architecture compared to a common Internet technology.
Personally, I am convinced that it will be the next big thing. The potential is there, but it may not be reached until it is adopted by the majority of the IT community. I hope my contribution to people that talk IT would provoke them to talk Blockchain as well.