Have you ever casted a vote? Once you have, have you wondered about the certainty of that vote being counted for your candidate of choice? Elections now face many challenges, including the very premise of legitimacy, as evidenced by the recent US presidential election. Most of the results in a re-election or a recount can remain uncertain, as it happens under the same central authority which was responsible for the initial discrepancy. This is a simple example of how blockchain can help in the development of a transparent and an immutable system.
What is blockchain, and are the implications limited to cryptocurrency? The answer is no. Apart from its adoption by Bitcoin which brought it to the limelight, blockchain technology has gained traction into banking, agriculture, pharma, logistics and many more industries which can benefit from decentralised and immutable tech.
The following interview by Cointelegraph with blockchain evangelists and authors of Blockchain Revolution Alex and Don Tapscott, provides a good overall idea of where the technology is heading in this new transactional internet era.
The importance of Blockchain
Blockchain technology is reinventing transparency of transactions and contracts. Distributed ledgers will affect information disclosure and economic interactions in many industries, whilst improving security as data is not stored in a central database. The use of blockchain can also facilitate the monitoring of decisions by storing contracts (smart contracts) and transactions in a manner that is comparatively inexpensive, and inherently visible to anyone who has access to the internet. One can view any transaction on a public ledger. For Etherium, it is etherscan, and for Bitcoins, it is Blockchain.com. Be it public and permissionless, such as the Bitcoin or Ethereum blockchains, or private and permissioned, such as Ripple or Hyperledger: in principle, transactions are traceable with attribution of actions to identifiers. Therefore, the technology has a native high level of transparency. The added advantage is, that as users we are able to protect the privacy in both private and public blockchains without a centralised third party having access to our data.
Establishing smart contracts, opens a new opportunity by transferring the execution of a contract by the fulfilment of pre-defined arbitrary rules which auto execute a transaction. These smart contracts will provide transaction security that is superior to traditional contract law, and reduce transaction costs of coordination and enforcement. Smart contracts can be used for simple economic transactions like sending money from A to B, registering any kind of ownership and property rights such as registries and intellectual property, or managing smart access control for the sharing economy. These smart contracts are paving the way to efficient governance of more complex transactions through the emergence of Decentralised Autonomous Organisations (DAO) such as R3, which implemented the Corda Enterprise network.
With blockchains and smart contracts, we can now see the emergence of a world in which contracts are embedded in digital code, and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. A world in which, every agreement, every process, task, and payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediary services such as lawyers, brokers, bankers and public administrators may no longer be a necessity. Individuals, organisations, machines, and algorithms would freely transact and interact with one another, with little friction and at a fraction of the current transaction costs.