This tutorial covers a small set of transformational applications of the blockchain in progress today.
- The possibilities of blockchain are staggering but they are also relatively speculative. Let's take a look at actual real-world uses that extend beyond its original use for bitcoin. Here's the first example. There continues to be a great interest in technologies to help track stolen diamonds, in addition to knowing whether a diamond is associated with a conflict zone. A startup called Everledger has begun to use blockchain to store information on almost one million diamonds.
Each diamond is scanned to glean 40 unique points that are then condensed into a digital footprint. This is then entered into the blockchain. Each time a diamond moves say from a seller to a buyer, a new block is created and over time a full, secure digital trail of ownership is established. The adoption of this solution is growing and Everledger is attracting attention from investors. Beyond diamonds, the same tool may soon be expanded to manage and track art, expensive watches, luxury cars, and other unique items of value.
This blockchain solution potentially solves a longstanding intractable challenge. For the next example, how about a venture capital firm without essential owner, where funding decisions are made by shareholders not VC's. The DAO which stands for decentralized autonomous organization, raised $168 million from cryptocurrency and is entirely run by those that are invested in it.
Its governance is completely transparent unlike traditional VC's where functions and rules are private and opaque. The DAO has not been without serious challenges including several security breaches. Not necessarily dispelling the security promise of blockchain, but more a reflection on its particular implementation. It's fair to say the bonus of innovation exhibited by the DAO is subject to the same teething problems that introducing any new high risk product and service experiences.
And then to these such as the DAO raises the stunning possibility of autonomous organizations; businesses without leaders, without a primary geographic location, and not beholden to any government laws. Now whether this can be sustained, only time will tell. For the final example we'll look at voting on the blockchain. In 2016, Colombians voted on a peace treaty between the government and FARC, the Revolutionary Armed Forces of Colombia.
There were a variety of limitations on enabling the six million Colombians living abroad to participate in the vote. So an organization called Democracy Earth experimented with the blockchain to capture their voices online. As we discussed earlier, the inherent challenges of online voting in any context is proving an identity to be true. Using this new technology enabled authenticating votes. In addition, to push voting innovation, Democracy Earth gave citizens more than a no and yes choice to the peace treaty.
They were given sub-themes to indicate by vote the relative importance of each one. While the votes could not be added to the official ballot, this voting experience did give a voice to a larger group of Colombians and has triggered a rigorous debate in Colombia about the use of online voting in the future. The experiences and results are being studied by many around the world. If you're like me, it's hard not to be impressed by these first attempts to innovate using the blockchain.
In each of these instances, historically big and difficult problems are finding a fresh and innovative solution. As with any new emerging technology, these first movers are taking risks and laying the groundwork for everyone else who follows.
Jonathan begins by describing some of the current challenges with the Internet, including existing risks and security problems such as identity management. Next, he describes how traditional online databases function, so that you have a basis for how the blockchain redesigns this function. He then describes how the blockchain becomes a potential solution for many of the existing limitations of online databases. Since the blockchain has its genesis in Bitcoin—the digital currency—he provides some background on that too. He also discusses how blockchain technology actually offers new capabilities beyond simply solving old problems. To wrap up the course, Jonathan shares steps you can take in your organization to understand the implications of the blockchain.
- Explain what Captcha does.
- List the core benefits of a traditional database.
- Assess whether Bitcoin requires any intermediaries in a transaction or not.
- Explain why blockchain technology is useful beyond cryptocurrency.
- Identify some ways to reduce the risk of blockchain innovation.