When you vote, do you doubt that your votes really count? If you meet someone online, how can you be sure he is who he claims to be? What makes you sure that the source is really fair when you buy what is called “fair trade” coffee?
To really verify these issues, you need a system that’s used to store records, and can be verified by others, while ensuring security. At the same time no one can modify the record to trick the system because everyone using this system is watching. Such a system already exists.
The software technology behind it is called Blockchain. Blockchain stores information on a network constructed by personal computers. The data is not only decentralized, but is also stored decentralized. This means that there is no company or individual being able to own the system and everyone can use and assist in its operation. This is the focus of the Blockchain, because no one can stop or damage the network.
Users run the system through their computers, and each computer has records submitted by others. These data are called “blocks” and are arranged in “chains” in chronological order. The blockchain is mathematically encrypted to ensure these records. It cannot be forged or altered by others. You may have heard the first killer application of blockchain: a digital currency called Bitcoin, which you can send to anyone, even completely strangers.
Bitcoin is not the same as gold streams such as credit cards and PayPal, because there are no banks and other financial institutions that get involved. Conversely, people from all over the world assist in trading digital currencies. They use computers to verify other people’s Bitcoin transactions, and get a small fee from it. Bitcoin uses the blockchain to track the owner of a digital currency, so a unit of money can only be owned by one person. It will not be reused, just like real-world counterfeit banknotes.
Bitcoin is only the beginning of blockchain applications. In the future, blockchain can be used to manage and verify online data, allowing us to start a company. This company operates entirely through algorithms, which also makes autonomous cars safer. It can also help us protect our online identity, and even track hundreds of millions of IoT devices. These innovations will change our lives forever.
If you want to know more about blockchain, please visit www.iftf.org/blockchainfutureslab.
