Music, Money and Markets: Bringing Blockchain to Life
Despite its shadowy origins, Blockchain has quickly emerged as one of the great hopes of financial services technology and looks set to solve a number of problems that have continued to plague the industry in the digital-first age.
Perhaps most importantly, Blockchain offers a viable solution to the ‘double spend problem’. A common challenge to many digital currencies, it occurs due to the ease at which digitalized data can be duplicated, allowing a single token to be spent more than once. The problem has implications far beyond currency: any digital asset – from ownership deeds to patents or distribution rights – are left at risk. In answer to this, Blockchain uses a scheme called ‘proof-of work’ – essentially adding, to all blocks of transactions, a processing signature generated by a decentralized group of participants. And as Blockchain is a decentralised system, it doesn’t rely on any trusted third parties to monitor or process the transaction – meaning it can be fully independent. Remaining independent is an important factor, ensuring that transactions can be made easily (24 hours a day, any day of the year, to any location), that there are no hidden fees, and that all data records can be accessed and checked by anyone and everyone, even if the identity of the transactees and the transaction details are cyphered.
Blockchain also brings a number of other important advantages in verifying digital asset transactions. All transactions are time stamped to make clear who owns a digital asset at any time. Using a multi-signature process – in which more than the sender and the receiver sign-off or permission is required for a transaction to go through – more complex transactions are possible. Additionally, as an open source technology, it is accessible to anyone and any business.
Although most closely linked to the bitcoin cryptocurrency, Blockchain has already been implemented in a number of other peer-to-peer transaction systems. Here is a selection of the most intriguing:
Ethereum was built as a platform to manage ‘smart contracts’ – a peer-to-peer contract defined in programming language that can automatically be executed when the right events occur. It poses a real threat to traditional contracts and allows developers to do everything from creating markets and store registries of debts or promises, to moving funds in accordance with factors that can be defined long before they become a reality.
Estonia gives foreigners outside the country the opportunity to get an Estonian e-resident ID card. It allows anyone around the world to take advantage of the secure authenticated online identity the Estonian government already offers its residents. This way, Estonia’s E-residents can notarize their marriages, birth certificates, business contracts and more. This initiative that may expend around the world is definitely boosting Estonia economy.
Offering an alternative route to commerce, OpenBazaar is an application of Blockchain that allows users to create their own marketplace or shop from which they can sell or purchase goods and services directly from other users. In the true vision of Blockchain, it’s a fully peer-to-peer network that functions as a community rather than traditional organization.
A home for artists that allows them to own and control the content they create, Ujo Music aims to address the thorny issue of global royalty distribution and licensing by permitting direct transactions between artists and consumers. The platform first launched as an offshoot of Ethereum, following experimental singer-songwriter Imogen Heap’s decision to release the licensing for her track Tiny Human via Blockchain.
There are countless other examples of how the technology is being used, including a project in Brooklyn, New York, where Blockchain is used to buy and sell energy provided by a solar powered micro-energy grid running across the neighbourhood’s rooftops. Over in the public sector, the immutability of Blockchain has led to the technology being touted as a potential solution to storing healthcare records, updating the land register, and allowing votes to be cast remotely.
Of course predicting the future is always a risky enterprise, but we can be confident that Blockchain will continue to shake the economy over the next five to ten years, helping to push business models into new and uncharted territory.
Despite much hype, the hard work is just starting for Blockchain – head to our post for the next instalment in the series, in which John Hall, Head of Strategy & Portfolio at Atos in the UK and Atos Scientific Community Member, will be looking at some of the key challenges the solution still needs to address.
For a full introduction to Blockchain – check out my earlier blog post.
Blockchain is the focus of this year’s Atos IT Challenge, the 1st international student competition dedicated to technological innovation launched in 2011. The students will come up with an innovative concept for an application based on blockchain technologies demonstrating how the principle of secure, public ledgers can be used to disrupt conventional business models – visit www.atositchallenge.net