The blockchain distributed database was a key factor in differentiating Bitcoin from traditional currencies and transactions; its permission-less access and tamper-proof data storage appealed to an audience which prized transparency over all else. But this technology has the potential to do so much more.
As Ben Dickson at TechCrunch explains, blockchain might well be the answer to an inevitable bottleneck in cloud technologies, which have the potential to undermine the efficacy of IoT ecosystems.
“Blockchain offers an elegant solution to the peer-to-peer communication platform problem,” he says. “It is a technology that allows the creation of a distributed digital ledger of transactions that is shared among the nodes of a network instead of being stored on a central server. Participants are registered with blockchains to be able to record transactions. The technology uses cryptography to authenticate and identify participating nodes and allow them to securely add transactions to the ledger. Transactions are verified and confirmed by other nodes participating in the network, thus eliminating the need for a central authority.”
Decentralising all industries
It’s not just the IoT that stands to benefit; the finance sector has been interested in blockchain for a while, and even musician Imogen Heap has praised its ability to hand back control to creators. “Artists very rarely receive meaningful data relating to their tracks,” she says. “Getting the music out there and distributed is not a problem…Where the disruption now needs to happen is in the curation of the feedback, on the data that we, as artists, need to receive.” Heap believes that blockchain is “the catalyst for change” in the music business.
Elsewhere, Democratic presidential nominee Hillary Clinton has included blockhain in her technology and innovation agenda for the public sector, with her campaign stating: “We must position American innovators to lead the world in the next generation of technology revolutions — from autonomous vehicles to machine learning to public service blockchain applications — and we must defend universal access to the global, digital marketplace of ideas.”
However, there are fears that complex and antiquated regulatory roadblocks in the US will cause a “blockchain brain drain” as start-ups in this space find themselves driven abroad. “In many cases these businesses face the very real risk of simply going out of business because they cannot operate in enough markets at the outset to survive,” writes Perianne Boring at Forbes. “Ultimately, the United States blockchain industry is lagging behind foreign markets in the pace of innovation.”
One company which is all for upping the pace is IBM, which launched its blockchain innovation space in New York this week. Developers in the ‘Bluemix Garage’ will explore the full potential of blockchain in finance, insurance, and other areas.
“This strategic choice to pursue an open form of blockchain development will make it easier for IBM to attract coders, who will not have to fret the skills they acquire will be tied to one company,” says Fortune’s Jeff John Roberts, adding that blockchain is still too new an arena to pick winners and losers.