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In the early days of the Internet, the evangelists were trying to get people to believe in its vast potential, and there were many who said they did not believe in this new technology.
They did not believe that the information would be stored on a server, but instead insisted that it would continue to be stored on a CD-ROM or diskette. How wrong they were. We think that the blockchain has a great Internet equivalence in the middle of the years & # 90;
Blockchain is a technology that effectively connects people or companies directly or peer-to-peer.
People have shared information through the internet in the last 20 years. We at ConsenSys believe that blockchain, as a technology, offers valuable Internet so that people not only exchange information, but evaluate from person to person or on a peer-to-peer basis. Using the blockchain, we can now transfer ownership of a car, cast a vote in an election, or transfer a share certificate without having to go through a third party such as a bank, a government or a stockbroker . What we have today in society are entities that control that transaction process, which owns the process and fits into the middle of the process.
It is important to note that there are two main blockchains out there. One is the Bitcoin blockchain that helps make Bitcoin work. The other form is Ethereum, created by the founder of ConsenSys Joe Lubin together with Vitalik Buterin and Gavin Wood. In fact, Ethereum is a programmable blockchain that allows us to create multiple uses and applications on Ethereum.
Blockchain as a technology has the power to eliminate that centrality and decentralize the control of this process.
Change is often feared but it is inevitable anyway. The Internet has taught us this.
The key characteristic of the blockchain is that all that is stored on the blockchain is there forever, the information is "immutable" and can not be erased. This means that the information stored on the blockchain gives us a level of transparency that does not exist today in the modern world.
It means that if I own something at a given time, and when I transfer the property or the value of it to you, there will always be a record I have owned on blockchain.
It also guarantees that the record can not be manipulated, ie that no one else can enter and edit the record. We describe it as the "trust machine" within the industry. So that record creates trust.
Another fundamental characteristic is that it is decentralized, so no person or thing or government or entity has the information.
This means in effect that I have a copy of all my information, but also you and the next person. Can you imagine a world where everyone has access to the same information? Information as we know it is generally stored in a central place, in a place where a person or company has the information. Blockchain threatens that pattern because every person or participant in the "node" has a copy of that information.
This guarantees a level of trust and transparency that does not exist until today. For example, if I say I have € 100, and if I try to change the blockchain to say I have € 200, then others will see that this information is not correct. Therefore it will show other users that what I am doing is incorrect, fraudulent and that the transaction should not exist in the shared database. Blockchain is also described as a distributed master book. In other words, this means that instead of holding a master who tracks all the transactions and therefore having to reconcile different copies of the master books, we can get to a place where there is a shared ledger in the middle that records anyone who has access to the book.
A great feature of Ethereum, or programmable blockchain, are the "smart contracts". These are self-executed contracts where certain criteria are met, so a good way to think about it is to use an example of travel insurance. If you purchase insurance – for reasons of argument, we say it is € 100 – and after eight hours your flight is delayed, you are entitled to file a claim. Typically you will have to go online and fill out a form and your money will be repaid six weeks later.
Let's go over it again, you will have paid a fee, you had a bad experience and then you have to do more paperwork and after a few weeks you will have some money back. It looks like a rather terrible customer experience.
So, how do we use blockchain technology to improve the customer experience? For example, you are willing to pay € 110 for your travel insurance if you knew that after eight hours, the money owed goes directly to your bank account and you do not have to make any "life administrator". The use of a smart contract automates the transaction and returns the money to you almost instantly.
This is just one example of how blockchain can change the way we do things and this technology can be applied to commercial finance, supply chain management and we are also in conversations with the EU on how to implement this technology for reform our public sector. There are countless applications for blockchain technology.
- Lory Kehoe is managing director of ConsenSys
Sunday Indo Business
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