Bitcoin, the most well-known cryptocurrency, has been associated with dark and unsavoury topics such as human trafficking, money laundering, and most recently indecent image transfer.
As such, cryptocurrencies, and their foundational technology blockchain, have been negatively tainted in the public eye.
While we cannot shy away from confronting this dark side of cryptocurrency, there remains significant confusion around the fundamentals of the technology, primarily stemming from the misbelief that blockchain is synonymous with cryptocurrencies. Contrary to this popular belief, blockchain has the potential to provide serious benefits to society in a multitude of ways – not all of them financial.
On a technical level, blockchain is a distributed, cryptographically-enabled database which provides uniqueness of digital identity, network and user modularity, and a peer-to-peer infrastructure. These fundamental features enable networks to have built-in transparency, audibility, and accountability, providing simple solutions to problems experienced by individuals, SMEs, governments, and larger corporates.
Take the pharmaceutical industry. In the UK, people are at threat from counterfeit drugs which enter the supply chain via illegal means. Solving the problem of counterfeit drugs is a necessity for the industry. Through harnessing this new technology, whereby each stage of the manufacturing supply chain is recorded on a blockchain, increased accountability and data security for drug production can be established.
Blockchain can also offer protection for physical assets. Once an individual buys something like a watch or a diamond, this information can be logged on a blockchain, giving a clear and secure record of who has ownership. This makes theft more difficult to profit from, as it is clear that the item has been stolen and who owns it.
Recent events with some of the largest tech companies have highlighted just how incredibly valuable and highly sensitive our personal data is.
Blockchain can offer a way to give individuals the control over their data. Using a blockchain, individuals can provide timed access of their data to companies when the company needs it, rather than just allowing firms to hoard the data.
This has a two-fold benefit: first, companies no longer run the risk of losing customer data to hacks, and second, customers have better visibility on who is accessing their data, and why.
Another key misconception fuelling the blockchain scepticism is the myth that, because it is decentralised, anonymous, and open to all, thereby security, accountability and responsibility are not possible. These are clearly fundamentals required for business.
However, in reality the technology is not dictated by the restrictions of the existing bitcoin or ethereum networks, which are fully decentralised, pseudonymous, and public. Blockchain can enable a full spectrum of customisable rules and bespoke features that can be tailored to a variety of products or services.
Much like the internet, blockchains development will result in an interconnected network of multiple blockchains that will transform our daily lives for the better. There does need to be caution from regulators and governing bodies, however this must not stifle creativity. Rather, it should target education to accelerate progress, so we can all benefit.
If we are to make the most of the potential blockchain can bring, we need guidance on applications and desired outcomes for how we want this technology to support and enable our society. The UK has global leading foundations currently taking advantage of these, and it would be a catastrophic loss to not embrace the opportunity presented by blockchain and put a stake in the ground.