Back in December 2017, the Long Island Iced Tea Corp rebranded itself as the Long Blockchain Corp. Doing so saw the unprofitable company’s shares soar by almost 300%.
This is just one of the many (albeit one of the more outlandish) examples of the hype around blockchain that we've seen over the last couple of years as the value of Bitcoin has climbed, and the number of cryptocurrencies, ICOs and promises of blockchain startups have proliferated across the digital world.
For our October Leaders in Change event, we invited Rhian Lewis, a software engineer and consultant specialising in blockchain technology, to take us through the current state of play in this much-hyped area of innovation and dispel some of the myths around it.
We're still at a relatively nascent stage of the blockchain journey – Rhian drew a parallel with the internet in 1995: some people see its potential, but most aren't quite sure what to make of it.
Defining the landscape
A blockchain is essentially a data structure that has certain attributes.
It is decentralised. It has no central point of control and instead relies on a network of nodes to validate transactions and record data.
It is immutable. It uses cryptography and each record is linked in a chain that goes right back to the first record. This chain link makes it very hard to edit or rewrite and effectively bakes in security into the foundations of this technology.
It is transparent. Rhian gave the comparison of a Google Sheet used by a sports club to collect subsidies. While it's not a true comparison as Google Sheets don't have version control, it does record all changes made, and who made them, so there is a single source of truth that is accessible for everyone who is given permission to view this.
It is secure. Blockchain architecture is open source, has been around for a decade now, provides access to billions of dollars – and it's never been hacked.
If you'd like some more insights on what Blockchain is, I found this great collection of plain English definitions that may help it 'click'.
One very popular application of blockchain is in cryptocurrency, the most famous being Bitcoin. A cryptocurrency is a peer to peer electronic currency that uses blockchain to track and validate ownership and transfer of digital currency.
Rhian explained that after becoming interested in cryptocurrency, she built a script to keep track of the changing valuations, turning this into a popular portfolio tracker. She, like most in the industry, she paid close attention to the valuation of Bitcoin and others – a common measure being the Pizza Index, which refers to the payment of 10,000 Bitcoin for two pizzas in 2010. With those coins now worth over $60 million, it's possible he has some buyers remorse.
But on a more serious note, this index is a great insight into the history of Bitcoin, with wild growth over the last eight years, before seeing a sharp crash in December 2017, and since holding reasonably steady – it's not hard to see the appeal of cryptocurrency.
Going public, keeping things private
Not all blockchains are created equal. Perhaps counterintuitively, there are organisations building private blockchains. A key difference between public and private/consortium networks is often the use of tokens. Tokens are used by public networks to incentivise participants.
There are some really interesting use cases for a more selective blockchain network. For example, banks are working together as consortiums to allow them to manage interbank transactions – blockchain is already being used by banks across the world to expedite settlement payments. One example is Corda. Participants run nodes to transact with each other – they don't need tokens to incentivise as the value is in the transaction itself.
However, for most businesses attempting to build a private blockchain, they are basically just creating a slow database. Rhian argued that 90% of the current applications where blockchain is being used don't actually need to use blockchain technology to achieve their end goals.
But staying public does have its own challenges. For example, Ethereum, a well-known platform based on blockchain technology that enables developers to build and deploy decentralized applications was brought to its knees by a rush on buying cartoon cats as part of a game called cryptokitties. Yeah, really.
Those involved in this new world are exploring the possibilities of this technology with varying success – but there's a big challenge ahead for the industry in using these tools in the right way, particularly for these deliberately decentralised networks.
The future of blockchain
The last eighteen months have been a rollercoaster of sorts as the world finds its feet with blockchain and cryptocurrencies. Since Bitcoin prices fell, the industry has been a little more subdued in the media. but it's certainly not diminishing – the job market for blockchain roles is growing fast, and companies across a huge range of industries are engaging with this technology. It's most associated with financial services and smart contracts, but it's paying an important and growing role elsewhere.
For example, just one container ship travelling from China to Europe can generate up to 2kg of paperwork, created by a cohort of shipping companies, merchants and customs and border forces who frankly, don't trust each other. By relaying this information by way of a blockchain, the process becomes much more trustworthy and efficient.
It's been trialled by the UN to better manage food distribution and has applications in everything from energy and emissions data to copyright and property ownership.
The future will focus on interoperability, which is where different blockchains will be able to work together to serve increasingly complex use cases.
There is still some resistance to overcome first. Part of this is in education, and managing expectations accurately. As Rhian pointed out, just a few years ago, there was similar resistance to the idea of open APIs, and today they are ubiquitous. The challenge will be keeping everyone focused on where blockchain should be used (and where it shouldn't), continuing to debunk the myths around this technology – and preempting people's love of cartoon kitties.
About Rhian Lewis
Rhian Lewis is a software engineer who is the co-developer of altcoin portfolio tracker CountMyCrypto. She is also the co-host of London Bitcoin Women, which she founded with a friend in 2014. She has a BSc in Economics from UCL and is a former digital journalist at @thetimes.co.uk. She is a regular conference speaker and educator on blockchain technology, cryptocurrency and cryptoassets, and writes about blockchain technology at medium.com/@rhian_is. She also runs training courses aimed at test engineers on blockchain projects and is an instructor on the B9Lab Ethereum QA Engineer course.
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