Why Blockchain?

March 29, 2016

Blockchain could revolutionise the way we operate on a day-to-day basis, from money transfers to real estate litigators. All agree that it could be revolutionary – just no one quite knows how.

Probably best known as the public ledger and database for the digital currency “Bitcoin”, the monetary capabilities and potential are just the tip of the blockchain iceberg.

Bitcoin is built on ground-breaking technology for which money is merely one of the possible applications. Blockchain software enables a network of computers to maintain collective book keeping via the Internet, which is neither closed nor controlled by one party like your average bank or notary, but is public and is available in one digital ledger which is fully distributed across the network. All transactions are logged including the time, date, participants and amount of every transaction.

Large professional services and finance companies such as PwC, Credit Suisse and Goldman Sachs are rushing to develop commercial offerings that will put them ahead in the tech race, proposing services such as crypto-security and innovation workshops for industry leaders. But what are the smaller, purely blockchain based firms offering?

Start-up Blockai is offering a service that helps digital artists claim ownership of their creations and protect their copyright. According to some experts, the current state of copyright on the Internet is in crisis, with the ability to save and share digital content as your own material at the click of a button. CEO of Blockai, Nathan Lands, has created the commercial offering of fast and cheap registration of content as an excellent option over the alternative, which for many artists is nothing. While this method has yet to stand up in court, Nathan has stated that they believe a record created on blockchain using Blockai should be sufficient evidence in a court of law.

This start-up is taking advantage of one of the main perks of using the blockchain, the storage of a permanent immutable record. It’s clear to see that for such a service, where the alternative is expensive, slow or non-existent, there is obvious value to using the blockchain.

Another start-up that has identified a use for blockchain over its monetary potential is ShoCard. ShoCard is a virtual identity card platform that consumers use through a mobile app, built on top of the public blockchain data layer. The website states it will be as easy to use as displaying a driver’s licence; but the idea is that due to the extra layers of security, even banks will be able to rely on it. As it doesn’t store the user’s data on the blockchain, it avoids any Data Protection Act issues – instead it simply stores cryptographic proof that the data is correct.

The platform uses public/private key encryption and data hashing to safely store and exchange identity data. The pitch here is that it could save banks millions in identity theft and credit card fraud, assuming they trust it enough to use it.

Trust may turn out to be the true obstacle for many blockchain based businesses. As large corporations and angel investors rush to get in on the blockchain action, swamping the tech scene with applications, enterprise businesses still need to be convinced that blockchain is secure and long-term.

While some speculate it is still too early for consumers to truly understand the blockchain, one thing that start-ups and large firms have in common is the belief that consumers don’t necessarily need to understand the technology, as long as it’s simple and convenient to use. It worked for the Internet.

Checca Aird is a Forensic Technology Data Analyst at PwC UK.