Blockchain, the technology that underpins Bitcoin, may be poised to inspire solutions to key societal challenges, from trading carbon emissions to maintaining healthcare records. But only if the companies and developers involved can agree on things.
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That’s the argument Brian Behlendorf, the executive director of Hyperledger, an open source project overseeing the development of various blockchain technologies, will make Tuesday at Business of Blockchain, a conference organized by MIT Technology Review and the MIT Media Lab (follow the conference live on Twitter with the hashtag #bizofblockchain).
Behlendorf will say that ongoing efforts to deploy these systems in different settings represents a technological shift with broad societal implications. “This is an opportunity to reinvent how much of the world works,” Behlendorf said, speaking ahead of the event. “This isn’t just about finance.”
The blockchain on which Bitcoin is built serves as a distributed, cryptographically-signed ledger that makes it possible track and verify payments without any centralized authority. The ledger is maintained by computers performing computations that eventually generate more bitcoins. The same distributed cryptographic approach can be used to verify all sorts of transactions (see “Why Bitcoin Could Be Much More Than a Currency”).
At today’s event, Behlendorf will describe, for example, how Hyperledger has been helping De Beers, the South African diamond company, use a blockchain to track and distinguish legitimately acquired diamonds from those sourced from conflict regions. By carefully examining the blockchain data supplied with each diamond, it should be possible to identify suspect diamonds and fraudulent transactions. Others are looking at how blockchains could verify carbon-trading deals, or as the framework for securing digital healthcare records, Behlendorf said.
One of the big challenges with Bitcoin and blockchain systems is their technical complexity and related questions over security. Hyperledger is meant to help with this issue by offering technical guidance and leadership to the community involved with developing its technology. This is also meant to help with some of the infighting within the Bitcoin community that has arisen as a result of its decentralized nature, threatening to undermine the currency even as its value rises.
Indeed, Behlendorf warned, the excitement and big claims surrounding Bitcoin and blockchains could turn them into a victim of their own success. “There are over-inflating expectations right now,” he said.
However, Behlendorf, who was previously the main developer for the world’s most widely used Web server software , remains bullish. He suggests that blockchain technologies could have to have the same transformational potential as the Web.
Bitcoin gained a huge amount of attention a few years after being released in 2009, as geeks dreamt about technological disruption to the world’s financial system and speculators spied an opportunity to profit from the currency’s ballooning value (see “What Bitcoin is, And Why it Matters”). Bitcoin’s own blockchain serves as the basis for a number of non-currency applications, but various alternative blockchains have emerged, too. Hyperledger is developing one that is designed to be more amenable to non-currency applications.
At the conference, which is being held at the MIT Media Lab, speakers will discuss cryptocurrencies and other financial instruments, as well as various emerging blockchain applications. These include monitoring energy transactions, tracking supply chain logistics, and enabling payments for listening to music online.
Many of these are already being deployed. The state of Delaware, for instance, is studying the use of blockchain technology from a company called Symbiont for business contracts. IBM and a Chinese company called Hejia recently announced a blockchain system for supply chain management.
Despite the challenges ahead, Behlendorf isn’t discouraged. “There are plenty of reasons to be skeptical, and there’s way too much hype,” he said. “But it’s a real opportunity to change the rules of the game.”