Blockchain is the most promising information technology of the twenty-first century thus far. With it, comes the power to keep and store records in a systematic way. In doing so, blockchain promises to create advancements in banking, data analytics and informatics. The power of a decentralized ledger lies in its ability to function as a permission-less, honest, upgradeable system. Since the dawn of blockchain in 2008, more and more companies and offices are having the discussion on how to incorporate blockchain technology into their workplace. Not every business needs a blockchain, but those that value accounting and a secure store of records can benefit greatly from using this new piece of information technology. Some are even forming completely new business models that will impact our generations to come.
What makes blockchain so special is not its technological capabilities, but rather the people who build these decentralized systems. The community is founded on open-source code, this means anyone can build upon it and upgrade the system with consensus from the network. They can even “fork” existing code bases and build their own private systems like JP Morgan has done with their Quorum project. However, having a private blockchain goes against the fundamentals of which it was built on. To understand the values inherent in the blockchain space we first have to understand the history of this new tech.
To understand blockchain, first we must understand Bitcoin. Bitcoin marked the first appearance of blockchain technology, with its white paper mentioning a “chain of blocks” to secure transaction records. Satoshi Nakamoto (The anonymous author) released the Bitcoin white paper near the end of 2008 as a response to the Great Recession of failed subprime mortgage bonds. This alternative system outlined a way in which every transaction will be recorded with a hash on a block. These blocks would be mined roughly once every ten minutes. To secure the network thousands of miners are needed running the Bitcoin Core software, where they can be rewarded for securing the hash of a block. There is no “central server” that Bitcoin lives on, rather through the participation of thousands of miners, Bitcoin is able to live as a decentralized system with no single point of failure.
Since then, a spark had flourished in the open-source community and vibrant, diversified group of people continued to build. Most notably, Vitalik Buterian, a Russian-Canadian hacker, created a new form of blockchain that would allow “smart contract” functionality. This system, dubbed “Ethereum” was released in 2014 and raised over $300 million by the end of 2017. Here, experienced coders and blockchain engineers were able to use executable smart contracts to build prediction markets. Prediction markets are an economic feature to essentially place bets. A mostly unknown feature of blockchain, these markets can be used during sporting events, presidential elections or even derivate pricing. Not only that, but markets can be weighted against one another and algorithmically trained on historical data. A powerful economic measure that can radically change the way we hold elections and vote on legislation.
Voting ties in to the core of “smart contract” scripting, in fact the first piece of documented code written in Solidity (Ethereum’s native programming language) was a ballot to delegate votes to individual candidates. The election process today is slow and runs on age-old infrastructure. Citizens cast their votes on clunky machines that cost a fortune to operate. According to HAVA (Help America Vote Act), the United States spends $495 million every election to properly host and operate ballot locations. All this can be reduced to code and run on a simple mobile dapp.