Blockchain, the distributed ledger technology, has the potential to impact a diverse range of industries from agriculture to accounting to healthcare. Supporting integrity and trust among entities, blockchain can help track the movement of goods and services—and data itself. Recently Paul Tatro, founder of Blockchain U Online, talked about where blockchain is used now and what’s ahead in 2019.
What is the big advantage of blockchain?
By delivering records that convey offer and acceptance, a blockchain is a value exchange protocol that provides a trust layer for the internet and then digitally records the data in a shared distributed ledger in packages called blocks. If you look at the idea of “offer and acceptance,” that is a fundamental element of any transaction so that gives you the idea of the ubiquitous potential of blockchain because it can be involved anywhere that you have an offer-and-acceptance type of scenario.
What is the significance of a “value exchange protocol”?
Through a blockchain, you are able to not only say “we are going to do a deal together” but also settle on the terms, conditions, and the value of that deal as part of the transaction being completed by the blockchain. The concept of a value exchange protocol is very powerful and this is where this idea of eliminating trusted third parties in the middle of a transaction—that is where the possibility comes from.
And the “trust layer for the internet”?
The internet is becoming almost like electricity. If you don’t have it, you can’t function; but we also know that the internet is full of traps so to have something that can put trust into an application that is available in a distributed fashion across the internet is something that is very unique and powerful and it is what gives blockchain its appeal.
What are the key benefits of blockchain for the enterprise?
First off, it provides the highest degree of accountability in any application environment. This is where aspects such as consensus and the value exchange protocol come in. These are part of the accountability of the application and so third parties in the middle are not needed.
Blockchain also guarantees the validity of transactions by recording them in several places. It is a distributed type of application so there isn’t a single point of failure. If there are 100,000 nodes participating in a blockchain, then there are 100,000 copies of the transaction, so to speak. It makes it more difficult for hackers, and the integrity of what happened is guaranteed because it is recorded in so many different places.
How are the other advantages?
Because you are not relying on someone looking over forms and deciding what is valid, you have effectively taken the process for validation and codified it so the process integrity is ensured. The computer software will run the same every time. The other thing is the immutability of it. It is virtually impossible to make changes to a blockchain once a block has been added. That ensures that if data is in a blockchain it has not been changed. When you combine the immutability of blockchain with the resistance to hacker attacks due to its distributed nature, I think it yields the highest degree of integrity that you will find with any application.
Everything has a weakness. What are some of the areas that need to be strengthened in order for blockchain to take a more prominent place in the enterprise?
There are a couple of things that have to get sorted out before people jump in with both feet. One is the idea of regulations. Until governments decide how a truly distributed application is enforced or governed, it is going to be tricky. Let’s say there is a blockchain spanning jurisdictions and geographic boundaries—such as Bitcoin. Which rules apply? Should it be U.S. rules? Maybe there was an issue that took place in Dubai. Who really is involved? There is an old saying, “When more than one person is in charge, one is to blame.” That needs to be clarified because companies don’t want to find themselves vulnerable to laws they didn’t anticipate. This could happen with a public or private blockchain due to the distributed nature.