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Blockchain – The Next Technology Revolution

Blockchain – The Next Technology Revolution

With people becoming more and more digital in their habits and in turn becoming more aware of their security implications, the world is always seeking new platforms that are easier to live with, offer cheaper subscription costs, and include a higher level of security for both the supplier and the end user.

So, what is the next “big thing” you ask?

Enter “Blockchain”, the new frontier on the tech radar! A technology promising security, simplified solutions, cheaper running costs and significant control! “Yeeha!” shouts the world. But who is going to use it?

Essentially, we are looking at total global uptake of this new platform, across multiple industries and verticals alike. Blockchain has four major offerings to areas of significant demand within the IT market, Digital identity, Digital Assets, Smart contracts and distributed applications. In this article (the first of four regarding blockchain), I am going to look at Digital identity.

What is digital identity and why do I want Blockchain’s answer to it?

Digital identity is defined rather well by Wikipedia – “A digital identity is information on an entity used by computer systems to represent an external agent. That agent may be a person, organisation, application, or device.”

We asked an industry expert for his thoughts:

“The huge potential of blockchains is not driven by superior technology in it-self, any app that exists in blockchain can be built using other technology, often better. Blockchains super powers are decentralisation, personal ownership and the removal of trusted intermediaries’. Once everyday users understand that they can take back ownership from the internet and financial superpowers then every industry with a middle man will be flipped on its head”

- Aaron McDonald (Co-Founder, Centrality)

Most of us have a surprising digital footprint, part of which is our identity; social media, online subscriptions etc. all require us to confirm who we are with sensitive personal information that in our worst nightmares could fall into the wrong hands. The media is the first place to report the loss of data via larger companies, via “cloud bleed” and the illegal acquisition of credit card information via hackers, which leads us toward new “safer” holdings of our information.

The Internet of Things (IoT – internet enabled devices, such as smart toothbrushes, telling you that you are harshly neglecting your rear left molars), gambling, loyalty incentives, insurance, asset ownership and chain of custody all have a seat at the table in Blockchain’s solution. So naturally, consumers and service providers alike flock toward the latest and greatest offering. Even the name has chain within it, further indicating strength and safety within our minds!

Security Upgrade

Blockchain promises to deliver a level of security, a level that has been used on the “dark web” for nearly 20 years via a “peer to peer” network model or in IT terms, a decentralised database. Wait! What in the world is a decentralised database? And what does it mean to me? Our banks, insurers and subscriptions generally hold all our personal data within their own data warehouses, many of which remain ripe for plunder. i.e., they are in one central location.

Again, I will quote Wikipedia “A distributed database is a database in which storage devices are not all attached to a common processor. It may be stored in multiple computers, located in the same physical location; or may be dispersed over a network of interconnected computers. Unlike parallel systems in which the processors are tightly coupled and constitute a single database system, a distributed database system consists of loosely coupled sites that share no physical components.”

I talked to Craig MacGregor, CEO of Auckland based startup, Encrypt-S, who was happy to put this in easier terms for us. “Blockchain isn't the text book definition of a distributed database. It's a decentralised database and there are some important differences. A big misconception out there is that the Bitcoin network operates like a large supercomputer, with all the computers working together to process transactions. In reality, it's almost the opposite. All the computers are competing to find the solution to the latest block of transactions and when one computer thinks it’s found the correct answer, it distributes that answer to all the other computers who double check the work. And instead of transaction data being split across all the computers its actually mirrored across them all. So, it becomes a highly inefficient system in this respect with large data duplication. However, this duplication provides unparalleled redundancy and makes it virtually impossible to falsify data.”

An example of how secure Blockchain can be is within “cryptographic Signatures", a proof of ownership process within Bitcoin. Bitcoin access consists of two “keys”. One is a public key, similar to a bank account number, the second is a private key which is how you prove ownership. The public key is what you distribute to others for deposits and the private key grants access to what the public key holds. Essentially the two keys have a relationship and the only way to prove you own the public key without the private one is with a Cryptographic signature. Together both keys create what is referred to as asymmetric encryption. If I encrypt data using a public key and someone else is able to tell me what that message was using their own private key they are proving ownership of the that public key.

This is the party piece of blockchain and one of the reasons it will revolutionise the modern IT landscape. Nothing is impossible, but you can see how much harder this makes things for those pesky cyber criminals. With many of us regularly participating in online shopping, gaming or online loyalty programs you can see how far this technology can be applied to the average consumer. If we look at my own habits where Blockchain could be applied to my digital identity uses, I myself regularly shop via eBay, go to war with the world via online gaming, and stare longingly at serene sandy beaches via Air New Zealand’s “Airpoints” loyalty program. 

In Summary

As a technology recruiter I see this presenting a massive opportunity in terms of jobs. Even in the (in my opinion, unlikely) scenario that blockchain doesn’t become adopted in the mainstream, we are all looking for ways to make our data more secure as every aspect of our lives slowly becomes digitised. That means that we need people to implement, manage, develop, and maintain these systems, making cybersecurity arguably one of the hottest sub-sects of the IT industry for the foreseeable future.

Where does this leave us? Wanting blockchain, that’s where. In the coming weeks and months, I’ll be writing a number of blogs on how blockchain is going to change the way we interact with knowledge – so watch this space! The Blockchain revolution is coming.