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Wharton legal studies and business ethics professor Kevin Werbach talks about the transformative potential of the blockchain, the underlying technology behind cryptocurrencies such as the bitcoin. While the adoption of cyber-currencies is running into headwinds, the blockchain is finding more practical use across industries. Its nature as a distributed ledger in which transactions are transparent among parties creates a “new architecture of trust,” Werbach adds. One doesn’t have to trust another party in a blockchain to do a transaction even if there is no centralized authority, such as a bank or government, in charge.
“This is the internet all over again,” says Werbach, who spoke on the Knowledge@Wharton show, which airs on SiriusXM channel 111. “This is a foundational technology. … It’s going to change the world.”
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How Blockchain Technology Will Disrupt Financial Services Firms
The Knowledge@Wharton SiriusXM show airs Monday through Friday, 10 a.m. – 12 p.m. EST, on Wharton Business Radio on SiriusXM channel 111.
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Anumakonda Jagadeesh
Excellent Post.
Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, identity management, transaction processing, and documenting provenance.
The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.
The Big Four
Each of the Big Four accounting firms is testing blockchain technologies in various formats. Ernst and Young has provided digital wallets to all (Swiss) employees, has installed a bitcoin ATM in their office in Switzerland, and accepts bitcoin as payment for all its consulting services. Marcel Stalder, CEO of Ernst and Young Switzerland stated “We don’t only want to talk about digitalization, but also actively drive this process together with our employees and our clients. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies.” PwC, Deloitte, and KPMG have taken a different path from Ernst & Young and are all testing private blockchains.
Smart contracts
Blockchain-based smart contracts are contracts that can be partially or fully executed or enforced without human interaction. One of the main objectives of a smart contract is automated escrow. The IMF believes blockchains could reduce moral hazards and optimize the use of contracts in general. Due to the lack of widespread use their legal status is unclear.
Some blockchain implementations could enable the coding of contracts that will execute when specified conditions are met. A blockchain smart contract would be enabled by extensible programming instructions that define and execute an agreement. For example,Ethereum Solidity is an open source blockchain project that was built specifically to realize this possibility by implementing a Turing-complete programming language capability to implement such contracts.
An application has been suggested for securing the spectrum sharing for wireless networks .
A January 2017 World Economic Forum report predicted that by 2025 ten percent of global GDP will be stored on blockchains or blockchain-related technology.
Alternative blockchains
Alternative blockchains, also known as altchains, are based on bitcoin technology in concept and/or code. The term encompasses all blockchains but bitcoin’s main chain. Compared to bitcoin, these designs generally add functionality to the blockchain design. Altchains can provide solutions, including other digital currencies, though tokens in these designs are not always considered as such. Altchains target performance, anonymity, storage and applications such as smart contracts. Starting with a strong focus on financial applications, blockchain technology is extending to activities including decentralized applications and collaborative organizations that eliminate a middleman(Wikipedia).
Notable non-cryptocurrency designs include:
• LaZooz – decentralized real-time ride sharing
• Swarm and Koinify – decentralized crowdfunding
• Synereo – synchronous and asynchronous communication
• Gem – Blockchain Platform for healthcare and supply chain
• Steemit combines a blogging site/social networking website and a cryptocurrency
• DECENT Network content distribution platform
• Hyperledger — cross-industry collaborative effort from the Linux Foundation to support blockchain-based distributed ledgers.
• Counterparty — open source financial platform for creating peer-to-peer financial applications on the bitcoin blockchain
• Bitcache
• Bitnation is the world’s first operational Decentralized Borderless Voluntary Nation, a Blockchain Powered Jurisdiction.
• JPMorgan Chase’s Quorum permissionable private blockchain with private store for smart contracts
• Ethereum is a Blockchain, with a Turing complete scripting language that enables the processing of smart-contracts on the Blockchain.
• aeternity s being developed as the only Blockchain that can by its core design sustain throughput of mainstream world use cases thanks to state channels, while providing real-world interfaces within its Blockchain through Decentralised Oracles .
Projects
Non profit organization
1. Level One Project from the Bill & Melinda Gates Foundation aims to use blockchain technology to help the two billion people worldwide who lack bank accounts.
2. Building Blocks project from The U.N.’s World Food Program aims to make WFP’s growing cash-based transfer operations faster, cheaper, and more secure. ‘Building Blocks’ commenced field pilots in Pakistan in January 2017 that will continue throughout Spring.
Decentralized networks
1. Bitnation is the world’s first operational Decentralized Borderless Voluntary Nation, a Blockchain Powered Jurisdiction.
2. The DAO (organization) was a digital decentralized autonomous organization and a form of investor-directed venture capital fund.
3. Backfeed project develops a distributed governance system for blockchain-based applications allowing for the collaborative creation and distribution of value in spontaneously emerging networks of peers.
4. The Alexandria project is a blockchain-based Decentralized Library.
5. Tezos is a blockchain project that governs itself by voting of its token holders. Bitcoin blockchain performs as a cryptocurrency and payment system. Ethereum blockchain added smart contract system on top of the bitcoin blockchain. Tezos blockchain will add an autonomy system – a decentralized code Development function on top of both Bitcoin and Ethereum blockchains.
Dr.A.Jagadeesh Nellore(AP)