The world is growing more decentralized, in large part due to the transformative power of the internet.
- While originally thought to be isolated to use cases such as email and news media, the internet laid the foundation for unprecedented, multi-billion dollar industries and innovations such as ecommerce, social media, the cloud, smartphones, and online gaming
- However, the internet also enabled activities like identity theft, unwarranted surveillance, and the monopolization of personal data
- Blockchains bring security and privacy to the decentralized, digital world potentially addressing many of these undesirable consequences of the internet
Blockchain technology carries a similar revolutionary potential to that of the internet, though be wary of the hype.
- By making certain data immutable and shared across a network, blockchains allow value to be digitized, exchanged, and recorded without the facilitation (and cost) of a trusted third party – something truly unprecedented
- This means that any industries not already disrupted by the internet whose services include data collection, curation, verification, and/or dissemination could now be disrupted, especially those that are currently centralized and monopolized (e.g., banking)
- This also means that services previously susceptible to malpractice once digitized (e.g., voting and music sharing) can now be safely and securely brought into the 21st century
- And finally, this means that the tedious activities associated with data silos and imperfect communication, like filling out a medical history form every time we visit a new doctor, can be things of the past. We can now make (and own) one record that’s stored on an immutable, append-only blockchain, and anyone we select can reference our record anywhere at any time
- Despite this awesome potential, we are still very much in the early 90s of the blockchain adoption and development curves. Much work has yet to be done as the technology matures, and business cases are only beginning to be flushed out. The priority now is to learn and pursue low-risk pilots
This report explores the definition of blockchains, how they work, the current state, and next steps for putting distributed ledger technologies on the radar.