BLOCKCHAIN: What Does the Future Hold?

This month, CompTIA held a webinar titled, “Blockchain What Does the Future Hold?” hosted by David Logsdon, senior director for Federal Advocacy at CompTIA who handles our New and Emerging Technologies portfolio.

Logsdon discussed how Blockchains have emerged as one of the next big transformation technologies being considered for government to provide citizens with easy, online access to services and transaction.  In fact, the issue of Blockchain is quickly gaining interest amongst several different communities.  A few months ago, Reps. Jared Polis (D-Colo.) and David Schweikert (R-Ariz.) officially launched the Blockchain Caucus.  The first meeting of the Caucus took place on June 19th, areas of focus included:

- Digital Identity Guidelines
- Enrollment and Identity Proofing
- Authentication and Lifecycle Management
- Federation and Assertions

Logsdon also said the Defense Advanced Research Projects Agency (DARPA) is also taking a long look at Blockchain.  DARPA has already made some significant investments in the sector to develop blockchain based security systems. To accelerate research and development in the area, the agency has extended its support to many startups.   According to a DARPA project manager Tim Booher, the use of blockchain technology will potentially eliminate cyber-attacks like code injection.

Guest speakers included two of the industry’s leading blockchain experts: Andre de Castro, founder and CEO of the BlockChain of Things; and Joel Waterfield, Managing Director at Grant Thornton where he is the resident tax expert.

David asked the speakers great questions and received insightful answers.  Some of those are summarized below.

What is Blockchain for the less experienced?

Joel Waterfield: It’s a public digital ledger in which transactions are made in some form of crypto currency and are recorded chronologically on a public ledger.  Think of spreadsheets that are duplicated thousands of times across a network of computers and then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of blockchain.  Information held on a blockchain exists as a shared – and continually reconciled – database.  The blockchain database is not stored in a single location, meaning the records it keeps are truly public and easily verifiable.  No centralized version of this information exists for a hacker to corrupt. 

Blockchain has become immensely popular but what path did it take to get here?

Andre de Castro: To discuss the history, we need to discuss Bitcoin, the technology behind blockchain.  It may seem like a scary word since initially it received a lot of bad press.  One of the things we need to realize is that it was created by hackers and an anonymous person on the internet called Satoshi Nakamoto which everybody assumes was a pseudo name.  This individual/s has since disappeared.  In 2009, Satoshi Nakamoto released a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” revealing his idea for a purely peer-to-peer version of electronic cash to the world. In his vision, he manages to solve the problem of money being copied, providing a vital foundation for Bitcoin to grow legitimately. Essentially solving an unsolvable computer problem-- a technology that would stop the double send problem without an intermediary.  We have many different flavors of blockchains that are surfacing.  Up until today, we have one production blockchain – the global bitcoin blockchain.  Others that exist are being used from a cash perspective but most are considered test platforms. 

Can you provide us some examples of how Blockchain will affect current industries?

Joel Waterfield: I’d like to focus on the music and healthcare industries.  I’ve purchased music in many different formats— essentially, I pay rent for access to music.  While the accessibility has greatly improved, what’s plagued the music industry is that the artist is the last to get paid.  Typically, the artist is misinformed about the amount of sales so they never receive the proper amount of royalties. When we transition it to a blockchain format, a song can be given a digitized address and a smart contract which is a software program attached to the digitized address.  So, when a transaction occurs, payment is forwarded to the parties identified in the smart contract.  There is no middleman in this transaction.  Blockchain/bitcoin was created to give greater transparency to transactions.  In healthcare, if your medical records were on a blockchain in the form of an electronic medical record (EMR), you could give medical professionals, insurance companies, access to those records enabling secure lifetime medical record sharing across providers.

If Blockchain is based upon a decentralized ledger, how will the most centralized of entities (i.e., government) participate?

Joel Waterfield: I’d like to begin with a quote from U.K. Minister for the Cabinet Office Matt Hancock, “Blockchains – distributed ledgers, shared ledgers – are digital tools for building trust in data. Government cannot bury its head in the sand and ignore new technologies as they emerge.” The prime minister went on to say that in 2010, the internet had become the fabric of the U.K. but not the fabric of the government.  “Blockchain is about changing the business model. Not just about doing old things in new ways, but changing how we deliver for our customers: the citizens of this country.”  The UK is ahead in making use of blockchain and distributed ledger technology to reduce costs in operations including reducing fraud and errors in payment and providing greater transparency of transactions between government operations and citizens.  The U.K views Blockchain as a new way of doing things all together and I think the U.S. federal and state governments need to look at it this way too.

To listen to the webinar in its’ entirety, please click here.

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