December 31, 2018 at 6:00 AM
Will blockchain change how we do business?
Blockchain technologies can be used in a variety of ways: to monitor financial and commodities markets, to verify educational credentials or to track the production and distribution of legalized controlled substances like marijuana.
“People talk about a global economy, but what we really have [now] is global trade,” said Michael W. McGraw, senior vice president for information technology at Mars Bank in Mars, Butler County.
McGraw said blockchain could change all that, creating a single world economy.
While country’s individual currencies – the dollar, euro, British pound sterling or yen continue to dominate trade and commerce, McGraw said blockchain and cryptocurrencies like bitcoin could theoretically create a single economic reality.
Blockchain works like a virtual data ledger and once created cannot be altered. The blocks of data are linked to create a record – or chain of transactions – resulting in a trustworthy trail of information that is distributed and updated simultaneously across multiple computers.
It takes traditional accounting ledgers, which are specific to a single financial transaction or institution like a bank, and “creates a distributed ledger across the internet,” McGraw said.
From a practical standpoint McGraw said, blockchain and cryptocurrency are reaching remote villages and areas currently not served by banking or lending institutions and allowing a new breed of entrepreneurs to emerge.
“There are two billion people worldwide with no access to banking. Remote villages with no banks, but they have cell towers and internet access. They can use blockchain and the internet to sell livestock,” McGraw explained.
Cryptocurrency is a digital asset meant to operate as a rate of exchange. Bitcoin is the most commonly referenced cryptocurrency.
Daniel Guadalupe thinks blockchain could change the world. He is an attorney with Norris McLaughlin Law in Bridgewater, New Jersey, and co-chairman of the firm’s litigation practice group. Norris McLaughlin has offices in Allentown.
Guadalupe said society is poised at a “watershed moment” and believes blockchain will change business is done. “This could be bigger than the Industrial Revolution itself,” Guadalupe said.
The Industrial Revolution of the late 18th and 19th centuries changed how things were made. Manufactured goods created mass-produced everyday items, ushering in the mechanized age and a move away from handmade goods.
Blockchain could replace many of the systems we know and use today to track information, conduct transactions and keep records.
One example is Gradbase, a blockchain platform used by educators and employers. It makes it nearly impossible to lie about your credentials.
Gradbase uses blockchain to verify college credentials or curriculum vitae so prospective employers can weed out applicants who are dishonest about their education or degrees.
“With Gradbase, an employer can confirm the degree [an applicant] puts on a resume,” because the degree would be loaded from the college or university, conferring the degree, Guadalupe said.
For controlled substances blockchain can be used to track medicinal and recreational marijuana, as each state has its own reporting requirements and regulations.
“With marijuana, they need to report it from the time the seed goes into the ground to the sale,” said Robert C. Gabrielski, an attorney at Norris McLaughlin in Bridgewater. He is chairman of the firm’s corporate and international law groups.
While theoretically open public access, blockchain requires certain credentials for users.
McGraw likened blockchain to the Internet. He said if a blockchain record represents the whole of the Internet, then the way in, or “key,” is much like the private login credentials necessary to access an email or bank or online retail account.
While in theory anyone can access it, in reality transactions are accessed between individuals or groups with appropriate private keys.
WHAT IS BLOCKCHAIN?
Blockchain was invented in 2008 by a person called Satoshi Nakamoto, whose true identify is unverified. The name may refer to more than one individual. Blockchain originated as a way to track the virtual currency bitcoin but has evolved over time. It operates as a distributed ledger, in which records on multiple computers are updated simultaneously for every transaction. Once formed, individual blocks of data cannot be changed or altered.