Connect: How technology is changing communication
The Blockchain Could Make Trust Accessible to Everyone
The blockchain isn’t just about transferring money—it’s also changing how people worldwide access data, keep and access records, and prove ownership.
You’ve probably heard about Bitcoin, the digital currency that many techies and Redditors have been promoting since its mysterious inventor, known by the pseudonym Satoshi Nakamoto, released software Version 0.1 in 2009. But there’s more to Bitcoin and other electronic currencies like Dogecoin or Litecoin than just being another way to pay.
The underlying system that makes Bitcoin tick, known as blockchain technology, could help democratize the way we store data, prove ownership, and create verifiable trust relationships.
The blockchain is a global, public database, or ledger, of transactions. When a transaction, like paying a friend, is initiated, a network of computers uses algorithms to validate that your account has enough money. After validation, the record of your transaction—in the form of a “block” of data—is added to a chain of other people’s previous transactions. Once a transaction is made, it cannot be changed. And while you and your friend remain anonymous, anyone can access the record of your transaction. The blockchain, if it’s applied broadly, could make the fabric that keeps the world running more reliable and accessible.
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In the traditional banking system, we typically require many more middlemen, which is both expensive and less inclusive. “On the blockchain, trust is established, not by powerful intermediaries like banks, governments, and technology companies, but through mass collaboration and clever code,” according to Don and Alex Tapscott, authors of the book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World.
And with an inviolable, preserved record of transactions, there’s a reduced risk of record disputes and financial pilfering. Because of that, the technology could help consumers save up to $16 billion in banking and insurance fees per year. And for the two billion adults worldwide who do not have bank accounts, the blockchain can help them participate in the global economy with a lower barrier of entry. All they need is a phone to send and receive money worldwide via text message at a fraction of the normal cost.
The blockchain could make the socioeconomic barriers that keep so many out of formal systems of recordkeeping and finance redundant. For example, Sweden is attempting to create the first blockchain-based land title registry, which could make disputes about who owns what a relic of the past. That could be a boon for the 70 percent of people worldwide who still don’t have access to this important type of record keeping. And in emergencies, when people still need to make purchases but might have all traditional forms of identification or credit swept away, the blockchain strategy is a perfect solution. The United Nations World Food Programme deployed blockchain to allow refugees in Jordan to pay for their food. “Through blockchain, we aim to cut payment costs, better protect beneficiary data, control financial risks, and respond more rapidly in the wake of emergencies,” WFP’s director of innovation and change management, Robert Opp, said in May.
Clearly, it’s not just about money. The blockchain could revolutionize information itself and make the global economy—and really, global society—easier to access and engage for people who may not have traditional paths of entry like banks or mass retail. It could renovate the financial structure of the entire world, with the potential to make it a little more equitable for everyone.
The Possibility Report is an ongoing series about how technology is changing our understanding of the world around us. This article is part of CONNECT, our discussion about how emerging technologies could change how we communicate and bring unprecedented numbers of people online.