#CyberFLASH: What you need to know about blockchain technology

blockchain-earth-400x267Q: Blockchain seems to have come out of nowhere to become a hot topic in technology and finance but few people seem to truly understand it. What is blockchain?

A: We have spent two years researching this technology and have concluded, unequivocally, that blockchain technology is the second generation of the digital revolution. The first generation brought us the Internet of Information. The second generation – powered by blockchain – is bringing us the Internet of Value. So what is it? Blockchain is the ingeniously simple, revolutionary protocol that allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless. It does this by distributing trust from powerful intermediaries to a large global network, which through mass collaboration, clever code and cryptography, enables a tamper-proof public ledger of every transaction that’s ever happened on the network.

And while it’s the technology that drives Bitcoin and other digital currencies, the underlying framework has the potential to go far beyond these and record virtually everything of value to humankind, from birth and death certificates to insurance claims and even votes.

In short, it’s a new medium for value.

Q: So, should people be fearful or hopeful about the potential of blockchain.

A: They should be immensely hopeful. There is perhaps nothing more powerful than an idea whose time has come and blockchain could not have come sooner. Today we are caught in the grip of a troubling prosperity paradox. The economy is growing but fewer people are benefiting. Youth unemployment is stubbornly high, median incomes are slipping and new business formation is hitting multi-decade lows in the developed world. The rise of the Internet has done little to alleviate the bureaucratic bloat and inefficiencies in the Global South either, stranding trillions of dollars of dead money in the dark economy. With blockchain technology, a world of possibilities has opened to reverse all these trends. We now have a true peer-to-peer platform that enables personal economic empowerment: we can own our identitites and our personal data, we can do transactions, creating and exchanging value without powerful intermediaries acting as the arbiters of money and information. Billions of excluded people an soon enter the global economy. We can protect our privacy and monetize our own information. We can ensure creators are compensated for their IP. Rather than trying to solve the problem of growing social inequality through redistribution alone, we can change the way wealth – and opportunity – is predistributed in the first place, as people everywhere, from farmers to musicians, can share more fully in the wealth they create.

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