Why Blockchain Matters More Than You Think!

You are watching ColdFusion TV Hi, welcome to another ColdFusion video Shortly after the 2008 global financial crash, a mysterious white paper emerged from an unknown entity, a person or group calling themselves Satoshi Nakamoto In this mysterious white paper, a new peer-to-peer financial system was discussed It was to use a digital cryptocurrency called Bitcoin It was an omen to people being sick of centralized power meddling with economic systems

Many perceive this new system as a better way of doing things The technology invented to power this new system was called blockchain and Nakamoto's paper was its grand unveiling In this video we'll talk about some exciting implications of this technology and the impact it could have on all of our lives So what is blockchain? It's the underlying technology behind crypto currencies like Bitcoin and Ethereum, but its uses go far beyond that It all sounds complicated, but let me try and break it down to one sentence, an important concept that you need to remember Simply put: blockchain is a continuously updated record of who holds what These records are split into linked blocks, and then secured using cryptography The cryptography part just means that you can be sure about the records This is dubbed as automated trust, or trust that's inherently built into the system The list of records, known as a distributed ledger, is decentralized and available to everyone to see and verify In addition, the blockchain is tamper-evident and unhackable due to its distributed nature Everyone knows when a block has been messed with because it is rejected by the rest of the system If you want to know more details I've already done a video about the basics of how blockchain works in regards to crypto currencies I'll leave that video and other information sources in the description below Blockchain has a social perception strongly related to Bitcoin and other cryptocurrencies And most people view the blockchain as something for intellectual tech-savvy criminals or people that are anti-government But the emerging truth, is that the blockchain has applications far beyond cryptos and as a whole will be nothing short of revolutionary I've invited Dr Adrian McCullagh, a blockchain lawyer who's at the cutting edge of what's going on in the industry to speak to us today I'm a lawyer of 30 years experience I'm the only lawyer with a PhD in IT security my thesis involved Technical analysis of digital signatures and hash algorithms which happens to be the underlying technology for blockchain So a blockchain is just a special type of data repository that is in itself tamper evident Blockchain technology has been called the next stage of the Internet by many But I believe that this is now the next generation of the Internet and that it holds vast promise for every business every society and for all of you individually Let me break it down Our current Internet is an Internet of information

It's based on the concept of copying and distributing information Be it video Email or data All of these are copies For example, if you want to watch a video on YouTube or receive an email, you're looking at a digital copy of the original But what if we take this further to the next stage? What about assets that provide real value? Like contracts such as a house or car ownership, a stock, a bond, money, votes or digital identities The problem is you don't want to have these things as copies For example, you don't want to send someone $5,000 yet still have the original $5,000 under your name This was called the double spending problem by cryptographers Despite the name, this basically means the problem of having two digital copies of something that should only have one unique identity The cryptography element of the blockchain enabled it to be the first technology of its kind to solve the double spending problem

Now for the first time we can build a new stage of the Internet based on real value And this is partly why it's such a big deal So where can the blockchain be applied? In my talk with Dr Adrienne, he discusses the FITS model of blockchain application FITS is an acronym Using this model, the best places to use blockchain are places with high possibility of fraud, an intermediary or middleman environments with high throughput and stable data I'll let Dr Adrian explain further Um you should try to run against your environment, what's called the FITS model, F-I-T-S The FITS model stands for, F stands for fraud

If you are in an environment where there is a history, propensity, likelihood of fraud involved in various transactions Then the blockchain can assist in reducing the likelihood of fraud actually occurring Adrienne goes on to say that this is why blockchain is being used for international finance transactions The next area of the FITS is the I If you have an environment where there are intermediaries involved then you may be able to disintermediate those parties if they really don't provide value He goes on to say that we can get average transaction settlement times from two days down to 15 minutes by taking away middlemen Throughput, or number of transactions per second, is another consideration It turns out that Bitcoin can only do ten transactions per second while MasterCard and Visa can do about eighty thousand But researchers are currently looking into increasing the throughput You then look at things which, what Vincent Grimaldi from the University of New South Wales has developed He's been able to increase the throughput to four hundred thousand transactions a second through what's called decentralized computing, using a hundred Laptops PCs to do the processing power

And next is the stability of data For a blockchain application you don't want volatile data You want things that are going to stay the same for at least a while, things such as land ownership titles and personal information So that's the theory about what systems you should look for in regards to using blockchain applications But where is the blockchain actually being used today? Here's a quick fire round of applications underway Blockchain land registries are being looked at in Honduras and Sweden Diamonds are looking to be tracked by the blockchain to stop things like blood diamonds The Nasdaq Stock Exchange will soon begin a blockchain system to record the trading and privately held companies The Bank of England has stated that the blockchain is a significant innovation that could have far-reaching implications in the financial industry not only this, but six banks including Barclays, Credit Swiss and HSBC are all planning on making a single digital cryptocurrency to clear and settle transactions using the blockchain Microsoft is even getting in on the action by building a framework using the Ethereum blockchain On the social media front, the Steemit, a reddit competitor, and its video companion DTube, a YouTube competitor, both are blockchain based platforms where you can get paid in cryptocurrency for creating content This is showing a new direction and where social media could go As a matter of fact I've actually just signed up for Steemit myself Okay, so this is all good, but let's turn things up a notch Blockchain goes even further when we talk about something called a decentralized autonomous organization, a D-A-O, or DAO for short Because of blockchain technology, we now have the capability to create huge company organizations that are distributed and automated for the first time in history This has never been done before and could provide near limitless potential Before the blockchain we were already halfway there We have organizations like YouTube that are a mix of the old-style central management with a decentralized user base creating content A DAO would have computer code that runs the rules and decisions instead of a central management team at the top The people in the decentralized network would decide on the rules, form a consensus and create something called a smart contract Basically a set of computer coded rules that a computer would execute later when needed

In other words a DAO is like a democratic company that's automatically run So, a DAO is meant to be a Decentralized, so it's on the blockchain, there's no central management involved Autonomous, in that the code will run the transaction And it's meant to be some form of organization The difficulty from a legal perspective is that no one at this point in time has been able to classify exactly what a DAO is It may be that in a few years time DAOs will become so popular that legislators will need to create special legislation that will recognize what a DAO is, but at this point in time no one knows Let's take a look at a basic hypothetical example of how this might work, but just with one smart contract So say in the future, when the blockchain is readily established, you want to buy a used Tesla Model 3 Traditionally, you'd go to a dealer or an individual, you'd make sure that the details in the history of the car are correct You'd hassle for a price with the seller, take some money out from the bank, transfer the money, sign a lot of paperwork wait for the money to clear, and then you can finally have the car This will take around a few days to do Now, with the blockchain, using a smart contract, you could have this order all carried out in real time The car would be uploaded to the blockchain so that you would already know that the details are correct because trust is built into the system You could buy this car with a cryptocurrency that's attached to your bank account, and all of the ownership and other details about the car is executed in a smart contract, so everything would happen in a matter of minutes instead of days Your ownership of the car is now attached to your digital identity on the blockchain The global records in the blockchain system is now updated so that everybody in the system now knows that this car was sold to you You can take all of this a step further by linking up different smart contracts into an organization, similar to Airbnb or Uber, so the whole process is automatic, with rating systems of service and customer satisfaction etc Although that setup is a sharing economy model, according to Dr

Adrian, a group of smart contracts can easily be arranged in this way So I hope that you're beginning to see the importance and potential of such technology But it's not all roses Right now there are still some downsides Malicious smart contracts for example These can theoretically be designed to clog up the entire system In addition, if there are actual coding errors within a decentralized autonomous organization itself, this could create massive problems Another thing is that the blockchain is also permanent: every record of a transaction is stored there for all time And this doesn't sit well for those concerned of privacy and the right to be forgotten Dr Adrian did state that there are going to be some entities called Oracles, and these guys have special clearance to make edits on the blockchain, but overall this is still an issue that needs further looking into As I tell people, you know, when we talk about blockchain, and we talk about DAOs, and ICOs and things of that nature we are at this stage in the blockchain ecosystem probably the equivalent of 1993 When the internet was opened up by President Clinton in the National Science Foundation prior to 1992 the internet was only open to research organizations, government agencies defense contracting organizations Who would have thought in 1992 that we would have companies like Google, Amazon All of those companies have taken advantage and looked at the internet and said how can I use this piece of technology? I have no idea what some really smart masters, PhD student is going to do and And say we could use the blockchain or smart contract or a DAO to do this May come from the University of Queensland Curtin University in WA Stanford You know, who knows what someone is going to think about in the future, and say "wow, we can use this technology to do this" I don't believe it's going to be me, I'd love it to be me But there will be some smart people out there who will look at this technology and say "let's do this", and the rest of the world would say "wow, that's really something I want to get on board and I want to utilize that service" So while everyone's focused on the buzz of artificial intelligence, I really think that the blockchain is a dark horse that's going under the radar, mainly because it's not as romanticized and the concept is a little bit harder to grasp Regardless, blockchain is the next step of the Internet, a complete overhaul of how things in our world are going to be recorded organized and run

In the end I personally think it's going to be a combination of artificial intelligence and the blockchain that will be our future So what do you guys think? are you looking forward to things changing in this way? Or are you hesitant? let me know your thoughts below Also, if you know someone that's going to be interested in this topic, feel free to pass this video along to them Anyway That's it Thanks for watching If you've just stumbled across this channel, feel free to subscribe This has been Dagogo, you've been watching ColdFusion And I'll see you again soon for the next video Cheers guys

Have a good one ColdFusion is new thinking


Free Email Updates
Get the latest content first.
We respect your privacy.

Different Coins

Blockchain Basics


Virtual Currency News