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Blockchain: what's the big deal?

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If you work in or around engineering of any type, it’s possible that you’ll have heard the term Blockchain bandied about by industry analysts and commentators, as well as talk of the transformative potential that this new technology holds.

But what exactly is Blockchain, and should you believe the ‘transformative’ hype?

Blockchain is defined as a distributed database technology that records and timestamps transaction in blocks, creating a chain that acts as a ledger. The ledger is decentralized across multiple computers, making it virtually impossible to retroactively edit it. Therefore Blockchain is inherently secure.
Blockchain has the potential to create a 'new type of internet'
Image via WikimediaCommons

Another way of thinking about Blockchain is to compare Google Docs and the way that works with Microsoft Word and the way that works- in the context of sharing and collaborating on documents.

William Mougayar, a Blockchain specialist, makes the comparison as follows:

“The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once. That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again). With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document.”

Blockchain technology then, has the potential to make the sharing of records (whilst maintaining the integrity of those records) much easier. By storing blocks of information that are identical across its network, the blockchain cannot be controlled by a single entity, or have a single point of failure (much like how a Google Doc doesn’t just sit in one place but can be accessed collectively by all those who have permission to do so).
Blockchain may have a variety of uses including in neighbourhood microgrids, supply chain auditing and land title registry
Image via WikimediaCommons

Potential uses for Blockchain

From an engineering perspective Blockchain technology could have a plethora of uses, most notably within commodity supply chains, ownership rights and energy trading. We’ve detailed some of the most interesting potential uses below:

Supply chain auditing
The use of Blockchain technology (distributed ledgers) could help to make supply chains more transparent, creating a more effective audit trail so that we can see the true backstories of commodities (via the Blockchain based timestamping of a date and location that corresponds to a product number). An example where a Blockchain-based supply chain could yield benefits is in the prevention of the trade of conflict diamonds. With Blockchain utilized throughout the supply-chain, it would be impossible for conflict diamonds to reach the marketplace.

Neighbourhood microgrids
Blockchain technology could enable the buying and selling of the renewable energy generated by neighbourhood microgrids. Blockchain’s ability to timestamp the date and source of energy units would facilitate the creation of a transparent and fair form of hyper-local energy trading.

Land-title registration
Blockchain technology could be used to create publicly-accessible ledgers, thus making the record keeping of land titles much more efficient and transparent than at present.

Is the Blockchain hype justified?

These are just a few of the proposed uses of Blockchain technology; some of which could have a direct impact upon engineering industries.

Whether or not Blockchain lives up to the hype remains to be seen as it is a relatively immature development and has been limited in its practical application to date. In theory, the hype is justified, but the reality at present leaves a lot to be desired…
Recent Comments "The magic of Bitcoin is not blockchains per se but more importantly distributed consensus, permission-less innovation, security incentives and social reward"
Steve Ratheram, 11 August 2017
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Blockchain: what's the big deal? - Time to read 4 min
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