Microsoft in the News
Blockchain In Practice
Blockchain has been working without a major issue since 2009. In August of 2010 a vulnerability was found and over 1 billion Bitcoins were created in a single transaction. Within hours, the exploit was spotted and reversed. The vulnerability was patched, and the network forked to using the updated protocols.
Other than issues having to do with hacking and mismanagement, the blockchain managing Bitcoin has operated without flaw. In addition to its built in robustness, it was designed to operate like the internet in that,
- It cannot be controlled by a single entity, and
- It has no single point for failure.
Additional desirable features of the blockchain system are:
- It is a public system, so it has built in transparency.
- It is incorruptible. Altering any small unit of data on the blockchain would require an enormous amount of computing power, and would render the new blockchain useless and obsolete, thus having to revert back to an uncorrupted point.
These are the reasons why so many governments and businesses are trying to figure out how they can harness the power of blockchain. Blockchain technology allows you to digitally track ownership of assets in a secure and transparent manner. This allows for shared processes across trust boundaries. Some of the ideas for using blockchain include:
- Smart Contracts
Simple contract can be coded to automatically execute when specific criteria are met. Automated foreign exchange is one example that would eliminate the middle man, and thereby eliminate fees.
- The Sharing Economy
There can be no doubt that the sharing economy has taken root. Air BnB and Uber are well established and profitable business models. However, each of those companies represents a single point for failure. Blockchain threatens to eliminate the middle-man (Air BnB and Uber), and allow people to connect and transact directly.
- Governance
Governance in both the public and private realm can be made transparent and accessible with blockchain. Elections, polls, and corporate governance can all be tracked. The app Boardroom was launched to bring transparency to the management of equity and digital assets. The start-up Follow-My-Vote is working on a new and improved voting system.
- Identity Management
Being able to prove who you are is a central concern of every online payment or transfer. Having an incorruptible identity management system would be a boon to the online financial industry. The current standard is SSL, but companies are racing to create the blockchain version of SSL.
- AML and KYC
In the banking world, Anti-Money Laundering and Know Your Client rules create considerable bottlenecks. These are expensive and time consuming regulations that can be more easily met through a blockchain based identity management system.
- Public Ledgers
Any instance where ownership or transfers need to be kept is fertile ground for blockchain. Several countries are currently looking into replacing their cumbersome land registry with a blockchain ledger. Stock markets are also exploring the possibility of eliminating the need for clearing houses, auditors and custodians by registering share trades through blockchain. Nasdaq Linq has been running on this premise since 2015.
