Business

Blockchain – the next big thing 

BY Dr. Chamitha de Alwis 

What is blockchain? 

In very basic terms, blockchain is a distributed ledger technology that records transactions permanently in a very efficient and secure fashion. Bitcoin, the popular cryptocurrency, marks the first ever appearance of the blockchain concept. A person or group of people using the name Satoshi Nakamoto invented bitcoin in 2008. Surprisingly, the identity of Satoshi Nakamoto is yet unknown. Blockchain is a hot topic in research as the research community has identified the capabilities of blockchain and are working on integrating the capabilities of this platform to a myriad of future applications. 

Why do we need blockchain? 

Generally, we depend on trusted centralised third-parties in many things we do. For instance, we have to depend on a bank when we make online transactions. This approach is costly, time-consuming and even not suitable in the future when there will be countless Internet of Things (IoT) devices trying to make payments at a given instance. Blockchain is a decentralised, scalable, efficient and secure platform that is capable of catering to the future demands. Applications of blockchain are not limited to banking, but will extend to telecommunication, cryptocurrency, industries, e-voting, digital identities, smart healthcare, autonomous vehicles, holographic teleportation, etc. 

How does blockchain work? 

As the name implies, blockchain is a set of chronologically laid information blocks that are linked to previous blocks using a hash-based (cryptographic) chain. Whenever a new block needs to be generated, the nodes in the blockchain network known as “miners” will work together to verify the information that needs to be stored in the new block. Once they reach a consensus on the authenticity of the information, a new block will be generated. Each new block contains a cryptographic hash of the previous block and a timestamp in addition to the information saved. Therefore, each new block generated will confirm the authenticity of previous blocks. These blocks are not saved in a centralised server but in multiple nodes in a distributed network. Therefore, it should be clear that blockchain is a fully decentralised and an extremely secure platform. 

What are the features of blockchain? 

There are many important features of blockchain. Decentralised operation, immutability (once created, it cannot be removed or altered), transparency (as all records are available to be traced back and forth), pseudo-anonymity (operating without compromising user identity), non-repudiation (cannot deny the transaction and behavior of the transaction), security (it is nearly impossible to attack a blockchain network as majority of nodes in the network need to be attacked at once, this is nearly impossible), consensus-based decision making by miners, availability, faster processing and scalability are some of the most useful features of blockchain. Another important feature of blockchain is the use of smart contracts. Smart contracts are automated contracts that have been programmed to execute when a set of predefined conditions are satisfied. This will enable a massive number of IoT devices to obtain services, make payments, share resources, etc. with each other in a trustworthy manner without any human interaction. 

Who uses blockchain now? 

Blockchain is a technology that is already embraced by many around the world. Bitcoin (cryptocurrency), Ethereum (cryptocurrency built on top of the open source Ethereum blockchain platform), Bitwala (blockchain banking service), BurstIQ (help patients and doctors securely transfer sensitive medical information), Mediachain (pay musicians their royalties), Propy (real estate marketplace), Evernym (identity management over the web), DHL (keep a digital ledger of shipments and maintain integrity of transactions) and  Voatz (a mobile voting platform) are a few examples. Some of the banks and financial institutes that operate in Sri Lanka such as Sampath Bank and HSBC have also launched blockchain-based services. 

How can blockchain shape our future?

We envisage a future where everything will be connected to the Internet – Internet of Everything (IoE). Let us consider autonomous vehicles. Our vehicles will be communicating with other vehicles, pedestrians, traffic lights, etc. to take us safely to our destination. The vehicle will pass highway toll-gates, pump fuel and make payments, connect us to the most cost effective internet service provider in the area we travel and even make an advance payment and book our favourite hotel where we will be spending the day at the end of our journey, all while we pay no attention to the road and enjoy a cup of coffee reading the newspaper through our mobile device. Smart healthcare will integrate a large number of wearable devices, cyber-physical medical equipment, health records, etc. This will pave the path to form a very efficient healthcare system. Early diagnosis of medical conditions such as cancers will be made possible using artificial intelligence. Telesurgery will enable the best team of surgeons in the world to get together and perform complex surgeries while being in different physical locations. 

Blockchain will be an enabler to realise such a future as it will facilitate the seamless communication between a large number of devices, faster processing between nodes, payments made through cryptocurrency, network security, elevated privacy, etc. The applications of blockchain are limitless and it will be an integral part of the technologies we will take for granted in the future. 

(The writer is a senior lecturer at the Department of Electrical and Electronic Engineering at the University of Sri Jayewardenepura)