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Beyond Bitcoin: Why the block chain is what really matters

James Haight | Nov. 25, 2014
Block chain innovations have opened the doors for a new era of decentralised information.

A prospective employee may be tempted to lie on their resume to get the job they want. For the most part, employers are forced to take resumes at face value or conduct their own due diligence. In fact, a survey from found that 58% of hiring managers have caught a lie on a resume. However, that same prospective employee is less likely to lie on their more public LinkedIn resume. A study from the Cornell Social Media Lab found that people are less likely to lie on resumes posted in public places because of the presence of past employers, coworkers, and friends who can potentially call their bluff. This example can serve as microcosm (albeit one without complex algorithms) for the potential benefits of systems invoking a public ledger.

Decentralized Applications: The Next Big Thing
A number of organizations are pushing forward the idea of applying the innovation of the block chain to more mainstream applications. I had the opportunity to interview Stephan Tual of Ethereum, an organization broadly seen as leading the charge. Ethereum represents what could well be the next iteration of block chain inspired technology.

Ethereum is building a platform that enables developers to create their own decentralized applications. In a sense, Ethereum provides an 'operating system' layer that allows individuals to program any feature that they may want on top of it. The existence of such platforms presents an important launching point for future use cases.

Proponents of Ethereum and decentralized applications envision a broad spectrum of areas that this can be implemented. There is an opportunity to introduce an automated element to nearly any mechanism that operates based on a set of predefined rules. Smart contracts based on Ethereum or similar platforms could be extended to areas such as banking, financial derivatives, gambling, crowd funding, or even employment contracts. Money, or any other digital asset, can be automatically redistributed between the parties involved (say on either side of a sports bet) based on the outcomes of a specified set of rules or conditional logic. For example, if team A wins, then money is redistributed from party X to party Y. In such scenarios, this technology mitigates both the middleman and the opportunity for fraud.

But of course, as with everything that has stemmed from Bitcoin, this new decentralized distribution of data is new, relatively unexplored, and not well understood by the community at-large. The question is not whether decentralized networks become more pervasive in our future, but to what extent they will redefine existing systems. By supporting new forms of trusted data sharing and transactional interactions, the long-term effect of Bitcoin may not be its actual impact as a global currency, but as the precursor to a new fundamental trusted application environment that changes the way that we work and play together.

Source: Computerworld


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