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Seven potential uses for Bitcoin's core innovation: the blockchain

Charlotte Jee | June 27, 2016
The technology that underpins bitcoin could be used to support online voting, cloud computing, land registries and more

Bitcoin has made plenty of headlines since the cryptocurrency first emerged in 2009, but more recently attention has turned to its underlying technology: the blockchain.

Blockchains are a way of storing information (transactions, in Bitcoin's case) in a distributed way: sharing it between many parties, thus doing away with the need for a trusted central server.

The blockchain can only be updated with the consent of the majority of participants and, once entered, information can never be erased, meaning it can provide a definite, verifiable record of 'digital events'.

The decentralised, distributed nature of blockchains brings a number of benefits: stronger security as the ledger is shared by thousands of computers, transparency as all transactions are publicly recorded and decreased risk. No single authority has control, so if there is a glitch and one of the nodes in the network goes down, the system can still function. 

As a result a number of banks, including Deutsche Bank, Barclays and Santander, have started exploring blockchain's potential to make payments faster, cheaper and more transparent.

However its potential use is vast. It could be applied to almost any form of record-keeping, agreement, contract or register. The UK government is to start exploring how it could use the blockchain for public services. Here are just a few of the ways blockchains are being used or could be used in future.

1. Tracking taxpayer money

Tracking taxpayer money

The UK government could use the blockchain to track money,including student loan and international aid money, according to MP Matt Hancock.  

Speaking at Digital Catapult HQ in Kings Cross yesterday, Hancock said: 

"We're exploring the use of a blockchain to manage the distribution of grants. Monitoring and controlling the use of grants is incredibly complex. A blockchain, accessible to all the parties involved, might be a better way of solving that problem.

"Bitcoin proved that distributed ledgers can be used to track currency as it is passed from one entity to another. Where else could we use that? Think about the Student Loans Company tracking money all the way from Treasury to a student's bank account. Or the Department for International Development tracking money all the way to the aid organisation spending the money in country."  

2. Online voting

Online voting
© iStock/ekinyalgin

Online voting adoption has yet to take off, mainly due to fears that it is insufficiently secure. Some argue the blockchain could change that thanks to immutable, transparent nature. In spring 2014 Danish political party the Liberal Alliance became  the first major political party to vote using blockchain technology, for an internal election. Organisations have expressed an interest in Norway, the US and Spain.

 

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