While mainstream media is just now catching on about Bitcoin, some entrepreneurs have been looking into the various possible uses for the blockchain technology for a while. These visionaries are looking for ways to incorporate the blockchain into already-existing corporate structures. That way, blockchain technologies can augment current procedures and businesses in general.
What is the Blockchain?
To understand the blockchain, we must examine the Bitcoin blockchain. Bitcoin’s blockchain records and stores every Bitcoin transaction. As such, the blockchain is an open ledger — or an old school, ever-growing filing cabinet. Everything is transparent so “cooking the books” is highly unlikely. The blockchain is divided in segments called blocks. These blocks can be viewed as the “drawers” of the filing cabinet. All these “blocks” are linked to each other to form a chain, hence the name “blockchain”.
Other blockchain applications operate on the same basic principle as Bitcoin. For example, shipped goods can be tracked to their destinations, anti-counterfeit, applications for tracking luggage, etc.
Blockchain and Ownership
So what can the blockchain be used for? To claim ownership of goods is one thing. This can be done by scanning in a bar code or just manually entering a serial number into a blockchain-powered system.
The blockchain can add an extra layer of security on smartphones. Each smartphone gets its own block, or “drawer,” to which data will be sent. For example, if a smartphone is registered on a blockchain system, a special application is downloaded on the phone that sends its location to the blockchain on certain intervals. This feature can be deactivated by the owner of the phone by punching in his or her special security key. Since phones are highly susceptible to theft, owners with blockchain-enabled phones can track them and report their exact locations to the police.
Another great example where blockchain like technologies can augment existing services are with luggage. When travelling by airplane, your luggage is scanned and provided with a label. In a sense this system is the same as a database or open ledger system. Now if this process was augmented with the blockchain, it would be faster and easier to check the location of luggage. There are companies outside the air travel bureaus that offering such tracking services at insanely high amounts. Prices as high as 479$ or more for a tracking box and application have been seen in some ads. In Europe, there is a Dutch company that actually charges 50 euros for its tracker and 50 euros per month for the use of its application. A lot of professors that are specialized in transportation saying that these prices will make tracking services nonviable for many flyers.
Furthermore, theft can be prevented by registering precious and high-valued goods on blockchains. If thieves steal your precious items, you can refer the police to your ownership entry on the blockchain. This will make selling of stolen items more difficult and risky for thieves.
Bad Moon Rising for Privacy?
In our increasingly digitized world, privacy is of the utmost importance. If we put our smartphones and other property onto blockchain applications, we add an extra layer of anti-theft protection — but are the implications for privacy?
If hackers breach the security of a company keeping track of its data and inventory through a blockchain, the hackers will be ably to track down every item on that blockchain and access every piece of data. If the company in question doesn’t report the break-in to its customers, the customers might be targeted by thieves. In our example with smartphones, hackers would easily be able to steal the phone and deactivate its tracking application. If the customers have their valuables registered on the blockchain, they can be targeted by criminals that buy the information form the hackers. These thieves know exactly what you own and how much it is worth.
The second way the privacy can be compromised is if governments can create a law that allows them access to said data stored on the blockchains. This might result in honest efforts, such as developing better tax policy; or, it the governments may partake in more nefarious activities, such as tracking the movement and financial activity of their citizens.
Who will create blockchain databases where people can register ownership? Private companies are one group that is actively looking those types of blockchain implementations. However, how does do customers know if a company is hacked or if the company isn’t illegally sharing the data with others?
One solution to these potential difficulties could be the multi-signature option, where the owner has the majority of the keys. That way the owner can veto any suspicious transaction requests regarding his or her data. Since the blockchain database is open and transparent the owner could see if his or her data has been shared or revealed to others.
So, while integrating the blockchain into various aspects of modern life is exciting, we do have to be weary. The blockchain can certainly streamline ownership rights and item tracking, but there will be criminal and privacy implications that must be considered.
This author’s views do not necessarily reflect those of Bitcoin.com.