The blockchain is all about proving things: that a payment was made; a credential earned, ownership of an item registered; authorization to spend money, or perform some other action. There is almost no limit to the number of things we might need to prove in a day, year, or lifetime—and that’s why a single trusted, timestamped ledger of records and events would benefit everyone.
In Session 2 of the latest The Bitcoin Masterclasses series, Dr. Craig Wright details some of the reasons why we need such a ledger and why it must be scalable and low-cost.
Trivia: Although the phrase “chain of blocks” exists in the 2008 Bitcoin white paper, Dr. Wright says it was Hal Finney who first used the word “blockchain” in May 2010.
Back to proving things, there are registries for cars, real estate, and businesses. But imagine if there was a decentralized registry of every item you own. It’d be much easier to recover lost or stolen items, and in the latter case, it’d have a devaluing effect on the resale market for stolen property. If you sell or give the item to someone else, updating its ownership record could be as easy as making a Bitcoin transaction.
There are two main reasons we don’t have such systems already: First, there is currently no single ledger that everyone trusts (actually, there is one everyone should trust, the word just hasn’t reached everyone on Earth yet); and secondly, it needs to be cheap and scalable enough to make it worthwhile to use. The system’s benefits must be enough to outweigh any costs from people who try to abuse it —though with blockchain’s immutable records, abusing the system becomes a lot harder to do.
This ledger could conceivably record anything and everything, but a large portion of Session 2 is dedicated to brainstorming possible use cases. Dr. Wright mentions intellectual property, even for small and (objectively) insignificant creative works like fingernail designs. nChain’s Dr. Owen Vaughan suggests an animal registry—theft of expensive breeds is actually a common problem, as are people’s pets’ public indiscretions. Dr. Wright is bemused at the suggestion of a pet DNA registry to identify offenders from abandoned poop.
Blockchain and the concept of “sovereign nodes” are all about taking functionality available for high-end, high-level records (businesses, cars, and real estate) and making it available to everyone in the world. A large fashion brand like Dolce & Gabbana can record, protect and enforce its copyrights, but a small independent designer doesn’t have the time or financial resources to do the same. Likewise, certain designs may be the intellectual property of particular regions (like a tattoo), but the people there aren’t able to track and identify everyone who may copy their design. With blockchain, this all becomes possible.
The blockchain is immutable. Ownership/rental of property or authorization to perform an action may be temporary. Therefore the ownership records can change easily, but not the chain of events and timestamps of when they were changed and by whom. Therefore (with the correct permissions), you could view and prove the entire chain of ownership of anything, from creation to end-of-life.
Some are still perturbed at the privacy-and-control implications of such granular records of every event, and it’s always important to address these concerns. As much as a scalable blockchain is able to track and record the minutiae of life on a ledger anyone can access from anywhere, it’s also able to protect the information, keeping it private to only those who need to know it.
The potential use cases are near-endless, and The Bitcoin Masterclasses series is always great for gaining some inspiration if you’re thinking of building something useful.
The second session of Day 1 starts here. If you want to see the rest of Season 7 or any other previous season of The Bitcoin Masterclasses, they’re all available for viewing on the CoinGeek YouTube channel.
Watch The Bitcoin Masterclasses: Privacy in Bitcoin and blockchain—what does it mean?
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
