Wanted: A real conversation about blockchain

Blockchain is so much more than cryptocurrency. That’s where it started but a shift in the conversation is needed so people can understand its enormous potential, writes Justin Flitter of Blockworks

There’s a lot of discussion and debate about blockchain technology currently and it’s met with varying levels of “first mover, need to hear more” enthusiasm, balanced by  scepticism.

There are all sorts of questions posed like “what is it exactly?” and “will it really transform the way we live and work?” It’s made a lot of people wonder whether it’s all hype or substance.

In all fairness, the  scepticism comes from blockchain being associated with bitcoin and its well-publicised roller-coaster ride. There are currently over 1,600 cryptocurrencies but bitcoin still receives disproportionate attention - it’s a great example of how media profile has driven perception.

Blockchain is so much more than just bitcoin, or any other cryptocurrency for that matter - that’s where it started but a shift in the conversation is needed so people can understand its enormous potential.

As the founder of a conference about blockchain I am among the people who are avid supporters and I believe its potential is very real - you are probably thinking “he would say that wouldn’t he?” but bear with me awhile.  

The reason for my undying support is blockchain’s ability to influence the way business, government and society is managed by changing the way we handle data, and we are handling more and more of this all the time.

Its attraction is the ability to deliver trust and security, through the establishment of a decentralised ledger.

CIO readers most will probably know what I’m talking about, but for the rest here’s a good explanation.

Blockchain is a chain of digital information held in tamper proof, private and secure parcels, or blocks. This information is stored across a network of separate computers, as opposed to all being stored in one place. This is what’s called a distributed ledger or a set of data replicated across many networked computers.

Ideally, computers in the network are in different locations and spread across many countries. A distributed ledger uses protocols so changes are consistent across each computer.

A good example is an excel spreadsheet with its data and validation rules replicated on many computers. When a cell is changed in one instance of the spreadsheet, the rules mean the change is made across all instances of that spreadsheet.

Blockchain is built using cryptography, which means it can store and transmit data that can only be read and processed by the recipient. The result is effectiveness in managing identity, financial information, social and medical records, transport and supply chain, and so on - a whole lot more than just a coin.

It’s good news the blockchain conversation is growing as New Zealand has a huge opportunity to build new prosperity based on local control of data and information.

This is already happening with many NZ companies developing concepts in a growing sector that’s creating jobs.

For example, The ‘AsureQuality Food Trust Framework’ has been under development by AsureQuality, New Zealand Post and New Zealand Trade and Enterprise for the last 14 months and is being talked about as the first authenticated e-commerce shop front for New Zealand products.

This is addressing one of New Zealand’s challenges in that our products have to pass through numerous intermediaries to reach the final consumer, with each one costing a mark-up or commission. Blockchain has the potential to take away these hurdles by providing a transparent and trusted end-to-end supply chain.

Using blockchain will give the smallest producer an opportunity for a direct channel to customers in international markets and streamline the way business operates. Using it, New Zealand Inc. will be able to trade at the highest level from the smallest to largest producer.

Let’s take the humble pot of manuka honey as an example of how blockchain can provide real benefit.

Counterfeit production of honey, or any other good, is a real problem because it devalues the authentic brand and impacts its reputation. And when our own New Zealand primary produce and buzzy bee is the victim, there’s a need to do something urgent about it.

A real illustration is that more manuka honey is sold in China every year than New Zealand produces, and authentic pure manuka is only produced in New Zealand - go figure.

This means a lot of people are trading off our reputation and this impacts New Zealand’s economy as well as the purchasers who want to buy the bona fide product.

Another potential solution came from a hackfest run as part of the Blockworks conference.

Imagine you are buying a t-shirt online and the website gives you the option to offset some of your product against carbon credits - you’ve probably been in this situation. It then asks you to pay a small amount that's sent to a tree-planting initiative.

Without blockchain you would have no idea where your money went, what tree or bush was planted, or how much actually got invested after managers took their cut.

With blockchain you can track your micro payment from the retailer through to exactly which tree, in the exact plantation your money supported. It provides a more transparent and fairer view.

We really need an urgent Kiwi conversation about blockchain. It has wide applications and implications across every aspect of work, life, society and government.

And don’t let’s forget that there’s no getting away from us being a country with a small population in a remote location. We like the way we are - small and perfectly formed - but no longer is this a disadvantage because of a tyranny of distance.

Blockchain has the potential to give our economy a boost as it will give our already expert trading skills an assured channel and shop-front directly into lucrative markets.

I’m looking forward to being part of this ongoing debate.

Justin Flitter is the founder of Blockworks. He is a proponent for the importance of building communities of understanding about transformative technology and innovation. He is also the creator of NewZealand.ai, a growing movement for those involved in how artificial intelligence is changing the way we live and work.