We need to understand the significant impact of the blockchain on society

Tim Berners-Lee, the inventor of WEB, wanted it to be “universal, free, free and transparent.” Twenty-eight years later, Tim Berners-Lee himself admits that the technology has not “reached its full potential,” limited to three factors: misinformation, targeted advertising (commercial and political), and the opaque dominance of algorithms that misuse personal data.

The total estimate of Google and Facebook is $ 3800 billion, which is equivalent to the combined GDP of France and Italy. Such hyperconcentration of financial resources and personal data is a threat to competitiveness and our freedoms.

For the Internet to be freer, more transparent, a provider of trust and security, it must be less centralized. Everyone should be able to control their “digital destiny”. This is one of the greatest prospects for blockchain technology. But not only.

Initially, the desire for decentralization and financial security

In 2021, according to the World Bank, low- and middle-income countries received $ 589 billion. For this flow alone, the amount of intermediation collected by banks is more than $ 37 billion. Unbearable observation for many and, in particular, for Satoshi Nakamo, the inventor of blockchain technology.

It was during the 2008 financial crisis that he envisioned the creation of the digital currency bitcoin, which could guarantee peer-to-peer financial transactions based on a decentralized infrastructure, and therefore without an intermediary.

To do this, it must invent exchange technology that at the same time guarantees the cessation of mediation, trust, transparency, inclusion and security. Blockchain technology was born. This is both an important technical feat, but also a powerful technological idea that shakes our perception of a trusted third party and our attitude to management.

By taking the time to understand the inner workings of this technology, we can understand how it corrects certain excesses of the Internet, destabilizes many established orders, and offers us the potential for lasting transformation for many sectors.

Data exchange and recording technology

Blockchain is, first of all, a technology of data exchange and recording. You should think of it as a Book, the pages of which are “blocks” and each line is a “transaction.” Blockchain is an original book that brings together co-editors, co-authors, co-authors and readers.

Co-publishers are called “Nodes”: they guarantee the integrity of the Book and each of them has an up-to-date version. The co-authors are called “Minors”: they write new pages of the Book, checking the validity of each line. Participants, in turn, offer new lines, ie transactions that they submit to the blockchain network.

In January 2022, the public blockchain bitcoin was simultaneously available on more than 14,000 nodes. It had about 19 million blocks and brought together millions of “miners” who combined their computing resources to contribute to the writing of this book.

The power of this technology is based on four basic principles:

Data blocks form a fixed chain, the completeness of which is stored simultaneously and in real time on thousands of decentralized nodes. This distributed infrastructure makes the blockchain and its contents immutable and highly fault-tolerant. All nodes would have to be lowered at the same time to make it inaccessible.

The identity of all users is confidential, but the history of all transactions made after the first block is transparent and public. Each registered user has a private key and a public key (connected by cryptographic principle). All user transactions are joined to the public key. The right to execute transactions is added to the private key.

  • Cryptographic security

Blockchain includes a reliable cryptographic system. Each added block is encrypted, as well as all transactions it contains. Moreover, like the pages of a book, each block is related to the previous block. Thus, a hacker who wants to change the content of the transaction must not only break this block, but also all the blocks that precede it, and all subsequent ones. According to this principle of the cryptographic network, the entered information is protected from unauthorized access.

  • Decentralization of trust

Blockchain does not have a central supervisory authority or a trusted third party. Management is distributed and operates through the number of actors involved and is united through a system of consensus accepted by all.

From digitizing money to digitizing trust

After bitcoin in 2008 there were many public blockchains, such as Ethereum, Litecoin, Tezos, Binance, Cardano … There are also semi-private or private blockchains, exclusive to a particular organization, as well as consortium blockchains that unite several organizations. interested in cooperation and facilitation of exchange between them.

Uses are growing in many areas: finance, games, energy, sports, health, transport, metaworld, art … And transactions between the parties are paid not by legal tender, and cryptocurrency.

Today, more than 9,500 cryptocurrencies are sent. Their market capitalization exceeds 1700 billion dollars with a daily trading volume of about 80 billion dollars. This paradigm accelerates the entry of players into traditional finance, as well as states de facto involved in the race for regulation.

Just as Internet technology has democratized and digitized information, this new technological era is digitizing economic value, but it is not about currency. Blockchain technology, in fact, is able to digitize any form of asset (so-called token): currency, resource or access to a service, copyright, share of capital or real estate, voting, identity, diploma. .. Their exchanges naturally become transparent and efficient, drastically reducing the friction, slowdowns and costs associated with established intermediaries.

NFT, introduced to the art market in 2020, is the most famous principle of tokenization. It provides ownership of the work, invents new models of value distribution between creator and buyer. In 2021, the traditional art market was $ 17 billion. The crypto-art market, meanwhile, was worth more than $ 40 billion.

Healthcare, public sector, real estate, education … numerous applications of blockchain

In the field of healthcare, the blockchain is ambitiously challenging how to store and share health data. This facilitates the interaction of information systems of health care entities (which are fragmented and multiple). It is a strategic decision for the future to track drugs and combat counterfeiting.

The potential in the public sector is huge. Since 2011, Estonia has introduced a blockchain in its information systems to ensure unified authentication of citizens, security of their personal data and smooth administrative services. Estonia is even preparing to launch its own Estcoin token, which will allow anyone to invest in the country. Say goodbye to bonds and treasury bills.

In many countries (including Finland, the United States, Honduras, and Australia) there are initiatives to facilitate and ensure access to administrative services, digitization and authentication of government documents or diplomas, health care, social benefits, voting, and citizen contributions. In terms of cost optimization, resource efficiency and smooth use, this technological contribution is undoubtedly a shock that administrations need to create a modern civil service, ie efficient, active, smooth and secure.

Blockchain technology is young, but its technical evolution is very fast. It calls into question our relationship and calls into question trust and invites us to rethink it. Blockchain tends to redefine the “third party you trust” and creates new rules of governance within and between organizations, where transparency, inclusion and security will be not only goals but also immutable rules.