It’s time to stop watching bitcoin and start understanding blockchain.
True, the bitcoin rollercoaster is riveting: The cryptocurrency rocketed from $800 per bitcoin in January 2017 to an all-time high of $19,783 Dec. 17, only to plummet to $13,800 on Dec. 22, losing one-third of its value in 24 hours.
Just yesterday, bitcoin took a temporary 12-percent dive when South Korea’s justice minister announced the country is preparing a bill to ban all cryptocurrency trading.
“Bitcoin” was one of 2017’s top Google searches globally, and “How to buy bitcoin” was No. 3 on the list of how-to searches.
But blockchain, the technology bitcoin is built on, is what matters. It’s set to become the foundation for everything from public records to medical data to insurance.
Blockchain is the next big disruptor — and business leaders in every industry need to figure out what it means for them.
“We’re missing the point,” National Cybersecurity Center interim CEO Vance Brown said of the world’s obsession with bitcoin. “It’s not just about the money. Bitcoin was just the first application built on blockchain, but the implications are far beyond that.
“Blockchain’s a revolution not just economically but in everything — in terms of the way government could work, our medical systems, every system out there. It’s transformative.”
Blockchain is different from every data system that has come before it, not least of all because it removes the need for an intermediary, central authority or “trusted third party” in transactions.
Blockchain is a distributed database that stores records in blocks. Every block is linked to the next, in chronological order, using a unique cryptographic signature. Those chains of transactions form a permanent ledger, openly distributed among multiple parties in a peer-to-peer network. Once information is stored in the blockchain, no one can revise it or tamper with it: Attempted changes are easily detected and rejected.
In blockchain, there’s no need for a central authority because the system makes it almost impossible to interfere with the data. That immutability — the guarantee that information on the blockchain can be trusted — takes the potential of blockchain far beyond cryptocurrencies.
Like Brown, Christopher Gorog says we’ve yet to see the most powerful uses of blockchain.
Gorog, lead faculty in cybersecurity at Colorado Technical University, said the “tech stock feel” of bitcoin has drawn attention to blockchain over the past couple of months, as people grapple with the idea that they’ve missed an opportunity to make money.
“I think that’s been the driver — money is always the driver for everything,” he said. “But the biggest use cases for blockchain aren’t cryptocurrency.”
In government programs alone, Gorog said, using blockchain technology can offer the ability to control functionality, track transaction, verify identity, resist tampering, enable logistics control for a large number of participants, protect privacy and support accountability in auditing.
Blockchain is also the future of cybersecurity, although Gorog acknowledges “that’s the hard part to get your mind around.”
People are used to cybersecurity being associated with a negative motivation — stopping fraud, stopping theft, stopping cybercriminals. Blockchain flips that, he said, and sells positives — like trust, identity and tamper-resistance.
“We’re turning the whole thing on its head,” he said.
How do you sell trust? Gorog says a notary is a good example.
“You pay $5 to prove your signature. How many places do we do that in society — where we need a third party to put a list of two people together and we have to identify that trusted third party?” he said. “This is what blockchain does in every instance.”
Along with cybersecurity, Brown points to investing, public records and medical data as potential use applications for blockchain.
On the investment front, 2017 saw the rise of blockchain-based initial coin offerings, which allow startups to bypass banks and venture capital firms to raise money directly from investors.
Developers are also pushing ahead with a range of blockchain applications in health care. One example: San Francisco-based startup Akiri last week announced a blockchain-based network-as-a-service platform that will transmit data securely between health care organizations.
Europe is already ahead of the United States in deploying blockchain applications to manage public records. To protect property rights, the Republic of Georgia has moved its land registry on to the blockchain, and Estonia’s blockchain-based Healthcare Registry allows citizens to log into their medical records using digital identities.
With the NCC, Brown is looking to educate Colorado Springs business leaders and the public on blockchain and the opportunities it presents.
“What we’re trying to do is educate public policy and we’re trying to educate the public for what they need to know,” he said. “For blockchain, they need to know about that … because that’s the core technology that I believe is going to impact cybersecurity.
“We are going to be the most informed cybersecurity blockchain community per capita in the world, here in Colorado Springs,” he added.
The NCC will hold its first training course on cryptocurrency and blockchain for beginners Jan. 30 at 5 p.m. The cost is $195 (free for NCC members). Register at https://cyber-center.org/events.
Read more about blockchain in the Jan. 12 edition of the Business Journal.