There are two origins for the word blockchain. The first is the blockchain as it is used in cryptocurrencies and in this context, the word was invented by Satoshi Nakamoto, the creator of Bitcoin, the original cryptocurrency.
The second type of blockchain emerged in either 2014 or 2015 and is associated with commercial or enterprise companies, organisations and consortia. In this form, a blockchain is not dissimilar to the databases that exist today, but are claimed to offer improved efficiency, security, and transparency.
This type of blockchain suffered from criticisms of being overhyped in its earliest years, says UCD lecturer Paul Ennis.
“More recently the technology has matured, largely due to the efforts of large consortia such as Hyperledger and R3. In 2019’s more sober climate, blockchain has clear appeal in certain niche markets and areas that genuinely could use the disruption, especially those involving networks of organisations that could use more transparency or better cryptographic security,” Ennis says.
It is an exciting time as we are at the dawn of use and inevitable eventual mass-proliferation of this revolutionary technology
Potential
In explaining blockchain's potential in practice, director of Business Development at its Dublin-based EMEA Blockchain Lab, Cillian Leonowicz gives the example of buying a house and explains how blockchain could, in theory, have the potential to simplify that process.
“Within buying a house you have the land registry, the buyer, seller, two solicitors, a bank and revenue involved and everything is paper-reliant and around the movement of different pieces of information. This type of thing is made for blockchain technology, to get information over the line and make the process simpler,” he says.
However, blockchain in production is still extremely limited across the globe, and holding it back is the inability to get it out of proof of concept, Leonowicz says. “Governance of blockchain is where the issue lies, how’s this going to work. Also, proving the value is difficult,” he says.
However there are many comparisons being made between the blockchain technology of today and the internet in the mid 1990s and those involved say it will eventually have mass appeal and will be used on a daily basis by the majority of us.
While the blockchain ecosystem is relatively new in Ireland, we are seeing a rapid development of the market here. In fact, Ireland is becoming something of a hub for blockchain with companies such as Consensys, Aid:Tech and Eos Dublin operating here.
"It is an exciting time as we are at the dawn of use and inevitable eventual mass-proliferation of this revolutionary technology," says Lory Kehoe, managing director of ConsenSys Ireland.
“In the internet-empowered world of today, you can interact across international borders, by having a group conversation with people located around the world for instance. However, sending money, sharing or exchanging value, still largely happens via the traditional financial system frameworks, often taking days to settle transfers and payments and resulting in high overhead costs. With blockchain, or ‘web3’ technology, processes such as these will be entirely disrupted and streamlined,” he says.
On a blockchain platform, a unit of value can be assigned to anything deemed valuable by society, be it digital assets or digital representations of real-world assets.
Capabilities
“The multitude of capabilities of blockchain solutions in the connection of people, companies or things in a direct way or on a peer-to-peer basis is definitively validated, and is rapidly edging towards the mainstream,” he adds.
The user interfaces for blockchain applications are becoming increasingly accessible and many applications are nearing the point at which their touchpoints for individuals and companies are as easy and effortless as with commonplace web2 applications.
"The underlying blockchain technology behind many of these applications will eventually become so ubiquitous that it won't make its applications distinguishable. How often do you hear people lauding or distinguishing Facebook for operating on the web?" Kehoe says.
Leonowicz agrees, saying that in many ways, the blockchain tag is impeding its advancement.
“People don’t care about the technology behind Whatsapp or the ability to read a newspaper online, they just want easier and faster processes. The blockchain world is in that trough of disillusionment, and the only thing that’s going to pull it out of it is real live production deployment,” he says.
Education Cycle
Meanwhile, more needs to be done to ensure that coding and developer education is introduced to the education cycle early, Kehoe says.
“Grassroot organisations like CoderDojo have greatly enabled this around the country. Ireland is at an exciting turning point, but simply put, business and government need to work together to equip Irish citizens with the skills they need to work in the economy of the future. Blockchain Ireland has a dedicated education working group dedicated to pro-actively work on this area.”
All of the security lessons learned over decades of technology innovation still apply
In terms of safety, like any other technology that involves humans interacting on a broad landscape of devices, blockchain is not without its risks, says Owen Lewis, partner, management consulting, KPMG in Ireland.
“It is not a panacea to eliminate fraud or unauthorised transactions. All of the security lessons learned over decades of technology innovation still apply, and businesses looking to use blockchain should conduct a blockchain risk assessment to ensure they are well positioned to leverage the benefits, but not open themselves up to any unexpected risks.”
But insiders refer to it as “the trust machine”, due to the fact the blockchain infrastructure guarantees that records cannot be manipulated, Kehoe says.
“Governance is a cornerstone of the solutions that we at ConsenSys build on the ultra-secure, tamper-proof, Ethereum blockchain. Ethereum is a decentralised platform for applications that run exactly as programmed without scope for fraud, censorship or third-party interference. Protocols can be defined via smart contracts, and only execute once conditions are definitively met. An ordered series of time-stamped records forming a chain within the database is intrinsic to the architecture, and this immutability guarantees trust.”