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Blockchain, the technology behind virtual currency Bitcoin, is a large focus at Techweek 2017. Virtual currency Bitcoin has been "more of a curse" than a blessing for blockchain. So says 3months.com director Mark Pascall, organizer of theBlockchain.nz – a three-day conference featuring 30 international speakers that kick off in Auckland today as part of Techweek. It is thanks to blockchain technology that Bitcoins are impossible to counterfeit and hard to steal, despite only existing on computers.
Blockchain technology is the reason bitcoin is impossible to counterfeit and hard to steal.
But Bitcoin has been a controversial poster boy for the technology because the most obvious reason for using Bitcoin is to hide financial transactions from authorities. Regrettably, the most common reason most Kiwi "mums and dads" might want Bitcoin is to pay off a fraudster after a ransomware attack. But Pascall says the applications of blockchain technology extend far beyond the financial world. Examples of data that we frequently mistrust are more common than one might think, and this is where the blockchain comes into its own. It could help employers ensure foreign qualifications are legitimate, track diamonds to provide assurance they come from ethical sources, and stamp out the falsification of car odometers.
Blockchain is notoriously difficult to explain, Pascall notes.
But it involves distributing records of transactions – such as Bitcoin payments – across many interlinked computers, each of which keeps a complete history of past transactions. The result is a distributed ledger that is less prone to errors and falsification than a traditional, centralized database. If car yards entered vehicle odometer readings into a blockchain each time a vehicle was serviced or sold, for example, they would be nigh on impossible to doctor.
Blockchain could also allow a ride-sharing service "without Uber", or a trading platform that didn't require an intermediary such as Trade Me, Pascall says. A clue to the breadth of the applications is that the speakers at Blockchain.nz include a former chief executive of Estonia's Nasdaq Tallin stock exchange, Kaidi Ruusalepp, and Professor John Halamka, innovation professor at Harvard Medical School. Australian online travel agent Webjet is expected to explain at the conference how it has been working with blockchain technology to try to eliminate the mix-ups that can occur with hotel bookings.
It is not just data that can be stored in the form of "blocks". Instructions can also be embedded into the blockchain, Pascall explains. "We can now cement in 'sets of rules' that might call for a will to be executed, or a bet or a mortgage, and no bank or government can stop that transaction happening. That will have huge implications for the way world commerce works." Blockchain enthusiasts have been lobbying the Government to amend the Electronic Transaction Act, to make it explicit that contracts executed through blockchain are valid, he says. Bell Gully says the Arizona state government "broke legal ground" by making that explicit in its equivalent legislation. It would remove uncertainty if the New Zealand government followed suit, the law firm said.
Pascall says blockchain has been through "a few hype cycles".
3months' sister company Blockchainlabs.nz has sometimes had to advise clients that a conventional database is sufficient for their needs. "But there are really clear benefits when you might have an issue over who is trusted to run a database. "The other thing is, the more centralized databases we have, the bigger the prize for hackers." Pascall says New Zealand is lagging somewhat applying blockchain, but he hopes the conference will change that. Three hundred people will attend, including many from the government. Given the number of international speakers, the conference has been a big financial risk, he says.
Chuck Reynolds
Contributor
