From wine to lottery: Blockchain technology is about to take off

Imagine a world where you can vote in an election using your cell phone, buy a house in a matter of hours, and never use cash.

These scenarios are all proposed by an increasingly excited blockchain community.

Blockchain technology could be used to verify wine deliveries, according to one startup

The technology that underpins the digital currency Bitcoin is not new as it has been around for decades. It is simply an encrypted database distributed across a network of computers.

But what makes it unique is that it can only be updated when everyone on the network reaches a consensus, and once the information is written it cannot be overwritten, which makes it very secure and trustworthy.

And as we know, trust underpins most business transactions.

Blockchain is the underlying technology that supports the digital currency Bitcoin

Terry Roche, head of financial technology research at financial consulting firm Tabb Group, said:

“This may be the first time that blockchain poses a legitimate threat to the status quo.”

The technology has spawned a new generation of startups looking to find new and relevant applications, from peer-to-peer lending to smart contracts.

No restrictions

For example, on the OpenBazaar platform, people can sell anything to anyone, anywhere using Bitcoin.

Unlike eBay and Amazon, users do not visit a website but download a program that connects them directly to other potential buyers and sellers.

Developer Brian Hoffman told the BBC:

“Our goal is to unbundle the existing pricing market around the world by offering a more private, secure and flexible option that is not controlled by any one company but by the users themselves.”

Allowing people to buy and sell directly from each other

According to OpenBazaar, cutting out the middleman means no fees, no restrictions, no account creation, and your personal information is only visible when you're willing to share it.

The software, which is now in beta, has been downloaded nearly 20,000 times in the past three weeks. Other decentralized market concepts include the digital currency Syscoin.

Smart Contracts

Another major development that is exciting the industry is smart contracts, which are programs that can automatically verify that the terms of a contract have been fulfilled. Once the contract verification is completed, it will authorize the payment in real time without the need for any middleman.

The results are then permanently recorded in a blockchain database. Some people firmly believe, perhaps in a dream, that smart contract systems will one day eliminate the need for lawyers.

Some believe smart contracts will speed up property purchases

Companies such as SmartContract and Hedgy are already building businesses based on this concept, which may have applications in the financial, real estate and commercial markets.

Emmanuel Viale, managing director of Accenture Technology Labs, said:

“By combining smart contracts with the Internet of Things (IoT), blockchain technology can be used in areas far beyond finance.”

He said:

“You might already have a wearable fitness tracker that sends calories or steps to the blockchain. That data is encrypted and the identity is anonymized. The same could be done for home medical devices.”

“Blockchain can also create a connection between health experts – be it a coach, doctor or medical institution – and the contract system can trigger the required services, whether it is a fitness program, or treatment for a chronic disease.

Smart contracts can automatically cancel orders if shipping conditions are subpar

In another example, startup Hellosent believes that smart contracts and IoT devices can be used to monitor the delivery of wine.

Sensors will continuously measure the temperature and humidity of the wine during transportation, and if either falls below the agreed level recorded in the smart contract, the purchase order will be automatically canceled.

Digital Renaissance

Some companies are even developing their own versions of blockchain. Ethereum, for example, is a decentralized blockchain-based platform that developers can use to create their own applications, digital currencies and virtual organizations.

Some developers are using blockchain platforms to run digital lotteries

Ethereum co-founder Mihai Alisie said giants such as IBM, Microsoft and Samsung have begun researching its possible uses.

He said:

“These new applications give users full control over their data, privacy, and funds, making it possible to build an ecosystem of trusted web applications because the code that powers these applications is running transparently on the Ethereum blockchain.”

Some developers on Ethereum are creating all kinds of new projects, ranging from lotteries to financial options exchanges, from P2P domestic energy trading platforms to games.

Alisie said:

“From financial systems to government systems and everything in between, this is a whole new world waiting for our imagination and creation. I call it the digital renaissance.”

Predict the future?

Among the software based on the Ethereum platform, Augur is an interesting one.

It sounds like the Borg from Star Trek, which uses the "wisdom of the crowds," or collective intelligence, to predict the outcomes of future events.

Tony Sakich, Marketing Director at Augur, said:

“Our purpose is to create a global prediction market platform that allows everyone’s expertise to be leveraged by the market, creating what we believe will be the most accurate prediction tools in history.”

Augur is still under development and has now been released in Beta.

Of course, many of these blockchain startups may never get off the ground, and some of the predictions about the technology sound far-fetched. At the Davos conference earlier this year, a senior executive at a European bank said that blockchain could be the death knell for cash.

With venture capital pouring in, with investment in blockchain companies growing from $3m in 2011 to $474m (£335m) in 2015, there is a risk of a bubble.

There is also the issue of reduced network capacity, and blockchain database management takes up a lot of computing resources.

Peter Smith, boss of Blockchain, warned:

The technology could "cause the capsule to run out of fuel before it reaches orbit, as complaints about slowing transactions are at an all-time high."

That said, there is a lot of innovation going on, as Peter Loop, head of innovation and disruptive technologies at Infosys Finacle, summed up:

“It remains unclear where blockchain is headed as a commercially viable technology.”

He added:

“But we will see this direction soon. It won’t take more than 10 years, just a few years.

Original article: http://www.bbc.com/news/business-35890616
By Mark Smith
Translator: Ashley Chacha
Alipay address: [email protected]
Editor: Kyle
Source (translation): Babbitt Information (http://www.8btc.com/blockchain-tech-take-off)