IBM Fellow Calls on Governments to Assess Bitcoin Blockchain’s Potential as Soon as Possible

The Bitcoin blockchain has been a new technology that has been tested in the tech and financial sectors for a few months. Now, people in other industries and government agencies are starting to ask questions about blockchain. I believe that Bitcoin blockchain technology has the potential to change the way businesses operate, as well as governments, businesses and citizens.

Members of the U.S. House of Representatives Energy and Commerce Subcommittee, which is looking for what they call “disruptive” technologies to assess their potential to impact business, government, and the economy, asked me for my thoughts on the bitcoin blockchain.

They call Bitcoin blockchain technology disruptive, and there’s no doubt about it. It’s definitely a revolutionary technology. Systems based on the Bitcoin blockchain could help radically improve entire industries, starting with banking and insurance. But the impact could be much broader. Any time there’s an industry with valuable information moving from one party to another, any time you need to know for sure that digital information is unique (and that no one party can change it without the consent of the others), you’ll see how blockchain technology can help.

Here are four key things people need to know about the Bitcoin blockchain:

1) The Bitcoin blockchain creates trustworthy and efficient interactions.

Although the Bitcoin blockchain is the core technology that makes the Bitcoin cryptocurrency work, it can also be used for completely different things.

The Bitcoin blockchain is a distributed ledger shared across a P2P network that contains an ever-expanding list of data. In addition to the information that is widely publicized on the network, each participant has an exact copy of the ledger data. Therefore, all participants in an interactive activity have an instantly updated ledger that reflects the latest transactions and changes. In this way, the Bitcoin blockchain reduces the need to establish trust using traditional methods.

2) Bitcoin blockchain technology must continue to improve to meet the needs of enterprises.

The core technology needs to be adapted to further address security and privacy issues in order to create an enterprise-ready blockchain. Additionally, computer and Internet systems must be architected so that they can scale to handle larger volumes of transactions, especially as businesses and governments begin using the technology to handle their core organizational transactions — in seconds, not minutes.

3) The Bitcoin blockchain must be open and interoperable.

In order for blockchain to realize its full potential, it must be based on non-proprietary technical standards to ensure compatibility and interoperability of the system. In addition, different versions of blockchain should use open source software that combines liberal licensing terms with strict management, rather than proprietary software that can be used to suppress competitors. Only by ensuring the openness of the Bitcoin blockchain can it be widely accepted and continue to develop.

There are several open source projects for the Bitcoin blockchain, but only the one approved and managed by the Linux Foundation (called the Hyperledger Project) offers industry-friendly terms and multi-company governance. That’s why we are joining the Hyperledger Project and urging other countries to do the same.

4) Government involvement can bring huge profits to the Bitcoin blockchain.

A very competitive domestic view is critical that American companies and government agencies need to understand the potential of Bitcoin blockchain technology before leading the world and promoting its use. Because Bitcoin blockchain technology makes transparency possible, government agencies can better understand what is happening in the financial and trade systems and detect potential problems before things become serious. Bitcoin blockchain can also more efficiently connect governments and businesses, from tax matters to land use.

Take the U.S. Social Security system. The U.S. Social Security system involves the federal government, millions of employers, their payroll providers, and more than 200 million beneficiaries and individual workers who pay into the system. This is a model scenario for the Bitcoin blockchain. Many parties, rules, many steps in the system process, and a high standard of privacy and security to protect individuals from being compromised. The Bitcoin blockchain is a classic example of an emerging technology. It has a wide range of uses and can bring great benefits, but they are so different from what people are used to that many business and government leaders have taken a different wait-and-see approach. We appreciate wise caution, but at the same time, we believe that if organizations and institutions do not quickly evaluate the potential of the Bitcoin blockchain and begin to do real experiments, they will be left behind in what we call a tectonic shift in the world.

The bitcoin blockchain may have begun life in the shadows of the cryptocurrency world, but now it’s emerging into the public eye as a powerful tool ready to serve businesses and society.