Blockchain | Smart Futures

Mai Santamaria works in the Shareholding and Financial Advisory Division of the Department of Finance, looking at emerging technologies like Blockchain. She explains to us what Blockchain is.

Imagine it is 1992 and you have just heard about email for the first time. Up until now, the only way you could communicate in writing was to pen a letter or send a fax. Could you have ever imagined, 25 years later, the significance of email? It is pretty much intrinsic to every part of our daily lives.

Now imagine Blockchain. People are probably going to view this type of technology in a similar way to email, 20 years from now, maybe even sooner than that.


Where did the concept for Blockchain come from?

The technology was first described in a white paper in 2008, by an anonymous author (or authors) called Satoshi Nakamoto. Blockchain is not this new technology invention people think. In fact, what Satoshi did was to combine three available technologies in a new way: 1) peer to peer transfers; 2) public key infrastructure (pki) and 3) cryptography.

When the Bitcoin white paper was published on 31 October 2008, the concept of peer to peer payments without the need for intermediaries really made an impact. It was in the midst of the financial crisis. There was damage done to the trust in banks. Being able to pay another person digitally and without paying fees to a bank was thought provoking.


What is it exactly?

“Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”

Blockchain or Distributed Ledger Technology (DLT) is an online digital database that uses blocks to record transactions. There isn’t a central, privately owned server which means it’s not connected to a central source but many computers, or nodes, are connected. Each one maintains a copy of a transaction and as transactions occur they are added to the block. Transactions are time stamped and copied to all participating computers, and secured with a cryptographic signature, which makes the transactions secure, immutable and avoids the problem of ‘double spending’.

For example, every time I pay you $100 there is a time stamp for that transaction and that stamp is immutable through time, there is no way anyone could alter or fraudulently change it. To make that even stronger, a cryptographic signature or key is applied to the transaction, so only those people with the correct key combination  to the transaction can view it. 


Why is it important?

It’s hard to imagine a world without email or wifi for your phone. Email is a very good comparison. It didn’t stop us from communicating, or stop us from transferring knowledge, it has continued to allow us to communicate with each other but in ways that were not possible 20 years ago.

Blockchain Technology is not going to stop us using paper money, not in the short term. We still have to find ways of transferring value and exchanging value for services. It will allow us new ways of doing that and using it for applications that we still haven’t even thought of. Before email, attachments were not possible and had not even been thought of. We don’t refer to email as this disruptive technology. It is part of day to day life. Blockchain might, and should be like this too one day too. It can power ways of exchanging value, representing real life assets in digital form and allow us to look at current business processes in a different way. The possibilities are endless, even more so when we start considering ways of combining other “new technologies” with Blockchain, like IoT and AI.


What about a career in Blockchain?

We need to demystify Blockchain technology, explain why Bitcoin is just the first and oldest application of the technology, not the only one. Grandparents and parents should be able to sit down and chat to their kids about recent developments.

Until Blockchain technology is as normal for us as email, society will need coders and programmers, researchers and IT architects. But just like email touches everything we do, society will also need lawyers and business leaders and project managers that understand the technology.

Think of Blockchain technology as learning a new language, or acquiring a new skill for life. It’s about enthusiasm, practice and constant learning. Weave that into your personal interests, and what you are good at, and you are onto a winner. Blockchain technology, as with AI, will also change and redefine jobs and careers. Be a step ahead by understanding what Blockchain is and how you can work with it.