An Introduction to the Blockchain Economy Part 2

Possibilities of Blockchain

The Bitcoin network doesn’t store information about identities, so no one would know whom the addresses belong to, but everybody would be able to see the transaction. However, if you know someone’s public wallet address, you can monitor the address using https://blockchain.info/ and you can see all the transactions for the address, including incoming and outgoing transactions since the time the address was created. This means that the Bitcoin network doesn’t have real anonymity. For example, if you see a Bitcoin address on a website that is asking for donations, you can check that address using https://blockchain.info/ and see the amounts of donations and the times when the donations were coming.

It may seem that not storing information about identity is a big step towards protecting privacy, but in reality, it is not so. If someone is determined to find information about a party that is using the Bitcoin network, it can be fairly easy to do so. For example, you can monitor the activity for an address and based on the times make conclusions about what time zone the party that uses the address lives. If you know that someone is supposed to get a certain amount of money, you can monitor the network for the amount and then connect the dots this way. All of this means that even the Bitcoin network is semi-anonymous, but it is not fully anonymous and the transactions and parties on the network are trackable.

All of this means that identity can actually be a part of a blockchain network. For example, governments can have blockchains that record all kinds of identities and data, from marriage records to incorporation information about businesses.

 

Blockchains can confirm the status

Just like the Bitcoin blockchain tracks what addresses have how much money at what time, blockchains could track status in general. For example, in Australia citizens not just have a right to vote, they actually have to vote. Australia has a system called compulsory voting, meaning that the country has a set of laws that require eligible citizens to vote in elections. The system was introduced in the country in 1915, in the state of Queensland, and became country-wide for national elections for citizens eighteen and over in 1924. The requirements include a set of actions that cover everything from enrolling in voting, attending a voting station, actually voting, and having the name marked off the list. People that do not vote may have to pay a fine.

Obviously, managing a process like this is a lot of work and a blockchain network could be of immense help here. Compulsory voting exists not just in Australia. The list of countries where voting is compulsory is long and includes Argentina, Belgium, Ecuador, Luxemburg, Peru, and Singapore.

Voting is just one of examples of how blockchain could help monitor status in a tamper-proof way. Car registrations, eligibility for government benefits, and even employment history and status could all be on blockchain networks.

 

Blockchains can confirm the authority

This property of blockchains is closely connected to blockchains monitoring and confirming statuses and ownership, and identities. For instance, information about who can access a bank account, unlock an apartment, sit in a voting body, work with children, and access restricted areas all could be a part of the blockchain.

 

A real-life example of a non-financial working blockchain project

One of the issues with many initial coin offerings and blockchain projects is that they start collecting funds and making promises before they actually implement anything. Initial coin offerings are hard for governments to control and regulate because a company or a person can run an initial coin offering from anywhere in the world and if one country implements a set of restrictive laws, the person or the company can easily move to a different country.

For instance, in December of 2017, the country of Belarus has passed laws that legalize transactions in cryptocurrencies, initial coin offerings and exchanges of cryptocurrencies into regular currencies. The country also said that all the cryptocurrency trades will be tax-free until 2022.

However, the problem with Belarus is that the country had a president in power since 1994. His name is Alexander Lukashenko and he is known as “the last dictator of Europe,” with many newspapers and magazines calling him that, including Washington Post (https://www.washingtonpost.com/news/democracy-post/wp/2017/03/25/why-europes-last-dictatorship-keeps-surprising-everyone/?utm_term=.cbb81d47364b), Economist (https://www.economist.com/blogs/economist-explains/2017/01/economist-explains-13), New York Times (https://www.nytimes.com/2017/10/05/world/europe/belarus-minsk-technology.html), and Bloomberg (https://www.bloomberg.com/news/articles/2017-12-22/europe-s-last-dictator-now-wants-to-be-its-blockchain-king).

With all kinds of scammers getting into the cryptocurrency space it may be easy to get overwhelmed, yet in addition to malicious actors there are serious players in the space working on the serious projects, including companies such as Google, Microsoft, IBM and institutions such as the Massachusetts Institute of Technology (MIT), which is one of the best educational and research institutions in the world that as of 2017, had 91 Nobel laureates, 25 Turing Award winners, over 50 National Medal of Science recipients and 6 Field Medalists associated with the school.

During the summer of 2017, the MIT in cooperation with a company called Learning Machine has provided some of the MIT graduates with an option of getting not just a paper diploma, but also access to their diploma via an app that uses the same blockchain as Bitcoin and the same cryptography algorithm, SHA-256. Also, just like Bitcoin is open source, the software by the MIT and the learning machine is open source. It is called Blockcerts and can be found at https://www.blockcerts.org/

MIT and Learning Machine have created the project because the existing process of verification of educational credentials is extremely inefficient.