TED Talk — How Blockchain is revolutionizing and revitalizing stagnant industries.

The manuscript

The year was 2008 and the US experienced one of the most devastating financial market crashes since the 30s. The Lehman Brothers filed for the biggest bankruptcy to date, exceeding well over 1.1 Billion. As a result hundreds-of-thousands of Americans are feeling the negative repercussions cultivated by greedy banks. How could this have been alleviated or potentially prevented or alleviated?

Blockchain technology since its implementation has already disrupted many industries, with financial being one of the first. Following Bitcoin’s 10th year anniversary just last month, we are barely starting to realize the potential use cases for blockchain technology, and that it exceeds far beyond the financial sector.

But what is a blockchain?

A more technical definition would suggest that blockchain is a distributed database that provides an unalterable, (semi-)public record of digital transactions. Each block aggregates a timestamped batch of transactions to be included in the ledger — or rather, in the blockchain. Each block is identified by a cryptographic signature. These blocks are all backlinked; that is, they refer to the signature of the previous block in the chain, and that chain can be traced all the way back to the very first block created, aslo known as the genesis block. As such, the blockchain contains an un-editable record of all the transactions made.

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Simply put, blockchain is a shared ledger for recording the history of transactions that cannot be altered.

Don’t overwhelm yourself by believing you must understand the underlying mechanics of blockchain technology to be a participant.

So, Why Do We Need it?

Well, transactions take place every second — orders, payments, account tracking. Often, each participant has their own ledger and, thus, his or her own version of the truth.

Having multiple ledgers is a recipe for error, fraud, and inefficiencies. Therefore, I propose that we not only embrace blockchain technology, but also adopt and integrate the tech into our stagnant industries. The goal is to see a transaction end-to-end and reduce those vulnerabilities.

Great, we definitely need it, now how can we use it?

Let’s go to Sierra Leone where you have inhumane work environments populate most of in West Africa. Here miners dig for illicit diamonds. What if I told you that a high-majority of diamonds currently in circulation are synthetically or illegally derived? How certain can you be that the diamonds on your ring are not blood diamonds?

Well, a company located in Europe called Everledger is tackling this exact problem. Blockchain’s transparent immutable protocol allows for prospective purchasers to view the diamonds full transaction history in its supply chain. IBM recently spent $800 million on producing a more efficient and effective blockchain for supply chains.

Utilizing cryptography, the underlying mechanics behind blockchain, buyers can verify the source and authenticity of diamonds, and regulators can be certain that no one is cheating the system. The immutable nature of blockchain and its consensus protocol verifies each transaction, thus promoting a trustless transparency.

Basically, supply chain management on a blockchain can improve; traceability, Supply Chain Auditing, Contract Enforcement & Management, Damage & Mishandling Management, Oversight On Counterfeiting, irradicate illegal trafficking and tracking.

Awesome! Blockchain can verify that my coffee is “fair trade”, and allow me to track my Amazon package more easily, but what about storing my data?

This type of immutable data storage would have been ideal to prevent recent hacks from companies like Facebook and Equifax.

Let’s step into the mind of a hacker, whose main goal is to steal your data. What sounds easier to accomplish: 1. Attack a centralized data storage center with one global password to access all files, or 2. Hack a decentralized or distributed storage center with complex algorithms protecting the files, bits of files distributed across the network, and do this x-times for each computer in that network?

The use case for blockchain to prevent data storage hacks is evident. On a decentralized network, files are broken apart and spread across multiple nodes, in a process called sharding. These files are encrypted with a private key which makes it impossible for any other node participating in the network to look at your file. Plus, due to sharding, the files are just a fraction of their original self, which means reading their entire content impossible.

There are many *successful* companies already offering these services such as Storj, Filecoin, and Arweave, which in my opinion is a much more innovative blockchain dedicated specifically for scalable and efficient on-block data storage.

Tokenized data storage is a perfect use case for the Health Care industry where billions of dollars are inefficiently spent on HIPAA compliant security and slow outdated storage centers. A local company called Medicine Box is going to leverage tokenized data storage to remedy those main problems.

So, now that I can store my data securely, who controls my data?

The internet was an amazing tool that helped truly democratize data. I remember learning how to code in middle school because of Google while simultaneously wasting hours a day going to the deep end of YouTube.

Since then cookies have been following me around capturing and retaining my digital breadcrumbs. Effectively creating my online persona, the virtual me. Now, as amazing as the internet is we are being economically disenfranchised by data brokers who capture and sell our data without our knowledge or consent. Blockchain is allowing the public to take control of their personal information and online interactions.

Let’s go back to 2017 where Zucks is in a congressional hearing for his most recent scandal. Senators are demanding to know the extent of the information his company collects from users — and how data is subsequently used for advertising.

DataWallet is undertaking this problem by directly leveraging the application of blockchain. In addition to securely storing the data, as discussed previously, it allows the users to once again take control and monetize the data they choose to be public, and have the ability hide the rest. The transparency once again holds massive institutions like Google and Facebook to be accountable for ethical data monetization by placing the power back to the people.

Cool, we can check big business, but what about government?

Now, there have been disputes in the recent election regarding our new president. Regardless of your political affiliation, we must not be ignorant to the facts that fraudulent voting occurred, and that the 2016 election was not an anomaly. How can blockchain prevent fraudulent voting and make government more efficient?

The problem with fraudulent voting is not being able to effectively prevent non-citizens from participating while simultaneously preventing a citizen from being able to cast multiple votes in various states. This derives a problem cryptographers formally call the “double spend” attack. More commonly associated in finance as counterfeit money or transaction. This type of double use-assets is commonly found in the currently voting system.

The simple explanation for preventing a double spend attack in blockchain would go as follows. The participant casting a vote only has 1 vote(or a token for this case) and it is important that the voter doesn’t have the ability to cast it more than once. The way this is prevented is by assigning a unique personal signature that is derived from the clever math which powers the technology. When that unique personal signature is used to cast a vote that vote is transmitted to all other computers in the networks, or for this scenario, citizens. Then that transaction is processed and verified by the consensus protocol, in which, miners solve complex algorithms to check that the vote for the person in question used the proper signature. Now that the vote has been accepted and added to the chain it is 1. impossible to attempt to cast a second vote as the algorithm would recognize that the token has already been used, and 2. prevent the vote from being removed as per the data storage properties blockchain has.

Lastly, blockchain can promote the participation within the voting system as well. The Secretary of State for NY said that less than 25% of citizens voted in the 2016 elections for NYC. Sovereign is a non-profit company in Palo Alto attempting to implement blockchain in the current voting system. They suggest that a mobile version that could be secured using the native mechanics behind blockchain, and can potentially increase voter turnouts nationwide.

The transparent component of blockchain allows the citizens to regain power and check government, truly democratizing their votes once again.

So, what happens if Government fails to uphold their promises, how can blockchain enforce the law?

I want to discuss smart contracts as this will be applicable to both the legal and insurance industries. Let’s step back for a second and talk about Ethereum, a Canadian based start up. Ethereum is considered by many to be blockchain 2.0. Bitcoin allowed transactions of the digital asset to occur but that was essentially the extent of its capabilities. ETH is, in simple terms, identical to Bitcoin’s protocol except much more advanced. Ethereium allowed participants to create “smart contracts” which is a glorified contract that self-executes. This is another way for users to get around slow and expensive intermediaries.

A smart contract, in my opinion, is analogous to a vending machine. These machines run a basic program that states “if money enters & click button = drink”. If you put in $1.00 into the machine and click coca-cola the system program acts as some type of agreement and as a result the coke is dispensed.

> If money received = $1.00
>   && the button pressed is coca_Cola
> Then release coca_Cola

In the terms of a traditional document-based contract, we can say that the program is like the contract, the code is the words, and clicking the button is the signature.

Now imagine how efficient law can be conducted if we use self-executing contracts that satisfy the predetermined agreed upon parameters. How could this radically change so many industries while simultaneously replacing the need for inefficient greedy middlemen?

Remember, this smart contract is also logged into the blockchain which means it inherits all the benefits that come with the technology as well, such as immutable contracts, and transparency.

Smart contracts can communicate with IoTs or internet of things which could be self-monitored or executed during accidents which would streamline the insurance process while decreasing premiums as authentications become automated. This leaks back into the financial world.

The financial sector, itself, was first to feel the impact of blockchain, but PlutusX another local company is taking it one step further. They aim to democratize wealth generating tools and intend to leverage decentralized technology in an effort to reinvent the way banking is perceived. So, how could have blockchain possibly prevented 2008? The global transparent ledger would have allowed regulators to more efficiently detect the growing numbers of uncreditworthy borrowers. Blockchain within PlutusX holds them accountable and allows the company to grow a sustainable and ethical financial ecosystem.

Following Bitcoin’s 10ths year anniversary just last month, we are barely starting to realize the potential use cases for blockchain technology, and smart contracts are just the start. The use cases are unimaginable and that’s why I propose that we not only embrace blockchain but integrate it. The technology has the immense potential to radically revolutionize and revitalize stagnant industries, if we allow.

Thank you!

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Written by: Angel Mondragon.