Big Banks and some governments are implementing blockchains as distributed ledgers to revolutionise the way information is stored and transactions occur. Their goals are laudable – speed, lower cost, security, fewer errors and the elimination of central points of attack and failure. These models don’t necessarily involve a cryptocurrency for payments.

However, the most important and far-reaching blockchains are based on satoshi’s bitcoin model. Here’s how they work.


Bitcoin or other digital currency isn’t saved in a file somewhere; it’s represented by transactions recorded in the blockchain – kind of like a global spreadsheet or ledger, which leverages the resources of a large peer-to-peer bitcoin network to verify and approve each bitcoin transaction. Each blockchain, like the one that uses bitcoin is distributed; it runs on computers provided by volunteers around the world; there is no central database to hack.

The blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution charged with auditing transactions and keeping records. And the blockchain is encrypted it uses heavy duty encryption involving public and private keys (rather than like the two-key system to access a safety deposit box) to maintain virtual security. You needn’t worry about the weak firewalls of Target or Home Depot or a thieving staffer of Morgan Stanley or the U.S. federal government.


Every ten minutes, like the heartbeat of the bitcoin network, all the transactions conducted are verified, cleared, and stored in a block which is linked to the proceeding block, thereby creating a chain. Each block must refer to the proceeding block to be valid. This structure permanently time stamps and stores exchanges of value, preventing anyone from altering the ledger. If you wanted to steal a bitcoin, you’d have to rewrite the coins entire history on the blockchain in the broad daylight. That’s practically impossible. So the blockchain is a distributed ledger representing a network consensus of every transaction that has ever occurred. Like the world wide web information, it’s the world wide ledger of value – a distributed ledger that everyone can download and run on their personal computer.


Some scholars have argued that the invention of double-entry bookkeeping enabled the rise of capitalism and the nation-state. The new digital ledger of economic transactions can be programmed to record virtually everything of value and importance to humankind: birth and death certificates, marriage licences, deeds and titles of ownership, educational degrees, financial accounts, medical procedures, insurance claims, votes provenance of foods and anything else that can be expressed in code.


The new platform enables a reconciliation of digital records regarding just about everything in real time. In fact, soon billions of smart things in the physical world will be sensing, responding, communicating, buying, their own electricity and sharing important data, doing everything from protecting our environment to managing our health. This internet of everything needs a ledger of everything. Business, commerce, and the economy need a Digital Reckoning.


So why should you care? We believe the truth can set us free and distributed trust will profoundly affect people in all walks of life. Maybe you’re a music lover who wants artists to make a living off their art. Or, a consumer who wants to know where that hamburger meat really came from. Perhaps you’re an immigrant who is sick of paying big fees to send money home to loved ones in your ancestral land. Or a Saudi woman who wants to publish her own fashion magazine. Maybe you’re an aid worker who needs to identify land titles of landowners so you can rebuild their homes after an earthquake. Or a citizen fed up with the lack of transparency and accountability of political leaders. Or a user of social media who values your privacy and thinks all the data you generate might be worth something – to you. Even as we write, innovators are building blockchain – based applications that serve these ends. And they are just the beginning.



For sure, blockchain technology has profound implications for many institutions. Which helps explain all the excitement from many smart and influential people. Ben Lawsky quit his job as the superintendent of financial services for New York State to build an advisory company in this space. He told us, “In five to ten years, the financial system may be unrecognisable . . . and I want to be part of this change.” Blythe Mathers, formerly chief financial officer and head of global commodities at JP Morgan’s investment bank, launched a blockchain-focused technology start-up to transform the industry. The cover of the October 2015 Bloomberg Markets featured Masters with the headline “It’s all about the blockchain.” Likewise, The Economist, ran an October 2015 cover story, “The Trust Machine,” which argued that “ the technology behind bitcoin could change how the economy works.” To The Economist  blockchain technology is “the great chain of being sure about things.”


Banks everywhere are scrambling top level teams to investigate opportunities, some of these with dozens of crackerjack technologists. Bankers love the idea of secure, friction less, and instant transactions, but some flinch at the idea of openness, decentralisation, and new forms of currency.


The financial services industry has already been re-branded and privatised blockchain technology, referring to it as distributed ledger technology, in an attempt to reconcile the best of bitcoin – security, speed , and cost – with an entirely closed system that requires bank or financial institution’s permission to use. To them, blockchains are more reliable databases than what they already have, databases that enable key stakeholders – buyers, sellers, custodians, and regulators, – to keep shared, indelible records, thereby reducing cost, mitigating settlement risk, and eliminating central points of failure.


Investing in blockchain start-ups is taking off, as did investing in dot-coms in the 1990s.

Venture capitalists are showing enthusiasm at a level that would make a 1990s dot-com investor blush. In 2014 and 2015 alone, more than one $ billion of venture capital flooded into the emerging blockchain eco-system, and the rate of investment is almost doubling annually. “We’re quite confident,” said Marc Andreessen in an interview with The Washington Post, “that when we’re sitting her in twenty years, we’ll be talking about (blockchain technology) the way we talk about the Internet today.”


Regulators have also snapped to attention, establishing task forces to explore what kind of legislation, if any, makes sense. Authoritarian governments like Russia’s have banned or severely limited the use of bitcoin, as have democratic states that should know better, like Argentina, given it’s history of currency crises. More thoughtful governments in the West are investing considerably in understanding how the new technology could transform not only central banking and the nature of money, but also government operations and the nature of democracy. Carolyn Wilkins, the senior deputy governor of the Bank of Canada, believes it’s time for central banks everywhere to seriously study the implications of moving entire national currency systems to digital money. The Bank of England’s top economist, Andrew Haldane, has proposed a national digital currency for the United Kingdom.


These are heady times. To be sure, the growing throng of enthusiasts has its share of opportunists, speculators, and criminals. The first tale most people hear about digital currencies is the bankruptcy of the Mt. Gox exchange or the conviction of Ross William Ulbrict, founder of the silk Road darknet market seized by the federal Bureau of Investigation for trafficking illegal drugs, child pornography, and weapons using the bitcoin blockchain as a payment system. Bitcoin’s price has fluctuated drastically recently, and the ownership of bitcoins is still concentrated A 2013 study showed that 937 people owned half of all bitcoin, although now it is the talk of the town. Daily newspapers have their own section dedicated to crypto.

How do we get from porn and ponzi schemes to prosperity? To begin, it’s not bitcoin, the still speculative asset, that should interest you, unless you are a trader.

My site and writing is something bigger than the asset. It’s about the power and potential of the underlying technological platform. The differentiation to the DOTCOM debacle is a hot topic among futurists like myself and Senior Freelance Head of Development at Deutsche Bank. THE main headline in the BBC panorama documentary.

The BBC are the leaders in playing Devil’s Advocate in interviews and in documentaries.

Is the underlying technological something with profound, and prolonged permanency?

The digital currencies are critical to the blockchain revolution, which is first and foremost about the peer-to-peer exchange of value, especially money.

My glass is half full. My antifragility education means I’m unaffected by what happens.

Glad  I can debate with a BBC like devil’s advocate severely abnormal bell curve.




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