Blockchain: The Invisible Technology That's Changing the World
Blockchain-based networks, decentralized apps (DApps), and distributed ledgers are becoming the foundation of much of your digital life. There's a new immutable digital fabric remaking the internet beneath us, and you probably don't even realize it.
A blockchain is made up of two primary components: a decentralized network facilitating and verifying transactions, and the immutable ledger that network maintains. Everyone in the network can see this shared transaction ledger, but there is no single point of failure from which records or digital assets can be hacked or corrupted. Because of that decentralized trust, there's also no one organization controlling that data, be it a big bank or a tech giant like Facebook or Google. No third-parties serving as the gatekeepers of the internet. The power of blockchain's distributed ledger technology has applications across every kind of digital record and transaction, and we're already beginning to see major industries leaning into the shift. First up are the big banks and tech giants. Big business will always drive innovation, and the rise of blockchain-based smart contracts (read on for a deeper explanation) turns blockchain into a middleman to execute all manner of complex business deals, legal agreements, and automated exchanges of data. Companies such as Microsoft and IBM are using their cloud infrastructure to build custom blockchains for customers and experiment with their own use cases, like building a worldwide food safety network of manufacturers and retailers.
On the academic side, researchers are exploring blockchain applications for projects ranging from digital identity to medical and insurance records. At the same time, dozens of startups are using the technology for everything from global payments to music sharing, from tracking diamond sales to the legal marijuana industry. That's why blockchain's potential is so vast: When it comes to digital assets and transactions, you can put absolutely anything on a blockchain. A host of economic, legal, regulatory, and technological hurdles must be scaled before we see widespread adoption of blockchain technology, but first movers are making incredible strides. Within the next handful of years, large swaths of your digital life may begin to run atop a blockchain foundation—and you may not even realize it.
We also need open standards to tie the blockchain industry together. The most prominent coalition working to make that happen is the Hyperledger project. Hyperledger is an open-source initiative to create an open, standardized, and enterprise-grade distributed ledger framework and code base to be used across industries. Overseen by The Linux Foundation, its members include tech companies (Cisco, IBM, Intel, Red Hat, Samsung, VMware, and more), big banks (JPMorgan, Wells Fargo, and so on), blockchain startups such as Bloq, and a host of others. The project recently released the first production-ready version of Hyperledger Fabric as a foundation for building blockchain apps. Big blockhain players like Microsoft are beginning to get into the standardization game as well, with Redmond releasing its own Coco Framework to work with existing protocols and build more powerful governance and data confidentiality into private blockchains.
"The Linux Foundation is the key layer of governance for shepherding and maturing open-source products," said Garzik. "There are many blockchain peddlers out in the market right now, and one of the biggest pain points we see is incompatibility; a large bank that has merged 10 businesses over the past decade and has a lot of halfway-compatible internal legacy systems. That's where the foundation and Hyperledger really come to the fore. As young as the blockchain industry is, the kind of technical standards-making we need for interoperability has so far been absent."
Potchain: Where Blockchain Meets Marijuana
Medical and recreational marijuana is being legalized in more and more states across the U.S. This new, fast-growing sector of the economy presents challenges we haven't dealt with before, partly because even in states where it's legal, there are still a lot of things cannabis-related businesses can't do. Blockchain is helping fill in gaps for entrepreneurs, particularly when it comes to banking and legal protection.
Current federal banking regulations still preclude banks from doing business with cannabis companies, leaving them without a dedicated banking system. Tokken, a digital bank startup, gives cannabusinesses a bank account and blockchain-based transaction history that's linked to brick-and-mortar banking institutions and seed-to-sale systems, with Tokken as the middleman.
More interesting is what Medical Genomics is doing on the science side of the potchain. The life sciences company is mapping and sequencing the DNA of different cannabis strains, then storing and registering that info on the Bitcoin blockchain. The company lists this information on its public-facing Kannapedia strain database, but of far greater importance is how the company uses blockchain-based strain DNA as intellectual property (IP) protection for growers. The government makes it very difficult to obtain trademarks and patents for weed strains. But a blockchain provides irrefutable legal proof a grower can use to prove ownership of a strain if challenged by other growers or the pharmaceutical corporations that will ultimately enter the legal industry.
Check out the whole story for more on how blockchain is blazing a new trail for the legal cannabis industry.