Blockchain Revolution

Blockchain Revolution

By: Don Tapscott & Alex Tapscott

Allison’s Rating:

Blockchain Revolution by Don Tapscott and Alex Tapscott delivers a comprehensive review of blockchain technology and the implications it has on a global society. Woven throughout the book are three main topics of interest. The first portion of the book builds a foundation of knowledge for the reader, and solidifies guiderails for the subsequent topics. Second, why blockchain has gained popularity and what this newfound popularity means across several industries is examined. Intertwined throughout the entire book is the third theme – why people should care about blockchain.

What is blockchain?

Endeavoring to showcase the impact of blockchain on society, the authors first attempt to overcome the challenge of explaining blockchain to the layperson. They define blockchain as a, “global spreadsheet or ledger, which leverages the resources of a large peer-to-peer bitcoin network to verify and approve each bitcoin transaction” (pg 6). To supplement the basic blockchain definition, Tapscott expands upon three mainstays of blockchain:

1) Blockchain is Distributed: Independent of a central database, blockchain co-exists across a global network of computers, operated and provided by volunteers, rather than employees of a corporation 2) Blockchain is Public: Given its distributed nature it does not belong to any one corporation, but is part of the public network and can be viewed by anyone at any time. 3) Blockchain is Encrypted: The cornerstone of blockchain is the encryption which consists of the handshake between private and public keys ensuring “virtual security” (pg 6).

While this distilled definition seems straightforward when first introduced, the real-world complexity and abstract nature of blockchain must be considered. After re-reading the introductory chapter several times, I found I had to turn to outside sources to understand what blockchain is. This exact scenario proves to be a hurdle for blockchain becoming integrated into every day society, with most of society possessing a vague understanding of its inner workings (pg. 254).

Why is blockchain popular?

After attempting to establish a working definition of the blockchain technology, the Tapscotts dive into a “fan-boy” view of how blockchain will impact socio-economic growth. From the antiquated technology of financial and insurance industries to small local coffee shops, blockchain will permeate their workflows offering economic gains through system stability, speed and reduced operating costs. With future transactional data being largely comprised of blockchain technology, it is critical big data applications are prepared to consume this change. One interesting concept at risk to change due to “blockchain influences” is mobile payments. I had the opportunity this past summer to spend time in Kenya, staying with family in a small village outside of Eldoret. The main form of any monetary transaction was M-Pesa, a mobile phone based money transfer and microfinancing service. These mobile payments revolutionized the developing nation’s economy , but is based on a very different technology than blockchain. It will be interesting to watch these two technologies reconcile their differences (and potentially complement one another), as blockchain continues to gain popularity across industries.

Furthermore, Blockchain Revolution reveals insight into the future of Internet of Things and blockchain integration. This “mesh network” provides the key identity authentication process for small devices to work together to provide societal value (pg 146). Understanding the part that blockchain plays in IoT is critical, considering the global IoT market is expected to reach a $457 billion industry by 2020 . This will transform lifestyles from transportation to waste management.

Another reason for blockchain’s rapid growth in popularity how the technology is redefining industries and transforming their business models, equipping thought leaders with the tools necessary to disrupt the status quo. This change is underscored by the recent developments in the peer to peer collaborative businesses (i.e Uber, Lyft and AirBnB). In my experience, these company’s public datasets are popular choices for data science projects. This is not a coincidence; big data fuels the sharing economy. For the sharing economy to be successful companies must use data to extract consumer wants and needs and present them in a tangible fashion. Tapscott proposes blockchain will transform this model into a metered economy based on the ability to “rent and meter the use of our excess capacity” (pg. 135) without the hassle of physical sharing. They indicate that blockchain will become the supply chain of the future, through micro transactions and renting intangible assets such as Wifi Hotspots or storage space. Tapscott suggests this philosophy can be applied to physical items as well, sharing bikes and cars with the future era of autonomous vehicles. A challenge that must be addressed is the amount of data collected by devices will reach exponential growth in the block chain era. IoT devices becoming synchronized with the world through a general ledger pose an even higher risk of mass surveillance by those in power (pg 274) thus increasing the risk of malfeasance.

Why should I care about blockchain?

As much as blockchain is about securing data, it is about preventing the misuse and abuse of users in data fueled systems and economies. Abuse of data is no stranger in today’s news, including headlines of Facebook’s Cambridge Analytical scandal. Such large-scale abuse begs the question – could blockchain allow users to reclaim their digital identity? Blockchain provides end users with four basic constructs of trust in the digital age including honesty, consideration, accountability and transparency (pg 10). These foundational concepts are missing when examining scandalous actions of corporations like Facebook. Today, large scale companies own our data, and as a consumer we are not in the position of power to demand transparency and verity in ownership. With blockchain technology, we can understand the data they have and demand compensation if the money is used in ways for corporate gain (pg 45).

Blockchain encapsulates fiscal integrity for the end user. One prime example is in the way credit scores are maintained, and how blockchain eliminates the archaic concept of “one point perspective of identity” (pg 80). This digital identity based on blockchain suggests a future consisting of medical records which are sharable without risk of data breaches, corruption free voting practices and digital signatures impenetrable by hackers. As the volume of big data continues to grow at a high velocity blockchain will continue to offer end consumers the confidence that their data is secure.

Closing Thoughts

Blockchain Revolution successfully portrays several use cases for blockchain technology. Throughout the book readers are reminded of the “What’s In It For Me” concept and can easily see blockchain integrating into their lives. However, Blockchain Revolution leaves the reader with unanswered questions about integration challenges and overall adoption of blockchain that will need to be addressed before it becomes part of mainstream technology stacks.