Blockchain technology is changing how the world works

Blockchain is fuelling a revolution in technology that promises to disrupt the lives of nearly everyone on the planet within the next 25 years. Initially introduced as a part of the Bitcoin cryptocurrency in 2008-2009, the technology is disrupting industries around the globe as a completely different way of providing trust and simplicity to track banking transactions, financial processes, healthcare and medical records, supply chains, legal contracts, and a host of other data-driven applications.

Blockchain is already changing the world by providing new ways of developing trust between people and businesses. Blockchain's design provides new opportunities for a great many applications where trust, transparency and security are essential. In addition to Bitcoin, many more payment platforms are being incorporated by financial services industries. Within the next few months, many banked-based transactions will begin incorporating the technology for transactions as consumers clamour for increased security and transaction speed. Bitcoin has already surpassed PayPal as a convenient, yet secure online payment method. More than 40 banks and a wide variety of new financial start-ups are leading the way in establishing Blockchain technology financial systems for their clients. Many more and many different financial Blockchain systems will be established in the future.

Klaus Schwab, founder and executive chairman of the World Economic Forum and author of The Fourth Industrial Revolution, highlights a survey of 800 executives, suggesting 58% of those executives believe that more than 10% of global GDP will be stored using Blockchain technology in the future. This is due to Blockchain's distributed, open architecture enabling an open transaction verification process, which makes fraud difficult. Its transparency to all transactions enables anyone to trace or audit all entries into the ledger.

Implications of the system exceed strict financial transactions, opening opportunities for transparent business and government processes, workflows, supply chains or product lifecycles around the globe. Consider how Blockchain technology could be used in the performing arts.

Creators of intellectual property, such as artistes, can incorporate Blockchain technology to redefine how they are remunerated for their work. Currently, artistes' works are offered to consumers through third-party intermediaries, and often several intermediaries, all taking a portion of the revenue and limiting the artistes' ability to set pricing, sharing or other advertising in conjunction with their intellectual property. This often leads to artistes not receiving compensation for their work, or at best undervaluing their performance.

Inherent characteristics of Blockchain technology can level the playing field for artistes. Blockchain can enable 'smart contracts', which are software-based agreements placed into systems capable of automatically executing and enforcing the terms of the contract. Smart contracts could be established by the artistes themselves to manage digital rights and allocate revenue shares equitably, all the while bypassing conventional contracts executed through third-parties. PeerTracks is one service now being used to help artistes seek immediate royalty payments and maintain their intellectual content ownership. Each song or artistic performance uploaded by the artiste would have a smart contract attached, specifying the terms of the contract and dividing revenue accordingly as users download the performances.

Blockchain also provides open, transparent transactions which can be seen and validated by anyone accessing the work. This open ledger allows stakeholders to quickly analyse their overall contribution to the creative work. With open visibility to demand the creative content, artistes can establish dynamic pricing for their intellectual property based on supply and demand, and set the price of their work directly. In addition, users would be able to see the actual owner of the creative material. By doing so, ownership can be traced, and creative content more securely shared.

One issue still to be resolved involves the storage of the creative content, since Blockchains cannot store much data. This could be a significant problem for live-streaming video. Currently, Blockchain technology associated with Bitcoin allows only 40 bytes of metadata per transaction. Typical video clips are large files, especially if they have not been compressed, which reduces their resolution and playback quality. A four-minute video on YouTube can be over one gigabyte even when compressed. With consumers demanding high-resolution video streams, storage and incorporation into Blockchains will be a challenge for technologists to overcome.

In education, Sony and IBM are considering the use of Blockchain technology to provide unaltered tracking and storage of diplomas, transcripts and other educational records. By incorporating Blockchain technology, these and other public records would be widely available without the fear of unscrupulous persons altering their records for employment and promotion, or other personal gains.

Governments are also attempting to incorporate Blockchain technology to streamline government processes and make agencies more accountable and efficient. In the Arab Emirates, Dubai city officials are building a single software platform for 25 city agencies where Blockchain technology can be incorporated to streamline government. Dubai's goal is to be paperless by 2020. One project - property deeds management using Blockchain technology - has already been implemented in Sweden, to make real estate fraud nearly impossible. When property is purchased, the buyer and seller record their transaction in Blockchain. If all entries are correct, the system will confirm that the buyer's funds are sufficient for the sale, and buyer and seller will receive instant approval. The transaction will be permanently recorded in the Blockchain with the advantage that the transaction will be public, transparent and unalterable.

(Iyengar is a distinguished Ryder Professor and Director, School of Computing and Information Sciences, Miami; Miller has been with US Air Force for over two decades and is Coordinator, Discovery Lab, Florida International University)