When physicists multiplied the internet’s usefulness by creating the World Wide Web, much of the Web’s potential wasn’t immediately obvious. Now media observers are predicting a comparable multiplication of usefulness for blockchain, the information technology underlying the cryptocurrency Bitcoin.
Once again, the general sense is that much of the potential isn’t immediately obvious. There’s talk of society-altering technological change at historic levels planetwide. As of late winter 2017, attention to blockchain has begun spreading to major media from publications covering information technology and business.
Judging by keyword searches at Science and Nature, the attention hasn’t spread much among scientists, though the engineering publication IEEE Spectrum shows lots of coverage. But at Google News on 9 March, the term blockchain yielded “about 1,120,000 results” across the media generally. Even though physicists aren’t driving this change—historic or not—physicists and physics stakeholders might want to take increased notice too.
So what is blockchain? Major media organizations—national newspapers, the Huffington Post, Reuters, Bloomberg, Forbes, others—are learning rapidly how to answer. In part they consult hosts of specialized media like Mondaq, which describes itself as delivering “insight, opinion and commentary on legal, regulatory and financial topics across every continent.” A recent Mondaq posting gave this answer:
The blockchain is fast becoming a symbol of the fourth industrial revolution. After steam, electricity and computing, this is the term coined by Davos founder Klaus Schwab for the deep digital transformation that Schwab says is now upon us. It is heralded as the next big disruptor, it’s got geeks and banks in a tizzy, but as yet there’s little mainstream evidence of major impact.
So what is the blockchain? The analogy is the finance director’s (FD) sales ledger. It’s a comprehensive, always up-to-date accounting record of who holds what or who transferred what to whom. The ‘what’ in the blockchain is pretty much anything that can be recorded—physical assets like diamonds (blockchain is used by Everledger to certify origination of 900,000 diamonds) and land (where blockchain will be a factor in the upcoming sale of the Land Registry) as well as intangibles like electronic cash (the rationale of Bitcoin, the blockchain’s originator), transactions in securities, derivatives and other financial instruments and government interaction with citizens.
The clever bit is that it all works through cryptography—authenticating parties’ identities and creating immutable hashes (digests) of each ledger record, the current page of records (block) and the binding that links (chains) each block to the earlier ones. The really clever bit is that instead of the FD keeping one instance as ‘single version of the truth’, the blockchain ledger is distributed: a complete, current copy is held on the computers of each of the network participants (miners) who help keep it up to date. This is deliberate and serves to insulate the integrity of the ledger against cyberattack as any hacker would have to control more than half the network’s computing capacity to change any record in the block.
But like all other explanations, that one doesn’t quite nail down what blockchain is all about. Even long after the Web had established itself, many still struggled to grasp it, as illustrated by a politician’s net-neutrality-debate description of the internet as a “series of tubes.” A comparable sense of struggle to grasp blockchain pervades media coverage now, as seen in the article “IBM bets big on the arcane idea behind Bitcoin” on the front page of the 5 March New York Times Sunday business section. It began, as blockchain articles often do, by anchoring itself in a practical example:
Frank Yiannas has spent years looking in vain for a better way to track lettuce, steaks and snack cakes from farm and factory to the shelves of Walmart, where he is the vice president for food safety. When the company dealt with salmonella outbreaks, it often took weeks to trace where the bad ingredients came from.
Then, last year, IBM executives flew to Walmart’s headquarters in Arkansas to propose a solution: the blockchain.
As Mr. Yiannas studied their pitch, he said, “I became increasingly convinced that maybe we were onto the holy grail.”
Holy grail? That kind of excitement abounds, but as other articles do, the Times piece first moved on to its own effort to explain blockchain:
The blockchain—the buzzy, bewildering technology behind cryptocurrencies like Bitcoin—is starting to be applied to real-world problems like tracking pork chops, shipping containers and footwear with a speed and security not currently possible. The IBM-Walmart partnership is one of the biggest practical tests to date.
At its heart, blockchain simply refers to a bookkeeping method that “chains” together entries so that they are very difficult to modify later. It provides a way for large groups of unrelated companies to jointly keep a secure and reliable record of their transactions.
IBM is trying to position itself at the forefront of the heated competition for practical uses of this arcane idea. Walmart is just one of 400 IBM clients testing it out, and IBM now has around 650 employees dedicated to the technology.
The most immediate business opportunities are in the financial world as a tool to track and trade stocks, bonds and other assets. But in the next week, Maersk, the global shipping giant, is expected to announce it is using IBM’s version of the blockchain to track the avocados, flowers and machine parts it carries on its enormous cargo ships. Last month, the government of Dubai said it was working with IBM to trace the goods flowing through its ports.
Yet success is far from assured.
Like that Times piece, an Economist article from late 2015 opened with a concrete, graspable, illustrative example of a problem blockchain might be able to solve:
WHEN the Honduran police came to evict her in 2009 Mariana Catalina Izaguirre had lived in her lowly house for three decades. Unlike many of her neighbours in Tegucigalpa, the country’s capital, she even had an official title to the land on which it stood. But the records at the country’s Property Institute showed another person registered as its owner, too—and that person convinced a judge to sign an eviction order. By the time the legal confusion was finally sorted out, Ms Izaguirre’s house had been demolished.
It is the sort of thing that happens every day in places where land registries are badly kept, mismanaged and/or corrupt—which is to say across much of the world. This lack of secure property rights is an endemic source of insecurity and injustice. It also makes it harder to use a house or a piece of land as collateral, stymying investment and job creation.
That piece ended by going back to Ms. Izaguirre to speculate about blockchain and the future: “A world with record-keeping mathematically immune to manipulation would have many benefits,” the ending declared. “Evicted Ms Izaguirre would be better off; so would many others in many other settings. If blockchains have a fundamental paradox, it is this: by offering a way of setting the past and present in cryptographic stone, they could make the future a very different place.”
The Harvard Business Review, another source for major media covering blockchain, offers looks into that possible “very different place.” As of 9 March, HBR had run nine blockchain articles just this year, not counting the ones omitting the word itself from their headlines. Some of those headlines suggest some of the breadth of what’s envisioned:
- “The promise of blockchain is a world without middlemen”
- “The blockchain will do to banks and law firms what the Internet did to media”
- “How blockchain will change organizations”
- “The potential for blockchain to transform electronic health records”
- “How blockchain applications will move beyond finance”
So is this all just hype and buzz? Ray Valdes, writing this month at Forbes and representing Gartner Inc, doesn’t think so, but that doesn’t mean he doesn’t see some excess enthusiasm. His byline bio at Forbes calls Gartner “the world’s leading information technology research and advisory company.” Valdes predicts that thanks to confusion about blockchain, “90 percent of the enterprise blockchain projects launched in 2016 and the first half of 2017 will meet a premature end within 24 months.” Often a blockchain solution just isn’t the right choice, he says. A Wall Street Journal article appearing at nearly the same time judged concerning banks that “so far, there has been more hype than tangible progress on blockchain.”
Valdes sees another phenomenon: the CEO whose ambition and drive to get with the next big thing lead her or him into overeagerness. A Guardian article last year put it this way: “The undeniable potential of the blockchain has led to it becoming one of tech’s newest buzzwords; companies with little good reason to use a distributed ledger throw it in their business plan anyway, in the hope of getting an extra $25 million from venture capitalists eager to cash in on the trend.”
But then, that’s probably to be expected during what a January Guardian article called the present “exploratory, Wild West phase of blockchain development.” And in that Wild West, it’s easy to find optimism. That Wall Street Journal article, despite its mild skepticism, included this: “In January, the consulting firm Accenture … estimated that eight of the world’s largest investment banks could realize an average of $10 billion in annual cost savings, by 2025, assuming blockchain technology reaches widespread use.” At the Guardian, meanwhile, the UK scholar and public intellectual John Naughton was asking “Is blockchain the most important IT invention of our age?” That Economist article praised what it called “the mixture of mathematical subtlety and computational brute force” in blockchain’s consensus mechanism. It also observed, “Libertarians dream of a world where more and more state regulations are replaced with private contracts between individuals—contracts which blockchain-based programming would make self-enforcing.”
Someone contributing to Wikipedia’s entry on blockchain cherry-picked an overview of the excitement from one of those recent Harvard Business Review articles:
With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.
Obvious question: Could that immense potential expand to include anything in or about physics, science generally, engineering, scientific publishing, or technoscientific data management?
Steven T. Corneliussen is Physics Today’s media analyst. He has published op-eds in the Washington Post and other newspapers, has written for NASA’s history program, and was a science writer at a particle-accelerator laboratory.
