Last night I had the pleasure of attending my first ACS forum “The Evolution of Blockchain” inside the stunning architecture of the SAHMRI building in Adelaide, co-hosted with Adelaide Blockchain. The event featured Associate Professor Vincent Gramoli and a panel of Blockchain thought leaders both from the public and private sector, moderated by Barbara Vrettos from Adelaide Blockchain.
Firstly, what is a blockchain?
Blockchain is commonly referred to as a “distributed ledger” and is basically a chain of blocks (who would have thought?!). Blocks contain digital information and each block relies on the one before it. In the case of Bitcoin, which was the first mainstream use of this technology, each block contains a series of transactions during a defined time-frame. All of the blocks together constitute the Bitcoin blockchain, and witness all of the transactions created since its inception. The blockchain is a network of computers across the world, meaning it’s de-centralised, computers communicate with each other without the use of a central server (think peer to peer like torrenting). This removes the need for companies like Visa, Amazon or Uber to process your payment and guarantees no single entity controls the data.
Australia is at the forefront of this technology, and blockchain has the potential to be the biggest thing since the internet itself, it really is that much of a game changer when it comes to the exchange of digital assets. The Australian Stock Exchange (ASX) has even committed to replacing its current CHESS system for stock transactions with blockchain by 2021. One of the panelists, Mike Scott (CEO – Nona Digital), made the statement that he “didn’t believe his children would ever need to walk into a bank or even have a bank account in their lives, let alone experience a 3-5 day delay on money transfers”.
One of the topics I found really interesting was that of our digital identity, and how blockchain will allow us to restrict the sharing of our information to specific institutions. This could prevent public cloud companies like Facebook, Google & Amazon sharing your information with anyone, something that has made them the most valuable companies and produced the richest people on the planet!
The ACS whitepaper “Blockchain Challenges for Australia” released at the event last night identifies 4 key issues;
There is no agreed performance criteria for blockchain yet, and as the number of participants increases the amount of energy and storage consumed is an issue with the technology as it stands. The Bitcoin network currently consumes 430KWh of energy to commit one ‘block’, that’s enough to power 29 Aussie households per day!
Blockchain uses a distributed ledger for transactions instead of a central trusted authority like a bank. Unfortunately, one of the down sides of this is that there isn’t currently any accountability when it comes to securing transactions across most existing blockchains.
There’s no current legal, policy and ethical framework for blockchain, so compliance with legislations in Australia like the anti-money-laundering and counter-terrorism financing process isn’t possible at the moment.
Education & Employment
There’s currently a shortage of supply of experienced blockchain expertise, and non-accredited individuals are fulfilling specific roles. Investment in tertiary education will be necessary, but this requires enough academics skilled in the technology so they can educate related professionals.
Although blockchain technology has been around for about 10 years now, it still has a long way to go before it reaches any maturity. User adoption has been slow thus far and the technology is still very difficult to develop applications for. Maybe the younger generation will be the ones who drive this into mainstream use, users of games like Fortnite or World of Warcraft are already very familiar with purchasing and using digital assets within these platforms.
Will blockchain replace the entire concept of money as we know it across the world? Will we be voting for governments via blockchain to ensure elections are completely fair? Will the “cloud” as we know it move to this technology so that it does not rely on centralised data storage? Time will tell, but it’s certainly an exciting technology and one I’ll be watching very closely.
*Statistics and data sourced from “Blockchain Challenges for Australia, an ACS Technical Whitepaper May 2019*