Phoenix-based expert breaks down blockchain technology
PHOENIX — With the recent emergence of the digital currency Bitcoin, more discussion has been raised around the technology behind it: Blockchain technology.
In the simplest terms, blockchain technology allows digital information to be distributed but not copied. It is essentially an open, decentralized database of any transaction involving value: Money, property or even votes.
It was originally devised for Bitcoin, but the tech community is starting to find other uses for the technology.
Scott Nelson, the CEO of the Phoenix-based global block chain alliance Sweetbridge, said blockchain technology will be “bigger than the internet.”
Nelson said describing the technology is like “describing a computer, so you don’t what to talk about what it is, you want to talk about it enables.”
What blockchain enables, basically, is a group of people who do not trust one another to share information that cannot be changed or altered by any of them, Nelson said.
“We use something called cryptography,” he added, describing it like “very complicated math algorithms that protect [that] information.”
Nelson said blockchain technology could bring sweeping changes to the way we transfer, keep and secure records and valuable information.
“Regulatory agencies, banks, title companies,” he said. “All these things are going to be radically changed as a result of the blockchain.”
This could mean that information would be unchangeable and unhackable and could be used to secure voting records, medical records and personal information, such as social security numbers.
Nelson said there are two types of blockchains: Public and private chains. The public chains run on thousands of machines across the globe that are all digitally linked, hence the term blockchain.
He added that public chains are nearly impossible to hack because the hacker would have to find a way to change all of those thousands of machines in order to access that information, and there is not enough computing power to do it.
In addition, the information could not be changed because all of the other computers would recognize the change and kick that computer out of the chain.
“Everything we’ve done now with hacking has been protecting the machine,” he said. “The whole philosophy [with blockchain] is open it all up, make it public, put it out there and instead protect the data on the machine.”
Nelson said blockchain technology is already a massive business and many people do not know about it — and far less understand it.
The technology “is already being used to trace diamonds from the diamond mine all the way through the entire supply chain till it ends up on the ring to verify that it didn’t come from a conflict diamond source,” he added.
Other industries that are using blockchain technology include the fashion industry to make sure they are not buying knock offs, the agriculture industry to prevent foodborne illness and the growing success of Bitcoin.
Nelson said the technology is so big that the “processing power for blockchain computing systems is 10 times greater than all of the processing power used by the Fortune 500 companies.”
He added that the problem is that most people do not understand what blockchain technology is because, just like the beginning years of the internet, the technology is still complex for many to understand.
While countries including Russia and China are embracing the technology, many U.S. legislators are falling behind, Nelson claimed.
Nelson said by not embracing the technology, the U.S. could eventually be wiped out economically.