A few years ago, Bitcoin, the distributed digital currency, was the hottest thing to roll through the intersection of finance and technology. It gained significant interest amongst those keen to create a peer-to-peer, cashless currency.
That's too bad, because Bitcoin is really just one application of a much broader technology: the distributed ledger known as the blockchain. And fortunately, people are beginning to understand the blockchain as a phenomenon distinct from Bitcoin specifically and digital currency in general.
The blockchain's strength lies in how it decentralizes transactions of all sorts, allowing all kinds of digital assets to be safely and permanently exchanged. It also promises the potential to create records that can't be erased by attacking some central store of data. Because of the features, the blockchain possesses the potential to increase security and accountability in a range of industries.
Here are just a few new ways the blockchain is being used. Some may surprise you.
The Art Of The Blockchain
Digital artwork, which can include soundscapes, augmented reality, GIFs, and pixel art, is growing and diversifying as a medium. You can even buy recordings of brainwaves. Yet complications can arise when artists attempt to sell digital art—or even distinguish it as theirs. As Douglas Davis wrote in his 1991 essay "The Work Of Art In The Age of Digital Reproduction":
The fictions of "master" and "copy" are now so entwined with each other that it is impossible to say where one begins and the other ends.
Davis, sadly, passed away two years ago. But surely someone should attempt to write "The Work Of Art In The Age Of The Blockchain."
In Davis's era, the authenticity of digital art was difficult to verify. Was a file an "original" or one of an edition? In contrast to the conventions established in Walter Benjamin's age of "mechanical reproduction," what did those terms even mean?
Companies like Berlin's Ascribe and New York's Monegraph are using a blockchain to log each transfer of a work (just as a similar blockchain does for bitcoins), so art ownership at any time cannot be disputed. Digital art can be transferred, consigned, or loaned without losing attribution. The location of the work throughout the internet can also be recorded to document its history.
We won't begin to address the cultural issues that Benjamin and Davis's essays raise with respect to this use of technology, but they're interesting to think about, too.
Although legal in a handful of US states, marijuana's use, sale, and possession is still illegal under federal law. The buying and selling of marijuana is difficult to navigate for both retailers and consumers. It's primarily a cash-based industry, as banks fear prosecution for handling the funds.
While there are a number of bitcoin-based services like Potcoin, only recently has another option become available. Serica uses the blockchain to track and record every purchase of medical marijuana, and gives companies an easy way to accept payment online. The startup has already signed a deal with the second largest e-commerce site for medical cannabis to become its sole online payment option.
Music That's Off The Blockchain
In October, Ujo Music released a prototype service featuring a downloadable single by artist Imogen Heap. It was a practical example of how a blockchain-based music industry might function.
Creators and rights holders register works and their stakes in those works on the blockchain, and payments are delivered automatically and instantly using smart contract technology. Artists may also publish policies for how their music may be used, facilitating an open marketplace in which anybody can innovate a new business model, app or service as long as they meet the terms of those policies.
Currently, payments can be only made via bitcoin but credit-card support is on the way. Beyond its initial announcement, the people behind the Ujo project have been rather quiet.
Ad-free streaming service and marketplace Peertracks is still in the early stages but is attracting interest. PeerTracks allows tipping, patronage-style support, and even the buying and trading of limited-edition, tradable VIP passes for artists, using blockchain technology to track their transfer.
In this instance, the blockchain serves as a global database for copyrights, a means of payment for all music-related transactions. It also provides artists with transparent accounting, automatically split up royalty payments and the capability to create their Notes so they can get discovered and engage their fan bases. Fans can interact, participate and even benefit from the success of their favorite artists. Peertracks' beta launch is planned for the first quarter of 2016.
The Blockchain Shall Rule
In May last year, the Isle of Man began the first government-run blockchain project, using the blockchain to create a registry of digital-currency companies operating on the island. This was intended to stop money laundering, prevent terrorist financing, and aid international trade sanctions, as financial flows could be traced definitively to the specific individual involved.
“In the past, Honduras has struggled with land title fraud,” said Peter Kirby, Factom's president. “The country’s database was basically hacked. So bureaucrats could get in there and they could get themselves beachfront properties.”
Factom's system includes verified timestamps and provides a distributed mechanism to lock in data, making it independently auditable. However the project has not been completed in its expected time frame. Updates describe a project that's encountering political delays despite support from figures high up in the government.
Despite the obstacles in Honduras, Factom is continuing its work in land titles, currently working with BitSapphire on an anticorruption tool to manage the land municipal registry databases in Kosovo. They plan to use the Factom API to build a cryptographic record to prove the databases haven’t been corrupted.
Open Ledgers For Everyone
The Linux Foundation recently announced a new, collaborative Open Ledger project to advance blockchain technology, teaming with tech firms such as IBM and Intel, the London Stock Exchange Group and big banks such as JP Morgan, Wells Fargo, and State Street. Their aim is to advance blockchain technology and:
... develop an enterprise grade, open source distributed ledger framework and free developers to focus on building robust, industry-specific applications, platforms and hardware systems to support business transactions.
The collaboration is intended to create cross-industry open standards to transform business transactions. That banking and financial trading services have come on board demonstrates the appeal of the blockchain even to traditionally conservative industries.
The blockchain has not fully come into its full potential by any means. Most projects seem to be in early stages of beta testing and trials. Yet it's clear there are advances on an almost daily basis. It will be interesting to see the outcomes of the Open Ledger project and what the future holds for the blockchain, especially in newer applications like votingand healthcare. While the technology will progress quickly, it's not as clear that our political systems and everyday users will be able to keep up.
It won't be bits that hold back the blockhain, in other words. It will be us humans.