Singapore’s Prime Minister Lee Hsien Loong recently shared an article on his personal Facebook page regarding blockchain. In the post, he mentioned the Monetary Authority of Singapore testing possibilities with blockchain, and working on the possible potentials that blockchains can offer. The following is the article from BBC, posted by PM Lee.
The Long Island Iced Tea Company, as its name suggests, was in the business of selling beverages. And not as many as it might have liked: it lost nearly $4m (£3.2m) in the third quarter of 2017.
Then the company announced that it would henceforth be known as the Long Blockchain Corporation. Would it stop selling beverages? No. Would it sell beverages using blockchain? Maybe. It would do something to do with blockchain. Maybe. Probably.
Blockchain is the technology which underpins Bitcoin and other digital currencies. It is a database of financial transactions which is saved on multiple computers and which constantly grows as new transactions or “blocks” are added to it, forming a continuous and public chain of data.
Blockchain may still be in its infancy, but venture capitalists are already pouring billions into start-ups with more clearly defined plans than the Long Island Iced Tea Company’s. Even Facebook is getting involved.
And billions more are being raised in the regulatory grey area of initial coin offerings, where companies raise money by selling digital currency to investors.
In 2008, someone using the pseudonym Satoshi Nakamoto proposed a new kind of money: Bitcoin. Transactions would be verified not by a trusted third party like a bank or credit card provider, but by a network of computers solving cryptographic puzzles.
And as long as enough people chipped in computing power to check the solution, nobody would be able to fake the records or carry out fraudulent transactions. And individuals were incentivised to donate that power by the promise of Bitcoin rewards.
It was ingenious. And people soon wondered whether blockchain, the technology making all this possible, could do more. It offered a completely new way for strangers to collaborate without needing to trust a centralised authority.
In theory, blockchain could help lower the costs of verifying transactions and creating new markets, whenever we trust a person or company to manage our information in ways which help us interact with each other.
Others are working on blockchains to track goods through supply chains, or intellectual property in the digital world; to make contracts quicker to administer, or voting systems more secure. You name it, somebody somewhere will be trying to put it on a blockchain.
Bitcoin, for example, chugs through three or four transactions a second. Visa averages 1,600. To validate these transactions, the computers solving Bitcoin’s cryptographic puzzles consume, by one estimate, about as much electricity as Ireland.
One of Bitcoin’s attractions is that your wallet is not linked to your real identity – especially if you are using it to purchase dodgy stuff. But if we want to use blockchains to store medical records, we have to be certain that they cannot get attached to the wrong patient.
In removing the need for intermediaries, blockchains may sometimes remind us why their services can be worth paying for.
Intermediaries can fix mistakes. Your bank can send a replacement internet banking login. Lose the passcode to your Bitcoin wallet, and you can kiss your currency goodbye.
They can also resolve disputes. How best to do that with blockchain “smart contracts” is most kindly described as an evolving conversation.
And trust in an intermediary has to be replaced by trust in other things – that software is reliable, and that incentive structures will not break down in unexpected circumstances.