On 14 November, Connect’s 4IRC team hosted a high-energy, sold-out debate on the topic of “Blockchain: Hype or Revolution?” Topics ranged from crytocurrencies, to ICOs, to Ethereum’s failure, to privacy implications – and indeed, it turned into a rousing forum.
First up was host Emer Maguire, who took a vote – finding that most participants felt that blockchain was more “revolution” than “hype.” But would the audience opinion remain that way after hearing from the experts?
Emer introduced Seamus Cushley of PwC, director of blockchain and digital, and one of Belfast’s leading experts on blockchain.
"Blockchain is all about trust – at the human level"
Seamus began, "Let’s look at the evolution of trust, and how we establish trust as people.”
He talked about how communities exchanged goods and services on the basis of knowing a person. Currencies needed to replace values to build a mechanism for trade. With the decentralisation of the internet, now trust is what comes into question.
“Look at AirBnB – the essence and the purpose of their being is about the establishment of trust – that’s an example of how trust has come to be represented in this decentralised world.”
Seamus talked about what the innovation of blockchain entails – “For the first time we can replace third-party intermediaries with technology.”
Seamus said, “Decentralised is a critical word – Visa is a fantastic example of a centralised tech network. If Visa were to rebuild today, they would retain their governance but replace their traditional structure with decentralised blockchain technology.”
Seamus discussed the “The four broad lenses of blockchain”:
Seamus concluded: “What new business models does blockchain give us that didn’t previously exist? Critical infrastructure will be replaced by blockchain in healthcare, financial services, retail, etc. The ability to exchange trust at a micro level within a peer-to-peer community – that’s where you can build new business models that weren’t possible before.”
Blockchain and e-voting
The next speaker was Dr Patrick McCorry, a PhD researcher exploring blockchain applications in voting. Patrick is a Research Associate at UCL, hailing originally from Northern Ireland.
“E-voting over a blockchain: is this hype, revolution or iterative? E-voting should give me the ability to vote and verify that my vote was part of the tally. We’re looking at end-to-end voter verifiable systems - where two people request data from a web server – and both people should be able to check that the system hasn’t cheated them.”
“Can blockchain provide us with this consistency? – I think in theory, yes.
If you look at Ethereum you can see everything that’s happened in the past. We explored many avenues to test this theory.”
“There has been a lot of hype about using blockchain in public bulletin boards. For example, Follow my vote, Public vote, evox, TMX Group – there are a lot of startups in e-voting.”
He continued, “Can we use something like bitcoin? Bitcoin isn’t a great public bulletin board. Every transaction can only store 80 bytes of data – and it can only store data – it can’t enforce the correct execution of the voting protocol. Ethereum is like a global computer that everyone has access to – it can store programmes and run programmes. It’s a bit like the computer from the 1970s.”
Patrick talked a lot about authority and why it’s a central construct. He said, “Can we build a smart contract that can guarantee a voter’s privacy? There are a few ways of doing this – there’s something called the Tallying authority that can grant authority. But I wanted no one to have authority, to give it total privacy.”
“We experimented with how expensive is it to run a boardroom vote over blockchain. Each vote was about 80 cents, so for 40 people it cost $36. For a national scale election it would be way too expensive. My answer, right now, is no, we cannot use blockchain for a national election - because of scalability. At a rate of 864k transactions per day, 44m votes would take a month to process.”
Patrick continued, “Another technique we can use is permissioned blockchain – permissioned blockchain is controlled by an authority - where miners are appointed to maintain the blockchain. This can scale to handle millions of encrypted votes.”
However, it may still be expensive. Patrick’s final analysis:
“My conclusion for e-voting? I’d argue it only provides one small solution in a larger protocol. Is blockchain overhyped? It’s a complicated answer,” he said.
"Iota is supposed to be crypto but it went offline and it still went up 14% that day, so that means no one is looking at it. Ethereum wallets had $154 million in coins deleted today, and no one can get their coins. Parity built a really complicated wallet and this is the 2nd time it’s been broken.”
He went on, “On the other hand, IBM is using software that’s 40 years old. It’s a great opportunity to change software and start afresh.
Patrick made a final point: “WikiLeaks couldn’t get a bank account in 2011 and so they started taking their donations in bitcoin. Julian Assange tweeted to say they earned a 50,000% return on all the money donated to them in bitcoin – so it was good they weren’t allowed to get a bank account.”
Blockchain to track the genesis of a bottle of whiskey
The next speaker was Brendan Smyth from Arc-Net, who has 25 years experience developing software innovations, 15 of which were for large financial institutions. Now Brendan leads a blockchain startup creating food traceability, detailed in my previous article here.
Brendan said, “Blockchain is about trust, traceability and transparency. Arc-Net started 3 years ago – we’re not a blockchain company – we use it as part of our tech stack.”
Brendan discussed how supply chains have gotten a lot more complicated, and used the case of a “tiramisu in Sainsbury’s that had thousands of food miles in its ingredients.”
He said, “Food fraud accounts for $40bn globally. Here are some examples: manuka honey – fish fraud – counterfeit alcohol - fipronil contamination in eggs that ended up in a lot of processed foods.”
Brendan stated that, “More than £500 is spent annually per household in the UK on food that isn’t what it says it is.”
The solution? Brendan said, “Arc-Net can trace a bottle of whiskey from the barley in the fields to the bottle and label. We ID, track and trace food products – the platform gives immutability through the blockchain. It can scale from small producers to large.”
The event concluded with a lively panel debate. We'll publish a recap on the blog tomorrow. Watch this space....