Next Generation Blockchain Applications Go Well Beyond Bitcoin

The technology behind cryptocurrency can be so much more than that.

Bitcoin is a mirror that reflects your attitudes about change. Maybe you see it as a Ponzi-scheme/gun club. Maybe you see it as a free market savior. Either way, it’s easy to miss the root structure for the trees. The true wonder behind bitcoin is the public ledger that supports the system, the blockchain. The blockchain is a record kept by an impartial bookkeeper who only knows how to add new entries. The chronological order and identities aren’t public — that’s where the crypto part comes from — but the record of exchange is. And this technology is probably far more significant than bitcoin itself, even if it often has to settle for a supporting role in the grander narrative.

These are the ways in which blockchain will show up in the lives of not bitcoiners.

Bank Security

A blockchain-like system could be used to bump up the security of transactions between customers and traditional financial institutions, argues Standard Chartered Bank’s Chief Innovation Officer Anju Patwardhan. “With the use of blockchain technology, each leg of the transaction can be recorded and traced, making the ultimate destination and use of the funds clearer,” she recently wrote on Linkedin. “This means combating financial crime such as money laundering also becomes easier.”

That banks want to get in on the blockchain isn’t just idle speculation. In September, Bloomberg reported that banking shai-huluds Barclays and JPMorgan were eying the blockchain as a way to consolidate transactions into one secure system. This would definitely hurt Blockchain’s street cred, but it might provide some reassurance about information security.

Secure digital voting

The greatest barrier to getting electoral processes online, according to its detractors, is security. Using blockchain, a voter could check that her or his vote was successfully transmitted while remaining anonymous to the rest of the world. In 2014, Liberal Alliance, a political party in Denmark, became the first organization to use blockchain to vote. With American voter turnout still shockingly low, distributed digital voting may represent a way to enfranchise non-participants.

Patent protection without the public patent

Proof of Existence is a service that, for a small bitcoin fee, offers a blockchain-based proof that you, in fact, owned a document at a specific time. If you wanted to have retroactive evidence of an idea you created, you could point to the blockchain to show it was yours first. That’s not how patents work today, of course, but it’s easy to see how Google or Microsoft might want to keep a technology tucked out of the public eye while still making an effort to stake a claim. Companies and individuals should be able to keep track of their progress without helping their rivals. Giving them the chance to do research in solitude could lead to more innovation (and hurt China’s knockoff factories).

Revamping the entire online experience

Ethereum, a foundation in Switzerland, wants to see open and decentralized technology everywhere. Vitalik Buterin, who invented the underpinning Ethereum protocol, believes it could be used for “smart contracts, computational resource marketplaces, financial experimentation, decentralized governance.” The Economist walks that scenario through its admittedly science-fictional conclusion: Once computers start enforcing contracts, robot businesses follow and start using profits to self-upgrade.