TECH4GOOD
Monchito Ibrahim
A lot has been said and written about how the application of blockchain technology is beginning to make inroads today in every aspect of society like in business, education, and government. From something that came out of a white paper written by somebody whose true identity has never been verified or revealed up to today, the technology has definitely provided much promise as well as caused many intrigues. Most probably caused by the controversies related to its more famous derivative, the bitcoin. However, many people, including this author, believe blockchain is the future.
We are beginning to see a lot of activities related to blockchain in the country today. Last week, the DICT organized its first Global Blockchain Summit in Balanga City, Bataan. I understand it was well attended with experts talking about the need to cultivate a Philippine blockchain ecosystem that will help drive the development of innovations using the technology. Another big blockchain event, the Philippine Blockchain Week happening in the last week of November, also promises to become a great platform to showcase exciting developments in the use of blockchain. There will be conversations related to the Metaverse (a future topic in Tech4GOOD), financial technology, blockchain-related startups, and non-fungible tokens or NFTs. We are also beginning to see local startups coming out with blockchain-based products intended to help improve the way we do things today.
Blockchain technology was developed to solve a fundamental problem that prevented the adoption of cryptocurrency – double spending. Unlike paper money, cryptocurrency could be duplicated. The concept was introduced, in a paper in 2008, by a guy named Satoshi Nakamoto. Many believe though that the name is a pseudonym for a person or group who helped develop the first bitcoin software. Nakamoto solved the problem by creating a blockchain system of verification.
What is a blockchain? A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the network of peer-to-peer (no server) computer systems on the chain. The resulting decentralized database of transactions managed by multiple participants is what is now known to be Distributed Ledger Technology (DLT). Each block in the chain contains several transactions with the same immutable cryptographic signature called a hash. Every time a new transaction occurs on the blockchain, a record of that transaction with a new hash is added to every participant’s ledger. The number of participants in a blockchain can run into thousands which makes cheating and hacking the system very difficult because every change will be seen and will have to be authenticated by a sheer number of participants. If hackers would attempt to corrupt a blockchain system, they would have to change every block in the chain. Besides, every attempt to change the record would result in a new hash that will trigger an alarm in the whole network.
The Web 3.0 revolution will be enabled by a single piece of technology – blockchain. In this third iteration of the internet, end users will directly manage, own, and control their data, and that data will be used and managed outside of the control of the web applications like Facebook or of a single company. They will just become consumers of the information. Data and information will be stored in a distributed blockchain and will be made available across the internet equally, and not controlled by any central entity. When data is sourced, referenceable, and uncensored, it should result in a more authoritative and trusted internet.
We do not have to wait for Web 3.0 to happen. Today, we are seeing a lot of exciting applications of blockchain technology. Some governments have used blockchain-based applications for social-aid distribution where transparency and traceability, and simplified means of identifying and verifying qualified recipients are very important. In the pharmaceutical supply chain, digital trust infrastructure, backed by blockchain, enables participants to authenticate medicines and take more proactive actions to prevent shortages.
According to a recent World Economic Forum article, blockchain can help the government by increasing the fairness and efficiency of systems, improving transparency and disclosure of procurement processes, and reducing opportunities for corruption. Many governments have begun to use blockchain-based property and land registry systems to protect the integrity of titles and streamline lengthy processes.
The impact brought about by Satoshi Nakamoto or his group’s idea is beginning to revolutionize many aspects of modern life. Bitcoin may not be there in the future but the blockchain technology that Nakamoto came up with to solve a cryptocurrency problem and the advancements we are just beginning to see today are likely to be with us for a long time. According to a recent MIT article, the real beauty of blockchain lies in the fact that it was created to manage digital scarcity and keep track of a process within a community of participants who may not know, trust, or even interact with one another.
(The author is the lead convenor of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics Association of the Philippines, and vice president, of the UP System Information Technology Foundation.)