Blockchain technology beyond cryptocurrency and bitcoin

Blockchain technology beyond cryptocurrency and bitcoin

  • Technology
  • July 7, 2022
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  • 12 minutes read

California consumers face the pinnacle of a

California consumers are facing the pinnacle of a “decade of blockchain,” say some industry leaders; but relying on emerging technology poses challenges for consumers.

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Blockchain entrepreneurs, the digital registration technology that strengthens bitcoin and other virtual currencies, say consumers are on the cusp of a new “decade of blockchain.”

The 2030s will be that decade, said San Diego Blockchain CEO Brian Foote, where “many things we do will have blockchain behind them,” including car purchases and home mortgages, as well as how we store and we bring the bank, the driver’s license. and insurance information.

Blockchain technology already has a working start that supports everything from digital mobile wallets and non-consumable tokens, or NFT, to online games and other digital entertainment, to billions of cryptocurrency transactions recorded in its ledgers. .

California, one of the world’s leading economies, is considering how to lead the cultivation, regulation, and adoption of still-emerging technology.

But what is blockchain and why should it matter to consumers?

Blockchain began and is commonly described as an encrypted public digital record that records virtual currency transactions and stores this information. Cryptocurrency transactions, for example, are verified by users or “miners” who then solve complex algorithms to validate transactions.

Camille Crittenden, former chair of the California Blockchain Working Group, is the executive director of CITRIS and the Banatao Institute. Courtesy of Camille Crittenden

Camille Crittenden, former chair of the California Blockchain Working Group, whose members were commissioned by state leaders to assess the risks, benefits, and legal implications of state agencies’ use of blockchain technology, define blockchain more clearly.

“It’s a cryptographically secure distributed database of records,” Crittenden said. “The other distinguishing feature is that it’s immutable … You can’t go back and delete records. So there’s always a permanent record of transactions in the blockchain.”

What is a blockchain?

Transactions form the storage units or “blocks” in the encrypted database known as a blockchain. These blogs form links to the chain and a transaction history that all network users can see. Any change or manipulation of the information contained in these blocks will break the chain and alert the network and its members.

Foote, CEO of San Diego-based blockchain services company Humbl, compares technology to minutes of cell phone or megabytes of data that store a user’s information, adding new blocks as they runs out of storage for previous blocks.

“Digital registration technology allows you to (make transactions) in a ‘untrusted’ way, meaning users don’t have to rely on a third-party intermediary to complete the transaction,” said Bruce Rafael, Tauron Digital’s portfolio manager. , based in the Bay Area Asset Fund.

The prospect of eliminating third-party intermediaries from banking and other financial transactions, known in the crypto world as decentralized financing or “DeFi,” has been a key selling point of blockchain technology.

Foote spoke about it in a recent San Diego television interview.

Consumers, Foote said, are “tenants of their data on the web. Rely on brokers, middlemen and middlemen to perform simple functions in your daily life.

Foote said the decentralized nature of blockchain technologies allows its users to do business directly. This outlook has become more appealing to consumers during a pandemic that has drastically changed the way we shop, work and do business, he said.

Eliminating skepticism

Both Foote and Rafael have had a front row seat for blockchain evolution from the cryptocurrency chassis to the key piece for a variety of other services.

Blockchain technology groups Humbl’s offerings from mobile wallets (digital ways to store credit, debit, and identity cards that allow users to shop with smart mobile devices) to storing medical records and providing secure credentials. for government agencies.

Rafael, whose company manages digital assets for investors, points to the role of the blockchain in facilitating untrusted smart contracts: self-executive contracts stored as programs in the blockchain that s ‘run automatically once the conditions of each part are met.

It is in spaces like these where Crittenden, the former chair of the state’s blockchain working group, predicts the future of technology, while acknowledging the skepticism surrounding technology because of its links to the value of collapse of cryptocurrency and recent high-profile blockchain-related security breaches.

The 2020 report of its working group recommended blockchain pilot programs to the California Department of Motor Vehicles to create digital portfolios for driver identifications and erect secure blockchain platforms to share driver records across states; to the state Department of Food and Agriculture to more quickly locate sources of food-borne contamination and expedite safety withdrawals; and increase accessibility and storage in state archives.

“I think the blockchain has been associated with cryptocurrency, so there’s probably a lot of skepticism about using a fundamental system like this in a scenario that’s associated with the type of financial markets. speculative and where the value is so volatile, ”Crittenden said. “But I think it has opportunities only to improve the reliability and transparency of log storage, especially when there is a possible lack of trust between partners.”

Observers in the crypto industry are also thinking about how Californians will adapt and adapt to a blockchain environment. Christine Parlor, a researcher at the University of California, Berkeley, is an expert in digital economics, decentralized finance and blockchain.

“In general, we think that consumers adopt products that improve their lives. Given our generally high standard of living, there are no obvious use cases for consumers here as there are in other countries, “Parlor said.” That said, one of the benefits of the blockchain will be to make it our processes are more streamlined and cheaper – consider signing stacks of documents to buy a home. Making these processes easier, faster and cheaper will make everyone better. “

Parlor says consumer regulations such as those directed by California Gov. Gavin Newsom in his May executive order on the cryptographic industry and the blockchain could reassure uncertain users.

“Regulatory uncertainty is one of the reasons some consumers are unsure of entering the cryptographic realm,” Parlor said. “Clearly described consumer protections or ‘caveat emptor’ signs will let everyone know where they are, reduce uncertainty and encourage adoption.”

Digital asset manager Rafael says that while it is in non-expendable tokens (owner-transferable digital financial securities stored in the blockchain), where blockchain technology will gain strength in the marketplace.

“In blockchain, where the rubber will meet the road is with NFT,” Rafael said. “I would keep my eyes fixed on NFT space.”

Rafael sees academic credentials and other credentials minted and shipped as NFT for portable storage and easy access for users to mobile wallets. These digital documents could then be “whitelisted”: the process of allowing access to this information to pre-approved programs, Internet protocols, or e-mail addresses.

But it’s in games and entertainment where Rafael sees the massive adoption of blockchain-enabled goods and services, from NFT for concert tickets and music releases to tokenized blockchain video games.

“That’s where the mass adoption will come from,” Rafael said. “We will see more adoption from the entertainment side.

But getting to the “decade of the blockchain” will take time, Rafael said.

“We need to get to the point where individuals are embracing technology at the retail level, where people are using blockchain outdoors and know that they are using blockchain,” he said. “Music, games: if this can be adopted, we will approach adoption at the end of the decade.”

Rafael talked about his “golden three” for market consumers: social adoption, entertainment adoption, and financial incentive.

“If you socially maintain your interest, entertainment options are part of it and there is money to be made,” Rafael said, “it will be very difficult to ignore.”

This story was originally published July 7, 2022 10:47 AM

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Darrell Smith is the Elk Grove reporter for Sacramento Bee. He joined The Bee in 2006 and previously worked for newspapers in Palm Springs, Colorado Springs and Marysville. Smith was born and raised at Beale Air Base, near Marysville, and lives in Elk Grove.

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