Blockchain Is Coming Down Your Street

You probably have heard of blockchain. Or have heard of the “first use” case of that technology: Bitcoin, the first of multitudinous new cryptocurrencies. They have been in the headlines because like virtually all financial markets, except the dollar, the cryptos are tanking, right now.

Cryptos and blockchain are wrongly conflated as one.

I am not going to do any unusual thing, here. I will bracket the cryptos as a separate, major topic and focus here on blockchain technology generically. Because the “first use” case (a kind of jargon in the field) was cryptocurrency, back in 2008, cryptos and blockchain are wrongly conflated as one. But in just over a decade, blockchain has swept fields from healthcare to cannabis to wine sales to human genome research.

One of my roles is as chief writer for the Blockchain Healthcare Review, writing dozens of “business reviews” about enterprises worldwide that are rooted in blockchain technology.

Blockchain intrigues me as both a technology and a philosophical application. I have not entirely reached a conclusion about the validity of the claims made for it—but its applications seem impressive.

What is blockchain? Not a simple question.

What is blockchain? Not a simple question.

It is a database, most often described as a “distributed ledger.” This means that it is a record of transactions among many individuals and businesses, but there is no “authority,” no central monitor, recording and verifying those transactions. A bank verifies all transactions among customers: businesses and individuals, payors and payees, depositors and the bank, investors and their accounts. The bank keeps the ledger and is relied upon for honesty and accuracy; it mediates and decides disputes about transactions.

The blockchain’s distributed ledger, a platform (site) on the internet, has no central authority. All those admitted to a blockchain ecosystem enter records of their transactions, have access to the record of all transactions related to them (“transparency”), and rely on transparency for the true record. Each blockchain does have a system based on its own members for deciding when a given stretch of data is complete and verifying it. At that point, the data is encrypted into a “block” and linked into the blockchain.

The encrypted data in the block is immutable, unchangeable.

The encrypted data in the block is immutable, unchangeable. A hashtag for each block will alert all members of the blockchain if any attempt at a change is made. In other words: responsibility for the accuracy of the record is not centralized, it is “distributed” among all users.

If it turns out there is an error in a block, it will not be changed. In a subsequent block, a “correction” can be entered—exactly as when a newspaper makes an error the “correction” is a separate item. One cannot go back and change the newspaper with the error.

The first applications of blockchain after the cryptocurrencies seem to have been financial, healthcare, the human genome, and cannabis. There are many, many others.

In healthcare, the worst perceived problem was medical records. Each doctor’s office, clinic, hospital, pharmacy, nursing home, insurance company, and other participant kept records of patient visits. But sharing records was problematic. There was very little “interoperability” among healthcare providers. Government regulations made it a major legal risk to share patient records because of laws regulating patient privacy and confidentiality. Participants tended to hoard their own data.

Thus, a patient could walk into a new healthcare facility that had no access to that patient’s record elsewhere of tests, procedures, drugs, allergies, and so forth. In an emergency, the required information might not be available. And so, tests had to be repeated, patients interviewed again—even in an emergency. Care was compromised by limited information.

Blockchain has swept this field. On blockchain, every healthcare provider can add data to a patient’s record. There is one locus of all patient’s information. Yet, patient privacy and confidentiality are protected because an essential feature of blockchain is “permissioned access.” The patient has access to his record and the patient alone can permit access to his or her record for any given provider—a doctor, clinic, hospital. Thus, the single record of the patient’s health history is entered into the blockchain and access to it is entirely controlled by the patient.

The cannabis industry quickly seized upon blockchain technology because central authorities shunned the industry. In the United States, the states decided to make medical and recreational use of cannabis legal, but the industry remains illegal on the federal level.

As a result, most banks are prohibited from dealing with the burgeoning cannabis industry because on the federal level it is illegal. Blockchain stepped into the gap, with its distributed ledger of all transactions among marijuana growers, distributors, retailers, consumers, and state regulatory agencies.

In this case, new cryptocurrencies loomed large. Any transaction on the blockchain used a new cryptocurrency, tradable on crypto exchanges for dollars or other currencies. Every single transaction anywhere in the system became an immutable record, transparent to all relevant players. Blockchain, in effect, solved the banking problem of the cannabis industry trapped between state approval and a federal ban. More recent blockchain initiatives focus on verifying the cannabis supply chain from breeder of new strains to growers to distributers to testing labs to retail outlet to consumers. The purchasers of an edible cannabis project, say, now can verify the strain, the lab results, the THC content, and so forth.

In the field of the human genome and genome research, blockchain “disrupted” (a complimentary term) a field where there was no standardized value of an individual’s genome data—although certain genome analysis sites sold this data to researchers desperate for the broad population data needed for DNA research. But what about the individual? Blockchain offered an answer.

Blockchain systems permitted an individual to submit a blood sample so his or her DNA could be analyzed. Entered in the blockchain record, an individual’s data was private. Access was only by permission and the individual decided whether to sell the data for research.

As I have written articles for the Blockchain Healthcare Review, reporting dozens of “use cases, I have asked myself if blockchain technology is an expression of (1) the principle of individual responsibility, (2) the principle of individuals freely transacting business on the basis of verification, not trust, (3) the locus of control of information, an increasingly valuable commodity, and (4) dispensing with the assumed need for a centralized authority to verify our transactions.

It is early times. What I view as the blockchain revolution is at most just 14 years old. Use of the technology is constrained by no patent; the inventor of the blockchain, under a pseudonym is still not known.

Can a technology express a philosophy?

Can a technology express a philosophy? The automobile empowered every individual to travel individually and efficiently, in privacy (so, of course, did the horse) and changed the world. The telegraph and then the telephone for the first time in history meant that transportation and communication no longer were synonymous (with such trivial exceptions as smoke signals and signal fires).

The internet is by no means unambiguous in its philosophical implications. It empowers the individual in communicating ideas—or else the mainstream media would not be lambasting the social media like Facebook for permitting unapproved, unreviewed opinions. You know—“fake news”! SO much not like the New York Times!

The concept of blockchain is to give individuals a way of conducting their affairs independent of a central authority. The foundations are objectivity, transparency, verifiability, and immutability.

There is no superior guarantee of individual autonomy. A question we might ask is if technology tends to advance individual autonomy or advance government control. The earliest literature on this issue came down on the side of technology as an instrument of dictatorship (1984, Brave New World, This Perfect Day).

That early literature almost certainly got it wrong. At least in semi-free societies, the market for technology is the public at large. Dictatorships like communist China face an impossible dilemma about technology that increases productivity and government control, and technology that gives individuals access to information not censored by government. I am aware of no blockchain enterprise in Russia or communist China.

In fact, in general no government has access to blockchain transactions, although in some cases government (for example, regulators) can become part of the blockchain ecosystem. I wonder how long before governments comprehend that blockchain technology is the bastion of information private to everyone—and enact regulations?

As a tribute to the blockchain concept, tell me what you think.

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About the Author: Walter Donway

Walter Donway has written and edited for Savvy Street since its inception in 2014. His essays and interpretative commentaries on breakthrough books have dealt with philosophy, politics, literature, science, history, psychology, and personalities. His new novel, "Retaking College Hill,” became Amazon’s #1 bestseller in political fiction. This year, the Atlas Society published his Pocket Guide to The Fountainhead and Romanticism Reborn--essays on the Romantic movement in literature and its 20th Century revival in Ayn Rand's novels. His collections of essays and short stories and his "Collected Poems" are available on Amazon. He lives in East Hampton with his wife, Robin.