Home >Opinion >Columns >The hammer of blockchain is on the lookout for ever newer nails

I may have mentioned this before: My favourite tweet on Blockchain is: “Blockchain is the answer, now tell me the question?" Fuelled by the incessant hype around Bitcoin and cryptocurrency, blockchain has been regarded as a silver-bullet solution for everything—hacking, threats to democracy, poverty and world hunger. There is no doubt that it is a fundamental new digital technology, which, along with artificial intelligence (AI), will shape the world to come. However, unlike AI, which appears to be solving big problems, blockchain has seemed like a hammer looking around for nails.

Over the past few weeks, we have seen new nails swiftly emerge out of the woodwork. Blockchain is widely known to be the technology behind Bitcoin. But that is akin to describing the internet as the technology behind email. The internet is much more than that. A blockchain is a distributed database shared among a network of computers, all of which must approve a transaction before it can be recorded. In essence, it is a universal ledger of digital records. It can only be updated by the consensus of a majority of participants, and an entry can be traced back to its origin. Once entered, this information can never be erased. It is these properties of consensus, provenance and immutability that make this technology unique.

Last week, the venerable auction house Christie’s sold a digital artwork in form of a jpeg file, by the artist Beeple, for $69 million. A week before that, Canadian artist Grimes auctioned $6 million worth of ‘digital art’ the same way. Jack Dorsey, the founder of Twitter, is auctioning the first tweet ever “just setting up my twttr" for about $2.5 million. All of these are purely digital, and instantly replicable. You can go and find Jack’s first tweet or take as many copies of Beeple’s work as you want. However, irrespective of how many copies you take, only one person owns this piece of art or music or tweet. Such goods are called NFTs, or non-fungible tokens, and each one is a blockchain entry (usually in the Ethereum Blockchain) that represents a unique item that cannot be interchanged with another. Because of the properties of the blockchain, this ownership is immutable until further sold. It is like a Van Gogh painting. Only one person can own the original, though you can take as many prints as you like. These blockchain-powered NFTs have opened a big market for art, artists and collectors to monetize their creativity.

On 8 March, millions of transactions got hit in India as one-time passwords (OTPs) stopped pinging on people’s mobile phones. It was estimated that nearly 400 million of India’s billion daily OTPs did not materialize, hitting e-commerce, bank and even vaccination transactions. The reason: A new ‘SMS scrubber’ was launched as part of an effort to weed out spam messages. While it did not work and had to be withdrawn, it surely will once the bugs are ironed out. The scrubber, notably, is structured on a blockchain platform. Another nail found.

As covid slowed the world but accelerated change, much education was digitally delivered, fuelling an ed-tech boom. Digital education require digital degrees, and these need to be unique, secure and immutable. If one can tokenize art and music, so also educational degrees. Universities worldwide have started experimenting with ‘blockchain degrees’. The same principle applies to healthcare, perhaps the industry du jour in covid times. At no other time has there has been a greater need for universal electronic medical records. Health records on blockchain have been the holy grail, with the security, transparency, privacy benefits that it brings, but this has been excruciatingly difficult to do. The hope is that a crisis like covid will incentivize country-level administrations to go for it (say, a health stack or health ID card), and global initiatives, too, in recognition of the fact that a pandemic knows no boundaries. Some countries will soon issue vaccine certificates, and as we need secure, non-duplicable globally-accepted passes, blockchain could be the answer.

All this digital and blockchain activity has been rocket fuel for the biggest and most universal use case of blockchain, cryptocurrency in general and Bitcoin in particular. This ‘tokenised money’ has rocketed off the charts, driven by frenzied trading. It has been the lone nail so far, seen by some as the last nail in the coffin of conventional money. However, as we emerge from the covid pandemic, expect to see blockchain technology go beyond cryptos, just as the internet has gone far beyond email.

Jaspreet Bindra is the author of ‘The Tech Whisperer’, and founder of Digital Matters

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