The dark web, tech bubbles, ransomware. If you’ve heard of Bitcoin, it’s probably in the context of something nefarious, or at least head-scratching. But the underlying technical component known as blockchain could alter how we securely share information. The problem? Convincing investors and legislators that blockchain’s the next big thing, rather than a shady sideshow.
Despite the hangover from last year’s Bitcoin mania, blockchain investments are roaring ahead. By early February, investors had already funneled $72 billion into the technology. And in March, a group of Northwest tech companies, from Microsoft and T-Mobile to smaller startups, formed the Cascadia Blockchain Council—one of the latest organizations of its kind in the U.S.—to advocate for the area’s growing industry.
"Legislators are convinced that blockchain is Bitcoin and Bitcoin is weaponry and sex trafficking [and] therefore...needs to be regulated immediately. [We] want to combine our influence to help educate [people].” —Michael Schutzler, CEO, Washington Technology Industry Association
What’s the Advantage?
Every node in the network tracks the location of products in real time. There’s no central authority, like a bank, that can make mistakes, and any single product can be traced through the entire supply chain—potentially allowing a company to track the spread of, say, E. coli.
Here’s the Issue:
Anything that’s stored online, from a dollar to the location of a head of lettuce, can be duplicated—up in the cloud, it’s just a string of numbers. Blockchain protects that information in the virtual sky.
The Life Cycle of a Blockchain
- A warehouse has a head of iceberg lettuce with an attached bar code.
When it sends that produce to a distribution center, it attempts to record that information in a shared ledger.
All other nodes with access to the shared ledger confirm that the attempted transaction is valid.
The distribution center receives the lettuce, and the transaction is added to the shared ledger, to be used to verify future transactions.
Blockchain Investments in the U.S.
Cryptocurrency: Uses a digital token, like a Bitcoin, to denote value. All transactions are recorded in a blockchain.
Blockchain: Technology for transferring digital information—medical records, cryptocurrency—that uses a shared ledger to ensure honest transactions.
Shared ledger: A public record of transfers that tracks ownership of virtual assets (to make sure tokens haven’t been doubly spent or private data stolen).
In the Clouds
Blockchain requires lots of virtual memory, or cloud space, since users should be able to see the ledger and confirm transactions at once. Microsoft, Amazon, and Google are locked in a struggle over the cloud market, and are likely to compete to provide blockchain services to customers.
In the Senate
In early 2019, Washington blockchain companies successfully pushed for a state bill that recognized blockchain as a legitimate record-keeping technology. As of April, it’s law.