We need to understand the serious social impact of blockchain.

Tim Berners-Lee, the inventor of the WEB, wanted it to be “universal, free, free and transparent”. After 28 years, Tim Berners-Lee himself admits that the technology “has not realized its full potential”, limited by three factors: misinformation, targeted advertising (commercial and political) and the opaque dominance of algorithms that abuse personal data.

The combined value of Google and Facebook is $3,800 billion, equivalent to the combined GDP of France and Italy. This hyper-concentration of financial resources and personal data poses a threat to competitiveness and our freedoms.

The Internet, in order to be more free, transparent, reliable and secure, must be less centralized. Everyone should be able to take control of their “digital destiny”. This is just one of the great promises of blockchain technology. But not only.

Initially pushing for decentralization and financial certainty

In 2021, according to the World Bank, $589 billion was transferred to low- and middle-income countries. Only for this flow, the amount of intermediation collected by banks is more than 37 billion dollars. An unbearable observation for many, and in particular for Satoshi Nakamo, the inventor of blockchain technology.

It was during the financial crisis of 2008 that he imagined the creation of the digital currency Bitcoin, which could guarantee peer-to-peer financial transactions based on a decentralized infrastructure, that is, without intermediaries.

To do this, it must invent an exchange technology that simultaneously guarantees disintermediation, trust, transparency, inclusiveness, and security. Blockchain technology was born. This is both a major technical achievement and a powerful technological thought that is revolutionizing the way we think about trusted third parties and how we think about governance.

By taking the time to understand the inner workings of this technology, we can understand how it fixes some of the excesses of the Internet, destabilizes many established practices, and offers us the potential for long-term transformation in many sectors.

Data exchange and recording technology

Blockchain is primarily a technology for exchanging and recording data. You have to imagine it as a Book, the pages of which are “blocks” and each line is a “transaction”. Blockchain is an original book with co-editors, co-authors, contributors and readers.

The co-authors are called “Nodes”: they guarantee the integrity of the Book, and each of them has an up-to-date version. The co-authors are called “Minors”: they write new pages of the Book, ensuring the authenticity of each line. Participants, for their part, propose new strings, i.e. transactions that they send to the blockchain network.

In January 2022, the public Bitcoin blockchain was simultaneously available on over 14,000 nodes. It had about 19 million blocks and brought together millions of “miners” who pooled their computing resources to contribute to the writing of this Book.

The strength of this technology is based on four principles:

Blocks of data form an immutable chain, the entire of which is backed up simultaneously and in real time on thousands of decentralized nodes. This distributed infrastructure makes the blockchain and its content immutable and fault-tolerant. All nodes would have to go down at the same time to make it unreachable.

The identity of all users is kept private, but the history of all transactions made since the first block is transparent and publicly available. Each registered user has a private key and a public key (cryptographically related). All user transactions are tied to the public key. The private key is accompanied by the right to perform transactions.

  • Cryptographic security

Blockchain includes a secure cryptographic system. Each added block is encrypted, as are all transactions contained in it. Moreover, like the pages of a book, each block is linked to the previous block. Thus, a hacker who wants to change the content of a transaction will not only have to successfully crack this block, but simultaneously all the blocks that precede it and all the blocks that follow it. By this principle of a cryptographic grid, the entered information is protected from unauthorized access.

  • Trust Decentralization

Blockchain has no central authority or trusted third party. Governance is distributed and operated through a number of actors involved and unified through a system of consensus accepted by all.

From the digitization of money to the digitization of trust

Since the days of Bitcoin in 2008, many public blockchains have emerged, such as Ethereum, Litecoin, Tezos, Binance, Cardano… There are also semi-private or private blockchains that are exclusive to a specific organization, as well as consortium blockchains that bring together several organizations. interested in cooperation and facilitating exchange between them.

Usage is proliferating in many sectors: finance, gaming, energy, sports, health, transportation, metaverse, art… And transactions between parties are rewarded not with legal tender, but with cryptocurrency.

To date, more than 9,500 cryptocurrencies have been mentioned. Their market capitalization exceeds $1,700 billion with a daily trading volume of around $80 billion. This paradigm is accelerating the emergence of players in traditional finance as well as de facto states in the race for regulation.

Just as Internet technologies have democratized and digitized information, the new technological era is digitizing economic value, but not limited to currency. Blockchain technology is essentially capable of digitizing any form of asset (called a token): a currency, a resource or access to a service, a copyright, a share of capital or real estate, a vote, an identity, a diploma. .. Their exchange naturally becomes transparent and efficient, drastically reducing the friction, slowdowns and costs associated with established intermediaries.

Introduced to the art market in 2020, NFT is the most well-known principle of tokenization. It secures ownership of the work, invents new models for the distribution of value between the creator and the buyer. In 2021, the traditional art market represented a turnover of $17 billion. Meanwhile, the crypto art market has topped $40 billion.

Healthcare, public sector, real estate, education… lots of blockchain applications

In the field of healthcare, blockchain sets itself ambitious goals in the field of storing and sharing data about our health. This facilitates the interoperability of healthcare subject information systems (which are fragmented and multiple). It is a strategic solution for the future in medicine tracking and anti-counterfeiting.

In the public sector, the potential is huge. Since 2011, Estonia has implemented blockchain into its information systems to provide unified citizen authentication, security of their personal data and fluidization of administrative services. Estonia is even preparing to launch its own Estcoin token, which will allow anyone to invest in the country. Say goodbye to bonds and Treasury bills.

In many countries (in particular, in Finland, the USA, Honduras, Australia), initiatives are multiplying to facilitate and provide access to administrative services, digitization and authentication of government documents or diplomas, healthcare, social benefits, voting and citizens’ contributions. In terms of cost optimization, efficiency of allocated resources and fluidization of use, this technological contribution is undoubtedly the shock that administrations need to create a modern public service that is efficient, interactive, flexible and secure.

Blockchain technology is young, but its technical development is very fast. It questions and challenges our relationship of trust and invites us to rethink it. Blockchain tends to redefine “trusted third party” and sets new governance rules within and between organizations where transparency, inclusiveness and security will be not only goals but also hard and fast rules.