Blockchain technology beyond cryptocurrency and bitcoin

California consumers are on the cusp of a “blockchain decade,” say some industry leaders;  but trusting emerging technologies poses challenges for consumers.

California consumers are on the cusp of a “blockchain decade,” say some industry leaders; but trusting emerging technologies poses challenges for consumers.

Getty Images

Entrepreneurs of blockchain, the digital ledger technology that powers 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 chief executive Brian Foote, where “a lot of things we’ll do will have blockchain behind them,” including auto purchases and residential mortgages, as well as how we store and transport banking, driver’s license and insurance information.

Blockchain technology already has a run start supporting everything from digital mobile wallets and non-fungible tokens – or NFTs – online games and other digital entertainment, to billions of cryptocurrency transactions entered in its records.

California, one of the world’s largest economies, is determining how he will pave the way in culture, regulation and adoption of the still emerging technology.

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

The blockchain began and is commonly described as an encrypted public digital ledger 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 the transactions.

Camille Crittenden, former president 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 have been indicted by heads of state with the assessment of the risks, benefits and legal implications of the use of blockchain by government agencies technology, more clearly defines blockchain.

“This is a distributed, cryptographically secured database of records”, Crittenden said. “The other distinguishing feature is that it’s immutable… You can’t go back and erase records. There is therefore always a permanent record of transactions on the blockchain.

What is Blockchain?

Transactions form the storage units or “blocks” in the encrypted database known as the blockchain. These blocks form the links to the chain and a transaction history that anyone using the network can view. Any modification or alteration 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 Humbllikens the technology to cell phone minutes or megabytes of data that stores a user’s information, adding new blocks when storage in previous blocks is exhausted.

“Digital ledger technology allows you to (perform transactions) in a ‘trustless’ manner” – meaning users don’t have to rely on a third-party intermediary to complete the transaction – said Bruce Rafael, portfolio manager at Bay Area-based Tauron Digital. Asset funds.

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

Foote talked about it in a recent television interview from San Diego.

Consumers, Foote said, are “tenants of their data on the web. You rely on brokers, brokerage houses, intermediaries to perform simple tasks in your daily life.

The decentralized nature of blockchain technologies, Foote said, allows its users to conduct their business directly. That prospect has become more appealing to consumers during a pandemic that has dramatically changed the way we shop, work and do business, he said.

Eliminate skepticism

Both Foote and Rafael have been at the forefront of the evolution of blockchain from cryptocurrency chassis to foundational building block for a variety of other services.

Blockchain technology surrounds Humbl offers from mobile wallets – digital ways to store credit, debit and ID cards that allow users to make purchases using mobile smart devices – to store records medical and provide secure credentials to government agencies.

Rafael, whose company manages digital assets for investors, notes blockchain’s role in facilitating trustless smart contracts – self-executing contracts stored as programs in the blockchain that automatically execute once conditions of each part are met.

It’s in spaces like those where Crittenden, the former chair of the state’s blockchain task force, foresees the future of the technology even as she acknowledges the skepticism surrounding the technology because of its ties. with the falling value of cryptocurrency and recent high-profile blockchain-related security breaches.

Its task force’s 2020 report recommended pilot blockchain programs at the California Department of Motor Vehicles to create digital wallets for driver credentials and erect secure blockchain platforms to share driver records across states; to the state Department of Food and Agriculture to more quickly trace sources of foodborne contamination and expedite safety recalls; and to increase accessibility and storage in state archives.

“I think blockchain has certainly 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 kind of speculative financial markets and where the value is so volatile,” Crittenden said. “But I think there are opportunities just to improve the reliability and transparency of storing records, especially where there is a potential lack of trust between partners.”

Crypto industry watchers are also pondering how Californians will adapt and adjust to a blockchain environment. Christine Parlor, researcher at the University of California at Berkeley is an expert in the digital economy, decentralized finance and blockchain.

“Usually, we believe 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 in other countries,” Parlor said. “That said, one of the benefits of blockchain will be to make our processes more streamlined and cheaper – think about signing stacks of documents to buy a house. Making these processes easier, faster and cheaper will improve the situation for everybody. “

Parlor says consumer regulations such as those led by California Governor Gavin Newsom in its executive order of May about the crypto industry and blockchain might reassure uncertain users.

“Regulatory uncertainty is one of the reasons why some consumers are unsure about entering the crypto sphere,” Parlor said. “Clearly defined consumer protections or warning signs will let everyone know where they stand, reduce uncertainty and encourage adoption.”

According to Rafael, the digital asset manager, these are non-fungible tokens – owner-transferable digital financial securities stored on the blockchain – where blockchain technology will gain traction in the market.

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

Rafael sees college degrees and other credentials minted and sent as NFTs to be stored portable and easily accessed by users in mobile wallets. These digital documents could then be “whitelisted” – the process of allowing pre-approved programs, internet protocols or email addresses to access this information.

But it’s in games and entertainment that Rafael sees the mass adoption of blockchain-enabled goods and services, from NFTs 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 on the entertainment side.

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

“We need to get to the point where the technology is adopted by individuals at the retail level, where people are using blockchain in the open and know they are using blockchain,” he said. “Music, games – if it can be adopted, we’ll be closer to adoptability by the end of the decade.”

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

“If it keeps them socially relevant, the entertainment options are part of it and there’s money to be made from it,” Rafael said, “it’s going to be very hard to ignore.”

This story was originally published July 7, 2022 10:47 a.m.

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

Comments are closed.