If your eyes glaze over at the very mention of the word, purple-haired ‘community strategist’ Savannah Peterson is here to change your mind about blockchain, writes Maria Slade.
If Savannah Peterson were Mark Zuckerberg, she’d be transforming Facebook into a social network based on blockchain as we speak.
Peterson is no ‘crypto-naut’. With her purple hair and fluro pink blouse, she is making it her mission to explain the mysterious technology to the world. The American speaker, innovator and community strategist did her bit at this week’s Blockworks gathering in Auckland with her workshop, ‘Blockchain for Beginners’.
Blockchain is about decentralisation of power, she says. Platforms such as Facebook are finding their stars waning because it has become clear to everyone that the data they trade on – our data – is not secure. They could change all that by shifting to blockchain.
“It would cost money and they’d have to decentralise their power, which is an interesting challenge for someone like Mark Zuckerberg. The most valuable thing he has is the data on all of us and selling that to advertisers. If he was smart that’s what he would do right now, because you could get trust back.”
Having only the dimmest understanding of blockchain, I came out of Peterson’s 80-minute primer with these key takeaways.
Blockchain has been over-hyped
When something gets more traction on the internet than viral cat videos, it’s time to pay attention, Peterson says. She started to notice it around two years ago, and the hype is now so inflated that blockchain and kittens have converged. Cryptokitties was reportedly the first game to be built on blockchain technology. The game literally involves trading digital cats which, at its height, were costing as much as NZ$175. “Yes Cryptokitties helped raised awareness, but on the flipside it sort of distracted the conversation,” she says.
It’s also a space that has been dominated by the “crypto-nauts” – dudes who want to make a fortune out of cryptocurrencies, buy a Lamborghini and fly to the moon. The community benefit aspect to blockchain passes them by.
“Men in crypto are extremely derogatory, it’s very troll-ey. It’s the most abusive community I’ve experienced,” she says.
“It’s a huge risk because we’ll miss out on the diversity of thought that comes across genders that we’re starting to see… if that attitude isn’t regulated.”
So what exactly is it?
There has been a “horrific muddle of ideas” over blockchain, Peterson says. We all probably know by now that it’s more than cryptocurrencies, but how does it work and what can it be used for?
Peterson’s personal trick to understanding the technology was reading Blockchain Revolution, and in fact the blurb for the book gives a decent explanation. Warning: technical bit coming.
Blockchain enables peer-to-peer transactions without any intermediary such as a bank or governing body. It keeps the user’s information anonymous, and validates and keeps a permanent public record of all transactions. It means your personal information is private and secure, while all activity is transparent and incorruptible. It will have myriad applications, from food security and banking to healthcare and voting.
It’s a digital handshake, Peterson says. When the data is moved it’s encrypted, so it’s secure. To give you some idea the cryptography for the blockchain underpinning Bitcoin is second only in scale to the US Department of Defense, she says.
The technology is still at a super-early stage, characterised by a lot of one-off projects and guerilla activity, but the good part about that is there’s plenty of room for everyone to get on board, she says.
Not every situation will require a blockchain solution. If there’s no need to eliminate a middle man, or if you’re working with purely physical goods, then blockchain is probably not for you.
It will make your data secure
You may have noticed Facebook is not in a good place on the subject of data at the moment. The Cambridge Analytica saga opened everyone’s eyes to how data the social media platform holds on them can be used. “They’ve also revealed they are selling our phone numbers after we use them for two-factor encryption to make our accounts more secure, which is especially classy,” Peterson says.
“Our data is not secure right now, pretty much anywhere to be honest. Your online life has created its own online persona, and privacy and security were not thought about upfront, unfortunately, for all of us who have sold our souls (to Facebook and its ilk).
“Blockchain will solve this problem. You wouldn’t have the ability for that much data to be in one place and get hacked and have nobody notice. You might have 1000 users, or even 10,000, but there will never be 50 million people’s data in one central location again.”
The same principle applies to banking. With blockchain there is no centralised bank vault to steal from, Peterson says. “You’d have to go into each individual person’s wallet and take money out of it, and by the time you’d got to one, the network around that would have identified you were a bad egg… and they would have isolated you.”
And it removes the middle men, Peterson says. How many times when you transact dollars or goods is somebody taking a tax or a fee? Blockchain will eliminate that.
Efficiencies of scale
Blockchain is about making inefficient transactions easier, Peterson says. In December the artificial intelligence company SingularityNet, maker of the female robot Sophia, raised US$36 million in just over 60 seconds in a cryptocurrency capital raising. Petersen worked on the initial coin offering (ICO), and it was the moment she knew blockchain was going to change everything.
Blockchain has applications for a huge variety of problems, such as food supply chain security. Recently there was an experiment done with mangoes, she says. “Before blockchain, if you wanted to track where the fruit came from it would take six days.” But by using a blockchain solution and scanning the label on the fruit at various points, the source of each mango could be identified within 16 seconds. “These are the types of things that will get made more efficient by an order of magnitude,” she says.
If you break your leg on holiday in Thailand, currently the local hospital has no way of accessing your medical records. Imagine a universal medical identification system containing all your data that can be accessed by whomever you allow.
“Right now there’s no way for someone treating you outside your primary healthcare facility to know what your medical history is. You could very easily say who gets what – ‘Why don’t you tell my pilates instructor I’ve strained my back’,” she says.
Voting, real estate transactions, settling a deceased loved one’s estate. All these things could be made easier and more secure by blockchain.
No supreme leaders
All this is about distribution and decentralisation of power, Peterson says.
The users of the blockchain maintain ultimate rights – there is no CEO. It’s up to the people powering the blockchain to sustain it. The failure of one block, or node, doesn’t equal failure of the system because everyone can work around it. Cryptocurrencies were able to float because they could bypass politics.
Another good part about the technology being at an early stage is there’s no ‘owner’ yet – there is no Google of blockchain, Petersen says.
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