Hu Yoshida

What is the most important invention since the Internet?

Blog Post created by Hu Yoshida on Apr 1, 2016

According to Venture Capitalist Marc Andressen, blockchain technology is the most important invention since the internet

Blockchain.jpg

In my last post about the future of banking I mentioned that banks as well as FinTechs and technology companies like IBM and Hitachi are working a new technology called blockchain which is the technology behind Bitcoin.

 

A blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it among a distributed network of computers or peers. It uses cryptography to allow each participant on the network to manipulate the ledger in a secure way without the need for a central authority. A consensus mechanism involving the entire network is used to validate a transaction rather than dependence on a central authority. All this work is still experimental but the value of the blockchain architecture in settling trades in financial services where it takes days to settle through a central clearing house could be dramatic. This could mean that the trades are settled much faster without the expense of clearing house fees.

Blockchain Schema.jpg

Blockchain could also provide more transparency. J. Christopher Giancarlo, a commissioner of the Commodity Futures Trading Commission, was recently quoted in Fortune as saying: “If an accurate [blockchain] record of all of Lehman’s transactions had been available in 2008, then Lehman’s prudential regulators could have used data mining tools, smart contracts and other analytical applications to recognize anomalies, regulators could have reacted sooner to Lehman’s deteriorating creditworthiness.

 

Blockchains are the hottest new technology in the VC and crowd funding space, and its not just for Financial services. The first Blockchain conference was held in San Francisco the beginning of March this year and drew speakers from IBM, Intel, Microsoft and PWC. As well as a number of blockchain startups. Besides, use in digital currencies, the technology can be used for peer to peer, payments, digital asset transfers, file sharing, digital signed documents, smart contracts, and more without the need for a central clearing house or central database.

 

Last December, the Linux Foundation, the trade association that oversees the development of the open-source Linux operating system announced the Hyperledger project in an attempt to unite key stakeholders seeking to leverage the emerging blockchain technology. The thinking is that there will not be one blockchain implementation, but a number of implementations and the focus of this group is to enable them to interoperate and work together. Hitachi is represented on the Hyperledger Technical Steering Committee by Satoshi Oshima, who is the leader of Hitachi’s block chain and distributed ledger research team.

 

Karl Kohlmoos, a member of Hitachi Data Systems’ Global Office of Technology and Planning,  gives us some initial perspectives on blockchains in our Innovation Center on our community website. He explains what it is and some use cases as well as some challenges.

 

Given Marc Andressens’ history of success, his claim about the importance of blockchain should not be taken lightly.

Outcomes