I have been obsessing about the power of blockchain technology for almost a year now.
Despite having a thriving digital media business, it kills me that I missed out on the "internet boom" of the early 2000s.
It was a free-for-all for anyone and everyone that could use a laptop, some basic code and the ability to put a product in front of people.
Fortunes have been made (and lost!) and the internet has evolved from the frontier of nerds with bad odour to a ubiquitous, invisible force that permeates everything on this planet.
And so, too, will blockchain technology.
WTF is Blockchain?
So, let’s start at the beginning. Does anyone actually know what blockchain technology is?
It’s astounding how many people frequently use the term "blockchain" without truly understanding what makes up the underlying technology or what its likely impact will be.
It reached breaking point recently when I attended a blockchain conference and met an "expert" who vomited buzzwords all over me yet failed to articulate any real insight or understanding.
So, what exactly is blockchain technology?
Jamie Skella, founder of
Horizon State -- a Melbourne-based blockchain start-up that is disrupting the way we vote -- explains it very simply:
A blockchain is a distributed database, otherwise known as a distributed ledger. To make things really simple and relatable, let's call that ledger a record book instead. Furthermore, let's talk in terms of it being shared instead of distributed. For even greater context, think about a 'block' as a line item in that shared record book. So, for the purposes of this article, we're going to call blockchain a shared record book.To be clear, this isn't just one record book stored in a central location that is shared by many. There are thousands of copies of this record book, stored on computers all around the world, both home computers and business servers - hence the term "decentralised".
His article, A Blockchain Explanation Your Parents Could Understand, provides everything you need to know for a deeper, practical understanding of blockchain.
But, for the purposes of my
article, I’ll assume that a shared record book is enough to keep us going.
Well, this "shared record book" is important because it allows value
to be exchanged between parties in a trusted way.
Basically, every computer in the system that stores or records the exchange of this "value" provides authentication (trust) that the transfer has occurred.
Beyond the shared record book, blockchain technology will empower a whole new era of agreement-making through what has been coined as "smart contracts".
In short, a smart contract will allow parties to enter into agreements that are stored on the shared record book and contain who, what, when, why and how a transaction occurs.
All levels and layers of industry, government and society will be impacted by this technology.
In Australia, the property industry is primed for a big shake-up.
As the largest sector in the economy and about 13 per cent of our GDP, the amount of value that is exchanged is immense and unrivalled.
I’ve outlined two examples of how blockchain technology may be applied in the property sector in Australia:
In every new development project, property developers are required to pay financial contributions to local authorities.
In Brisbane, for example, a residential development incurs infrastructure charges of $21,000 for every one and two-bedroom apartment and $28,000 for every three-bedroom apartment. These funds are paid on completion of the project and used by local councils to upgrade roads, services, parks and other essential services.
It is often promoted by councils that the funds from that project are being used in the specific local community that the project is being developed.
Rather than the funds being paid to a central point in the council and allocated based on the discretion of politicians, blockchain technology can ensure that those actual
funds are used in that actual community.
Blockchain will be a game-changer for accountability of government expenditure! Look out.
Stay with me here, I haven’t consumed mind-altering drugs...
Coupled with powerful design technology, blockchain could empower councils to run real-time development approval processes whereby developers submit proposals in coordination the local community to allow real-time amendments to be incorporated with a voting system in an event-style format.
Following a period of public notification, residents who care enough to participate can show up and contribute to the outcome of the development in a participatory and immediate way.
Blockchain is very much in its infancy as a technology. We’re in the mid-to-late-90s in the context of the internet’s equivalent trajectory.
The pioneers -- like Jamie Skella, above -- are forging their paths into the unknown and may well be the Bill Gates, Steve Jobs or Mark Zuckerberg’s of this next era, the so-called Fourth Industrial Revolution.
So, what can you do? Very simply, get your head around it!
Try to understand the underlying technology, but don’t labour too much. Instead, try to understand the impact that the technologies will have on the future of society and business.
Often people have very binary views on technology. You are either "into it" or not.
Well, like the internet, we’ll all be "into" blockchain technology in the future. It’s just a question of whether we want to make the most of it.
Adam Di Marco is the founder and publisher of The Urban Developer. He is also the managing director of Di Marco Group, a Brisbane-based boutique property development business and executive chairman of CityShape, a disruptive big-data start-up for the property industry.