You could be forgiven for having never heard of a “blockchain”. When I raised the issue of blockchains in Parliament it was the first time the word had been recorded in the Hansard record of parliamentary debate. It hasn’t been mentioned again.
Yet at tech events and forums discussion is ablaze with the seemingly limitless possibilities of blockchains, with some claiming they will transform the internet in the same way that the combustion engine revolutionized road travel. But what is this revolutionary new technology?
At its most basic: blockchains are a method of storing data. The advantage of doing so in a blockchain is that it is more secure, almost impossible to hack and cheaper to operate than a conventional database.
Traditionally data has been stored on a single central computer and people can alter that data only by going through a third party who has the power to change it. The data on a blockchain, however, is stored on every computer connected to the service and gets updated automatically without a central arbiter.
When someone wants to update or input new data, they first alter the record on their own computer and subsequently that amendment is verified by the other computers connected to the blockchain. The update is only confirmed and locked into the blockchain when 51% of the computers have verified it. Thus it is almost impossible for someone to counterfeit a record unless they controlled 51% of the computers on the blockchain.
Even if the technology behind blockchains is prohibitively complex and nerdy, its’ potential is not. Blockchains dissolve bureaucracy and shred red tape, a perennial problem in the public sector.
Virtually all of today’s digital infrastructure could be improved in theory with a secure blockchain whether it’s cataloguing business records, registering car ownership or, an idea that recently won an award from the Bank of England, allocating blood in the NHS Blood Supply Chain System more effectively. Indeed if something is not currently undertaken because it is considered too complicated, such as interoperable electronic health records, a secure blockchain would have the power to enable it.
The question is whether they can be used without compromising security. I believe we would do well to have a parliamentary debate on blockchains because the Government needs to recognise the power of blockchains to, not only, improve public services at a reduced cost to taxpayers but to create more powerful citizens in a smaller and more decentralised state.
The commercial opportunities of embracing the power of blockchain technology would not only give a big boost to Britain’s vibrant technology sector but our exports would also lay the foundations to aid developing nations’ digital infrastructure.