BYU BLOCKCHAIN SUM­MIT SEEKS TO EX­PLAIN BLOCKCHAIN TECH­NOL­OGY

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As co­me­dian Ellen De­Generes ex­plained last week on her tele­vi­sion show: “Ev­ery­body is talk­ing about bit­coin, no­body un­der­stands it.”

Stu­dents, busi­ness pro­fes­sion­als and in­vestors tack­led that ques­tion as they came to­gether last Fri­day at Brigham Young Uni­ver­sity for its firstever Blockchain Sum­mit. The sum­mit, or­ga­nized by BYU law stu­dent Ryan Lewis, pulled in an im­pres­sive ar­ray of ex­perts work­ing in this very new field.

But what is blockchain, how does it re­late to bit­coin and how will it af­fect the layper­son?

As Chad Ben­nett, founder and CEO of Heroic Cy­ber­se­cu­rity in Provo, ex­plained, the “in­ter­net is the in­for­ma­tion ex­change pro­to­col,” and “blockchain is the value ex­change pro­to­col.” Just as the in­ter­net changed the way so­ci­ety, at a very ba­sic level, ex­changes in­for­ma­tion, blockchain ad­vo­cates say this new tech­nol­ogy will change the way so­ci­ety ex­changes as­sets.

Jonathan John­son, pres­i­dent of Medici Ven­tures and a mem­ber of Over­stock.com’s board of

di­rec­tors, de­fined as­sets as: real prop­erty — like land or a home, cur­ren­cies — in­clud­ing cryp­tocur­ren­cies, or even stocks and bonds.

“An as­set can be any­thing that, when I give it to you, you don’t want a copy. You want the ac­tual thing,” John­son said.

Send­ing some­one an email or PDF — those are copies of the ac­tual thing, he added. In that sit­u­a­tion, users don’t care if it’s a copy. But a user does not want a “copy” of $100. They want the real thing.

“The blockchain al­lows for the dig­i­tal trans­fer of as­sets in a way they will flow free and fric­tion­less,” John­son said.

At its very ba­sic and sim­ple core, blockchain is the highly tech­ni­cal and ex­tremely dif­fi­cult “math games” which have cre­ated the plat­form for a de­cen­tral­ized pub­lic record of as­sets to ex­ist. As Bernard Marr ex­plained in a Forbes ar­ti­cle pub­lished last week, “blockchain pro­vided the an­swer to dig­i­tal trust be­cause it records im­por­tant in­for­ma­tion in a pub­lic space and doesn’t al­low any­one to re­move it. It’s trans­par­ent, time-stamped and de­cen­tral­ized.”

He went fur­ther by quot­ing Sally Davies, an Aeon Mag­a­zine and Fi­nan­cial Times tech­nol­ogy writer and edi­tor.

“Blockchain is to bit­coin, what the in­ter­net is to email. A big elec­tronic sys­tem, on top of which you can build ap­pli­ca­tions. Cur­rency is just one,” she said.

John­son called bit­coin and other cryp­tocur­ren­cies the first “killer app” to come out of blockchain tech­nol­ogy. In a highly sim­pli­fied anal­ogy, cryp­tocur­rency is like dig­i­tal cash. For ex­am­ple, when two peo­ple go to lunch, and one per­son pays the se­cond for their share of the tab, they have dif­fer­ent op­tions.

One op­tion would be to use their smart­phones and Venmo the money from one to an­other.

That trans­ac­tion, though, in­volves mul­ti­ple users, or “trust bro­kers.” Venmo ver­i­fies the first per­son has money in a linked bank, ver­i­fies the sub­trac­tion from that fund, then ver­i­fies the trans­fer of that money to se­cond per­son’s bank. On each end, the in­di­vid­u­als’ banks also record the trans­ac­tion on their own ledgers.

An­other op­tion is the first per­son can open their wal­let, pull out some dol­lar bills and pay the other with cash. No one else is in­volved in that trans­fer of money ex­cept the two peo­ple. Us­ing cryp­tocur­ren­cies through blockchain tech­nol­ogy is very sim­i­lar to giv­ing some­one

dig­i­tal cash. Again, no cen­tral­ized banks are in­volved in the trans­ac­tion. It is just a trans­fer of money from one per­son to the next, in the form of bit­coin or other cryp­tocur­rency.

John­son ex­plained the added ben­e­fit to cryp­tocur­rency is, yes, that trans­ac­tion is made di­rectly like the real-world ex­change of cash, but there is a dig­i­tal record, or ledger of the trans­ac­tion. It leaves a dig­i­tal foot­print, un­like real-world cash nor­mally. In this way, as­sets can al­ways be ver­i­fied.

Be­cause blockchain is tied to tech­nol­ogy and not to any one gov­ern­ment, busi­ness or en­tity, many com­pa­nies are look­ing into its use as a way of pub­licly record­ing other as­sets, be­sides money. These in­clude med­i­cal records, sup­ply chain pro­cesses, prop­erty rights, in­sur­ance, con­tracts and even vot­ing.

Blockchain tech­nol­ogy and cryp­tocur­rency is still very new, and yes, like the ini­tial ad­vent of the in­ter­net, peo­ple are still try­ing to wrap their heads around what it is. Hon­estly, for the layper­son, it may not be the right time to jump into the fray, un­less he/she has a solid un­der­stand­ing of the play­ing field. John Quinn, founder and chief risk of­fi­cer of Storj, said dur­ing Fri­day’s sum­mit that the cryp­tocur­rency world is very risky right now for the unini­ti­ated, as we’re in the “wild, wild West” phase of this in­dus­try.

That will change as reg­u­la­tion and more over­sight comes, though, say blockchain ad­vo­cates, of which Quinn is one. John­son even be­lieves peo­ple in many parts of the world may even­tu­ally be paid their wages in cryp­tocur­rency.

For now, Lewis was just ex­cited to have so many peo­ple gath­ered in BYU’s Gor­don B. Hinck­ley Alumni Cen­ter to start the con­ver­sa­tion on this new tech­nol­ogy.

“The blockchain al­lows for the dig­i­tal trans­fer of as­sets in a way they will flow free and fric­tion­less.” JONATHAN JOHN­SON - PRES­I­DENT OF MEDICI VEN­TURES

Im­age: Ariel Zam­be­lich/WIRED

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