With a block of data joining and building on another block of data, then another, then another, blockchain technology is changing the information technology industry. It’s enabling transactions in finance and real estate to take place without a middleman and improves security and record keeping.
Crypto currency expert James Lynch spends his days playing with blocks in his role as CEO of an Australian blockchain-based real estate company. He also spoke at the recent Darebin Digital Business Festival on the topic of Blockchain Unlocked.
So James, break it down please - what is blockchain?
“Blockchain is essentially a decentralised digital ledger,” James said. Ledgers go back hundreds and hundreds of years, to the creation of double entry bookkeeping, and “we’ve been using that in a centralised context since then”.
“We rely on centralised bodies, whether they be banks or the government to manage our records and record keeping.
“Bank account to bank account goes through a central party. With a decentralised digital ledger, it’s actually maintained by everyone in the network, so no central party has full control over the system of records.”
The Advantages of Blockchain Technology
“The first is security in that we’re not relying on a central body to make sure that the record keeping is true and correct,” he said.
“Another advantage is the continuity it can provide. If one computer went down, the others would continue to run. For example, the bitcoin transaction network has been up over 99% of the time and there’d be no bank like that because they rely on a centralised system.”
This decentralisation means few outages, one section can be upgraded while the rest is still operating.
Another huge advantage is around record keeping, James explained.
“Blockchain is essentially a block of information and what a block does is have not just the information of the transactions that have occurred within the network but also information about transactions that occurred on the previous block, so they are chained together,” he said.
“So you have a whole series of blocks, all of which have information of all the preceding blocks inside them so you don’t actually go and change any of your records in the earlier blocks, because it wouldn’t work because of the interdependence. This stops tampering and improves record keeping.”
Your Own Unique Address
The other advantage is cryptography, “the security that’s applied to being able to decode information that is stored within a block. It’s a private key, it’s almost your unique cryptocurrency address.”
James said that in his own company, CastleCoin, he’s applying the security and transparency of blockchain to record keeping and transactions in the real estate industry.
“We can store all of that information inside a blockchain and assign it to a digital token,” he said.
“So that way with a transfer we are able to see where that information’s been, who’s seen it and verify that transactions have actually happened, so it not only improves the security but also the auditability as well.
“On top of that another feature that’s on a number of blockchain protocols is the concept of a smart contract. They are self-governing and self-executing contracts - if the terms of the contract are met the smart contract will automatically recognise this and then execute the terms of the contract on its own.
“You don’t need to rely on an intermediary to manage the transaction.”
Blockchain Moving in to Industry
Blockchain technology is also being used for supply chain tracking in Australian-based initiative BlockGrain.
James said: “It’s almost like that paddock to plate scenario so from the minute that grain is harvested at a farm, they can track where that grain goes throughout its whole supply chain process, from the truck to the ship that it ends up on, particularly for foreign entities buying Australian produce, all of that information can be stored in the blockchain.
“Australians are very very good at inventing things, that’s always been our history. While we may not be welding things together, we are putting things together in more of a digital space.”
James says blockchain technology and cryptocurrency “are really going to be the next frontier of financial services”.
“It’s important for students to recognise that there’s a whole lot of digitisation happening in financial services, called fintech and also in the real estate space, which we call proptech.
“And one of the big contributors towards this is going to be the application of blockchain technology.”
Interview / Photo Opportunity
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