In the near future, the Internet of Things (IoT) will enable billions of smart devices to sense, respond, communicate and share data. Those things will also have the ability to generate, buy and sell their own electricity.
Now imagine if each household that has the ability — and a lot of these things — to generate and store electricity can enter into automated, peer-to-peer transactions with neighbours or sell power back into the grid at the market rate, rather than through a third-party utility.
But first, consider the aging energy grid of today, which is from the industrial age — large central sources broadcasting power to “dumb” appliances. This will have to change.
Using emerging software and technologies, we can instill intelligence into existing infrastructure such as a power grid by adding smart devices that can communicate with one another, reconfigure themselves depending upon availability of bandwidth, storage, or other capacity and therefore resist interruption.
Turns out blockchain, the powerful new technology that underpins cryptocurrencies like Bitcoin, is critical to this. Blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value –like money and units of energy – can be moved and stored securely and privately peer to peer, and where trust is established, not by powerful intermediaries like banks, governments and technology companies, but rather through mass collaboration and clever code.
Ever since the Romans established a central currency system in the third century BC, money has been controlled by the state as a tool of political power. This control was exerted by manufacturing coins, issuing currencies backed by stored gold and, eventually, through central currency reserves. In each of these phases of monetary history, the state had near universal control over money. As such, the state could tax and regulate its use and fund its own activities.
Bitcoin was imagined by an anonymous computer programmer (or group of programmers—their identity is unknown) known as Satoshi Nakamoto in an attempt to break the tie between the state and money. It was intended to be the lingua franca of the internet—a currency born of, designed for and using the attributes of the World Wide Web.
After Britain’s referendum vote to leave the European Union, Brexit’s loudest advocates scurried from public view and the political establishment descended into a caustic battle for control. Emerging from the melee was Theresa May, who has a reputation for consistency, if little else. But Britain doesn’t need a caretaker in these uncertain times. It needs bold, innovative leadership.
One person has quietly stepped up: Canadian Mark Carney, Governor of the Bank of England. Mr. Carney acted quickly to stem the Brexit panic. Now, he can and should do more.
The buzz surrounding the much-anticipated book Blockchain Revolution: How the technology behind bitcoin is changing money, business, and the world co-authored by renowned media visionary Don Tapscott and his son, blockchain expert Alex Tapscott, is well founded. I was lucky to be seated at the standing-room-only Canadian book launch and presentation at Rotman School of Management recently, attended by Canada’s business elite. Much of what Don Tapscott had predicted in his 1994 book The Digital Economy had come to pass, and as such, the audience was all ears.
To understand blockchain technology, or to try to at least, is to understand the buzz. At a high level, according to the Tapscotts, the blockchain is the most important digital innovation to follow the Internet. It is the technology which underpins the digital currency bitcoin, and its disruptive capabilities are expected to be huge, impacting not only financial services, but virtually every industry, institution and even government in the world.
Proposed in 2008 and launched the following year, bitcoin – a “peer-to-peer electronic cash system” – was initially viewed by many as the preserve of geeks and criminals. Yet it has subsequently taken giant strides towards the mainstream. There have been various high-profile attempts to unmask the “real” Satoshi Nakamoto, the pseudonym used by bitcoin’s inventor(s). And in the immediate aftermath of the Brexit vote, some hailed bitcoin, surging as the pound plummeted, as “digital gold”.
It is now recognised that the still-mysterious Nakamoto did more than invent a currency. He also solved a longstanding problem in computing, to do with date and networks. His solution was complex, but it involved the use of an infrastructure comprising “blocks” of confirmed transactions that form a chronologically linked “chain”. As other digital currencies, and other blockchains, have emerged, banks and some governments have begun to pay attention, and investment is rocketing. The World Economic Forum predicts that, within a decade, 10% of global GDP could be stored on blockchains.
Don Tapscott and his son Alex Tapscott are authors of the book, Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World.
While the UK and the world grapple with the implications of last week’s vote, a technological revolution is quietly unfolding that offers a glimmer of hope, not just to Britain, but also to Europe as a whole.
We’re not talking about the social web, cloud computing, or artificial intelligence. We’re talking about the blockchain, the technology underlying cryptocurrencies like bitcoin. This technology represents nothing less than the second era of the Internet and it holds far-reaching opportunities for Europe. If wielded correctly, it could provide the foundation for a more prosperous Europe. It is also the UK’s best hope at fulfilling the “Leavers” lofty promises of a more global and dynamic Britain.