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Blockchain: The revolution that hasn't quite happened

Friday, February 14, 2020  
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Chris Baraniuk | BBC

February 11, 2020

Customer paying for cheese

Blockchain could offer a back-up to payment systems | Getty Images


 

Imagine you are out shopping and get to the till but your card doesn't work. It turns out that your bank has had a computer meltdown and none of its customers, including you, can pay for anything.

But what if the till had access to a record, or ledger, of the balance on your credit and debit cards that was updated anytime you bought something?

Even with the bank's systems down your card would still work at the supermarket, because the till itself would know your balance.

That is just one possibility offered by a distributed ledger, also referred to as a blockchain. The technology has been around for more than a decade and has been heavily hyped.

Blockchain has struggled to find a purpose, beyond powering cryptocurrencies like Bitcoin.

In that scenario, the blockchain acts as a universal record of every Bitcoin transaction ever made. The blockchain is a ledger, or log, of those transactions and users on the network collaborate to verify new transactions when they occur. They're rewarded financially for this effort - an enterprise known as "Bitcoin mining".

It sounds pretty handy, but in practice, it is hardly used. So what happened?

But the basic idea, of a ledger of information distributed around lots of different users instead of held centrally, has provoked a lot of interest.

Proponents have long argued it could be a better alternative to traditional databases.

But how transformative would blockchain-style alternatives really be? The shop tills example was suggested by Dave Birch, an author and advisor on digital financial services, who has been critical of some proposed blockchain schemes in the past.

"I'm prepared to buy that," he says, of the tills idea. "I think there's some value to it."


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