Blockchain: A new era of trust?
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;
Story

Blockchain: A new era of trust?

Issues/Technology , Stories/368
Sydney NSW, Australia
29th Oct 2018
Blockchain: A new era of trust?
Discover the potential social benefits of some of the most innovative applications of blockchain technology.

With the arrival of blockchain technology, relationships of trust are changing. Blockchain is the technology that underpins cryptocurrencies but its application has wider ramifications and potential social benefits. New social and commercial opportunities are being explored in relation to identity, democracy and consumer empowerment.

Blockchain technology is deceptively easy to grasp. In reality, it is much more complicated to understand. At its most basic level, it is a database that records transactions on distributed ledgers whereby the authenticity of transactions is verified by a network of peers rather than a third party such as a bank.

Academics such as Philippa Ryan and Marcus Foth are using their research to promote both innovative applications of blockchain and distributed ledger technology. Stevie Ghiassi, the founder of Legaler, seeks to streamline access to justice through his start-up founded upon the principles of blockchain.

Dr Philippa Ryan, who did her PhD on the topic of breach of trusts, had initially never heard of trustless relationships. "I did a search for 'trustless relationships' and blockchain in google and it only came up with 8 hits. That was on the 13th of October 2015. If you do that search now you get 340,000 hits", she recalls. Her curiosity regarding blockchain piqued and eventually led to a book co-authored with Mark van Rijmenam on how blockchain can solve the UN's sustainable development goals.

Philippa Ryan, Barrister and Senior Lecturer at UTS
Philippa Ryan, Barrister and Senior Lecturer at UTS

"Back in 2015 the UN identified 17 sustainable development goals, very complex difficult problems and they have set 2030 as a deadline. For example, number 13 is chapter 6 of our book which deals with climate action and Chapter 3 is about blockchain and identity" says Dr Ryan.

As the global movement of people continues amidst war and natural disasters, we can be faced with many obstacles when trying to prove our identity. Refugees often arrive in another country without documentation while remote indigenous Australians are unable to access healthcare because of identity shortfalls. Homeless people also have similar problems.

"In Kenya for example, if you try to open a bank account, there is a law that says that you must have an address, and that address must comply with certain conventions. You are not allowed to say 'I live behind the red truck three doors away from the railway station that has been abandoned for 8 years and is 8 stops from Nairobi. That's not going to work. And it's the same in Australia", explains Dr Ryan.

"Give undocumented and unbanked people all over the world some sort of unique identity whether they have a passport or a birth certificate so that we at least recognise them as humans", states Dr Ryan. One way to do that would be to combine blockchain with facial recognition technology like that used by Apple, Facebook and WeChat.

Dr Philippa Ryan uses a pertinent analogy to describe just what blockchain technology involves. "Think about blockchain as the best tracking system known to man where trust is managed by a cryptographic proof rather than relying on humans", she says.

The importance of trust and tracking comes full circle when we think about the consumer and the provenance of goods. Beef Ledger in partnership with QUT and Food Agility is using blockchain to counter food fraud in the supply chain of beef.

Marcus Foth, Professor of Urban Informatics at the QUT Design Lab, says "Ethereum blockchain can be used to introduce smart contracts in the supply chain of the beef industry". Smart contracts are small executable programs on the blockchain computational platform.

Marcus Foth, Professor at QUT Design Lab
Marcus Foth, Professor at QUT Design Lab

"The consumer doesn't have a way in which to verify whether something is authentic and whether what is said on the label is actually what is inside. What blockchain can do is offer a credentialed way to provide provenance data. This will counter issues around replacing premium beef from Australia with lower quality beef from elsewhere and selling premium beef on the black market.

"By enabling a more direct relationship between the consumer and the producer you're able to shift the power balance toward those who are creating value."

But Professor Foth believes blockchain's impact will not be limited to consumer empowerment through supply chain provenance.

"It will have huge ramifications, from insurance, from the way we look at health and health data, to the way we think of democracy and governance. Trust is not just limited to financial transactions, it pertains to pretty much all factors of life.

"At the moment we have to trust our elected representatives who are in a way intermediaries. They are supposed to represent us but in a lot of cases what you see is that there are other forces at play, there is corruption at play. What blockchain might be able to do is explore and experiment with other forms of direct democracy rather than representative democracy."

Blockchain technology is also gaining traction in the legal profession. Legaler, a startup which has attracted attention and financial investment, aims to apply blockchain technology to streamline access to justice and legal services.

Stevie Ghiassi, co-founder of Legaler, says the start-up "was born out of our frustration with dealing with legal systems. Our vision has always been to build a technology layer and blockchain infrastructure for what we believe is the future of legal services."

Stevie Ghiassi, Co-founder of Legaler
Stevie Ghiassi, Co-founder of Legaler

"Given there are 4 billion people who don't have access to justice and the rule of law we came up with LegalerAid which is a decentralised charity using blockchain technology that could transparently connect disadvantaged clients with pro bono lawyers."

LegalerAid is one application within the Legaler ecosystem which will provide digital tools to build decentralised apps or "DAPPS". The first thing that Legaler is building is Legaler ID which is currently at the Alpha testing stage. LegalerAid is planned for late 2018. According to Ghiassi LegalerAid "is going to have the largest impact."

"The idea is that legal community legal centres will put cases into the application and lawyers who have opted to do pro bono work will be able to take them on. There is a reward token incentive scheme a bit like a frequent flyer. If you have done 5 cases for example, you will have tokens accrued."

Ghiassi sees blockchain disrupting many of the current business models in play, not just charities. "Any business that has an intermediary is going to be superseded by a blockchain model, which takes us back to peer-to-peer dealings."

Despite all the optimism surrounding blockchain technology, there are still many hurdles to its wide application and acceptance. In May 2017 the CSIRO released two Data 61 Reports that looked at some of the opportunities and risks associated with blockchain and distributed ledgers.

It noted that "blockchain technology may provide advantages for integrity and non-repudiation. However, they also currently have limitations for confidentiality, privacy, and scalability." Ghiassi also points out problems with scalability as the technology is in its infancy and will take time to develop faster transactional efficiency. The CSIRO further noted that "privacy and confidentiality can be a challenge when integrating identity information into a blockchain- based system". In addition, storing big data and executing blockchain programs can be quite costly.

Professor Marcus Foth is encouraging but also critical. "I am largely optimistic about the technology and the principles of what it can do but it has a number of obstacles to overcome. And a lot of these obstacles are not of a technical nature, they are more a conflict between the old intermediaries of capitalism and new forces that want to achieve and arrive at a better system, a better paradigm for humanity."

For many people blockchain technology remains a foreign language. But according to Dr Ryan, this won't be a limiting factor in the future.

"In 5 years' time no one is going to care about whether there is blockchain underneath an app. All everyone expects is that it's connected to the internet. I'm going to write to something or I'm going to read from something or maybe do both. Or maybe conduct a transaction and then off we go."

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