- Blockchain was developed to provide the public transaction ledger for Bitcoin cryptocurrency
- This technology has uses beyond cryptocurrency
- BlockLAB was formed to better understand blockchain and public ledger technology
Predicting the future is a billion-dollar game that most people lose. When ARPA scientists made digital data transmission possible in 1965, no reasonable person could have anticipated that it would lead to the wild success of companies like Twitter and Snapchat.
Similarly, no one could have guessed that 2008’s Great Recession would give an unknown developer the drive to develop Bitcoin. This digital currency was intended to circumvent the big banks that had broken the economy. The idea was that if everyone could see everyone else’s transactions in a distributed digital ledger, that transparency would ensure the security and validity of all the digital assets being exchanged.
However, much like how ARPA’s intention to create a backup communications system flourished into the internet, blockchain is becoming much more than Bitcoin. This digital ledger excels at tracking financial transactions, but what else can it do?
To answer that question, James Short of the San Diego Supercomputer Center (SDSC) is leading a research laboratory into possible future uses of blockchain. Called BlockLAB, this group is working with AEEC, Collibra, Decision Sciences, Dell Technologies, IBM, and Intel to better understand where this technology is headed.
Why investigate blockchain?
The misconceptions surrounding blockchain are actually what prompted the formation of this research laboratory.
“There's a lot of misunderstanding on what the technology is and what it does,” says Short. “Right now, most people think that blockchain is equal to Bitcoin. Just as Bitcoin does not equal blockchain, Bitcoin does not define cryptocurrency. BlockLAB is not focused on cryptocurrencies. That segment of the technology is principally occupied by investors and currency speculation. Our focus is on enterprise applications.”
Of course, pinning down exactly which applications blockchain could be useful for now and in the future is going to take some hard work. As Short is quick to point out, “you start a lab about something you don't understand.”
What we do know is that there are a host of businesses that are ripe for a distributed, digital ledger system that is both secure and reliable. The general idea is that certain industries require trusted recordkeeping to stay operational, and blockchain can fulfill that need. One sector that could benefit from this technology is energy.
“To run an energy grid, providers need to integrate their operations to provide for continuous service to the network of users,” says Short. “A distributed energy network tends to favor a type of technology that can provide transparency through a distributed ledger that records all transactions reaching across the energy suppliers of the grid.”
In fact, industry decision makers are already making moves to bring blockchain into energy sector trading. Oil companies and traders like BP, Equinor, Koch Supply & Trading, and others are now part of the VAKT platform. This system uses blockchain to simplify the purchasing and selling of energy-producing materials.
Instead of outdated paper contracts and faxes, VAKT consolidates energy trading documents into a single digital ledger that is fully accessible by all involved partners. Although VAKT is currently only dealing in crude oil trading, its future goal is to expand to all types of transactions of physical energy products.
As with any other area of scientific study, deep investigations require specific tools. In the case of blockchain, access to high performance data and computation technology helps. Thankfully for Short, SDSC provides the heavy lifting that makes his research possible.
“With the researchers and machine resources we have at SDSC,” says Short, “we can test blockchain at scale and also get a feel for the costs involved in experimenting with this technology.”
The internet resounds with noise concerning what blockchain may or may not do, but Short isn’t listening. In fact, he ignores the hype and gets down to the business of investigating the details. He’s quick to point out that the public’s obsession with blockchain’s Bitcoin application is limiting. He views this technology just like every other disruptive innovation – compelling, but with a side of skepticism.
“I'm excited about all new technologies that can dramatically affect performance in companies,” says Short. “Is there anything distinctive about blockchain? That's why we started the lab.”