Block chain is a pretty awesome technology that essentially creates an infinitely audit-able record of data (aka: Block) linked through and secured through cryptography (aka: Secure Keys) creating a constant chain. The first real commercial use of the technology is, of course, Bitcoin which creates block chains of financial transactions. Each successive block of data is tied to its previous block through a hash pointer and timestamp. In non-technical terms, imagine you have a piece of paper in your hand with some data – this would be considered the “genesis block” or the root, the original, the start of it all, the seed, the… well, you get the idea. You make 2 copies of that piece of paper and hand it to a couple different people, but they are each attached to the original by a string along with a timestamp. One person makes some changes to theirs, copies it and hands it to someone else with another string attached to their copy and a timestamp. As time passes, the data from your genesis block gets passed around to different people and may change each time, but the strings and timestamps allow anyone to trace back through the transactions and find every version of that data from the “genesis block” to what they have in their hand.

The big hitch to all of this is that these blocks float around through the internet on peer-to-peer networks (think Napster if you’re old enough to remember that cool gem) and don’t need a central “storage” location but persist through distributed hosts. Just like all of those pieces of paper floating around in our example, you and the people you gave the copies to don’t need to live in the same house, or even the same neighborhood. Also, because the genesis block (original piece of paper) can be produced from anywhere, and the block tracer (string) contains just the hash and timestamp, there is no real way to tie that genesis block to anyone in particular. Which, on the rather “dark side” of technology, allows for some not so honest businesses to transact on some not so honest intentions.

As with most things in technology that gain popularity through maybe not the best intentions, block chain has some real, positive, tangible benefits. It can be especially powerful in the public sector and healthcare where the history and tracking of entities (people, businesses, places) is incredibly important. Imagine a business function that uses self-governed, infinitely audit-able data transactions. There is tremendous potential for block chain in the public sector. This transformative technology has the potential to reduce fraud, eliminate corruption, increase transparency, and address inefficiencies. Some of the most logical uses are:

  • Verification (proof of records, transactions, processes, events, and licenses)
  • Movement of Assets (payments, transfer of funds once predefined conditions are met)
  • Identity (eIdentities – unique identity for citizens)
  • Ownerships (chain of custody for physical assets e.g. land registries)

This technology is quickly emerging, and most technologists are still digging into the details and trying to put our hands on it to understand how it can best be used. That said, as with any emerging technology, its application should be carefully considered so that it’s not smashing a fly with a sledgehammer.