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Paul Ruskin, who was part of the BPAY team that won a peer nominated award at a recent blockchain hackathon in Los Angeles, breaks down this complex subject. It's essentially a means of keeping a record of transactions that have occurred, in a way that makes it difficult to tamper with that record. What happens is that everyone gets a copy of the transactions and when you want to add a new transaction to it, the majority of nodes keeping records have to agree for it to be accepted.
When it's accepted, we use some cryptographic processes to make it easy to detect if anyone tries to change that transaction in the future. The blockchain is distributed in that everyone has a copy of the transactions and it's immutable in that once it's in the ledger, it can't be changed.
There's also the consensus aspect of it, in that the majority of people who are participating, have to agree before any new transactions can be added. First-generation blockchains, such as Bitcoin, are really just distributed ledgers and blockchain hackathon los angeles straight record of transactions.
The next generation, such as Ethereum, let you deploy what they call smart contracts, which are effectively a set of rules that are codified on the blockchain network. So you're able to deploy a smart contract, which is essentially an application, that can then run across that whole network and you start moving from having just a straight ledger into being able to support distributed applications, which are often called a DApps.
In essence, blockchain hackathon los angeles smart contract is a set of rules so that when a certain set of conditions occur, then do this. The key advantage is that it's distributed, so you're getting rid of the middle man.
One of the other prime candidates for blockchain is international money transfers. Today, if we send money to somebody overseas using traditional means, the banks need to agree between themselves how much they are going to exchange and how it is going to work, which can result in a process that blockchain hackathon los angeles quite a bit of time to execute. If you do that on Bitcoin, for example, as long as I know your address, I can just submit a transaction that goes in and comes out the other end and you've got it in a very short space of time.
It doesn't need to go through the banks or any other middle parties between blockchain hackathon los angeles and me. You're trusting that underlying blockchain network to do blockchain hackathon los angeles for you.
The other aspect of it is that the smart contract itself is visible as well as the associated rules and they are also on the blockchain. This means, for example, that no one can come along later and slip some money off to the side or put in an additional fee. One of the prime challenges with blockchain at the moment is the governance aspect. There's an example from early November where an Ethereum contract for protecting wallets was deployed with a bug in it.
Someone triggered the bug which effectively locked all wallets that depended on the contract. There are also legal aspects if, for example, you have a blockchain that represented a blockchain hackathon los angeles media network and someone published something defamatory, how would you take it down?
From a BPAY perspective, we've really got a watching brief on blockchain at the moment. We're just looking at it to try and work out which use cases make sense for us and where it would be appropriate for us to be in a market. I think in facilitating interbank payments, especially with international money transfers, that there are definitely blockchain hackathon los angeles opportunities.
The areas that I see development coming to the blockchain are really around speed and scaleability. And also, when you look at the amount of energy that the blockchain network uses, it's very large. The Los Angeles trip was for a hackathon in Manhattan Beach. It brought together nearly one hundred engineers from all over the world and twenty teams had three days to try and come up with a new DApp running on Ethereum that you could then take to market.
Our team was called BillChain and we built a subscription management platform. Everything these days is moving towards subscriptions, from Netflix to the Sydney Morning Herald, but it's really hard to get a view on the subscriptions you've got, how much are you paying, when the money is debited and things blockchain hackathon los angeles those lines.
So, using Ethereum, we built a smart contract that represented your wallet and a smart contract that represented a subscription agreement and then allowed the subscription to be registered with your wallet. You would then see all your registered contracts in your wallet, which you could then approve or decline. If you've approved a subscription, the subscription provider could blockchain hackathon los angeles draw down funds from your wallet according to that contract. It meant that in your wallet, you could also then control those subscriptions because you could effectively stop them, pause or decline.
And our project was lucky enough to be a joint-winner of the peer vote. Subscription management, or that sort of idea, is relatively easy to implement using blockchain. I think the biggest challenge is the volatility of the digital currency.
But with some of blockchain hackathon los angeles governments blockchain hackathon los angeles the world starting to look at whether or not it makes sense to create a fiat currency on blockchain, that would remove some of that volatility, making it easier to implement applications like Blockchain hackathon los angeles in that space. Bringing blockchain down under: Behind the hype of cryptocurrencies like Bitcoin lies a potentially revolutionary technology called blockchain.
In simple language, what is blockchain? How have you seen blockchain evolving? What blockchain hackathon los angeles the key advantages of that sort of blockchain hackathon los angeles In terms of using the DApps or smart contracts, what are the advantages of that system over and above just moving currency? What are some of the downsides? What is the view of blockchain for BPAY?
Where do you see blockchain going in the future? Can you just talk about what the LA trip was and what the main takeaways were? This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY. This is general advice — before using BPAY please review the terms and conditions and consider whether BPAY is appropriate for your personal circumstances.
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