By 2017, “bitcoin” and “blockchain” have become two of those buzzwords that have trickled down to even the most tech-unsavvy audiences. There are a few reasons for that. Firstly, both terms have a rather mysterious, sci-fi-like quality about them that can spark even the imagination of people far removed from computer science and cryptography. Secondly, they revolve around two fundamental concepts we all are heavily reliant on – law and money. Finally, they have the potential to change society as we know it. It was not surprising then that the Edinburgh International Science Festival would include a discussion on such a current topic.
The principle and importance of blockchain – the core of bitcoin cryptocurrency – were highlighted in a talk delivered by Prof Aggelos Kiayias, the Chair in Cyber Security and Privacy at the University of Edinburgh, and hosted by Dr Aleks Krotoski, a technology journalist and former presenter of the BBC documentary “The Virtual Revolution”. The aim of the gathering was to elucidate the effect of blockchain on the psychological sense of community and value.
Law and security lie at the heart of blockchain technology. We use the law to protect ourselves from other people who may have conflicting interests with us, and it is enforced by legitimate institutions. Another means of protecting our interests is cryptography. There is an old definition of it, which is rooted in military needs: the science of communicating secret messages in the presence of an adversary. But there is a new definition of cryptography: a system of distributing trust where interpersonal interaction is involved. Unlike the law, cryptography does not rely on social institutions, but on mathematics, which alleviates the bias.
The exchange of goods is at the core of society and this is based on money, which is a medium of exchange, a unit of account and a store of value. Throughout human history, money has undergone a few qualitative shifts. Initially, it was an arbitrary token. Then it became a universal token backed by trusted establishments, such as banks. However, there are still caveats in this system as it is not immune to forgery and abuse. The blockchain is another incarnation of money that aims to resolve these issues. In the words of Prof Kiayias, blockchain is a never-ending book, where anyone can be a scribe. Since anyone can write a book, there will be lots of books created. But only a single book that keeps all the existent records can be in use. As expected, this would be the longest book of them all and it is the one that should be used by everyone once a new page is added. For the addition of a page, we can imagine a scribe rolling a set of dice. The scribe who is lucky enough to get the right combination will add a page. Therefore, probability is an arbiter in this system and the book makes progress through chance.
The system does not have to apply only to money; it can be used for any record of any quantifiable value where a conflict of interest may be involved, such as energy usage or land registry. The aspiration of blockchain champions is to create global institutions governed by an innate control mechanism. Nevertheless, several issues are associated with blockchain. If it is based purely on the technological advancement, there will be parties with more control over it. Indeed, the more dice or computing power you have, the more likely you are to produce the right combination. What is the critical number of scribes who roll the dice and what if there are so many of them that they end up coming up with the right combination repeatedly? If anyone can roll the dice, what is the value of the system? The questions from the audience during the talk demonstrated the sense of scepticism about blockchain technology. This is in part due to a still limited understanding of it and in part due to the technical challenges associated with it. As Prof Kiayias noted himself, just because something works is not a good enough reason to use it.
This report was written by Alina Gukova and edited by Teodora Aldea.