The blockchain revolution

Published on June 29, 2022   15 min
Please wait while the transcript is being prepared...
Hello. My name is Professor Karpovsky. I'm a faculty member of the Department of Information Systems at the Carroll School of Management at Boston College. Today I'm going to talk about the blockchain revolution.
Blockchain, in my view, is one of the most important technological innovations of the last decade. The invention of the internet has been one of the most impactful digital innovations in the last 4 decades. It brought us the World Wide Web, e-mail, .com businesses, social media, mobile web, big data, cloud computing, and the Internet of Things. However, it has also shown us its limitations. We still can't trust one another over the Internet. There's a lack of security on the Internet. For example, we cannot reliably exchange money without a third party, like a bank, involved in the transaction to validate identities and account information. Blockchain technology attempts to solve Internet problems of privacy, security, and inclusion using cryptography, a branch of mathematics mathematics utilized in computer science. This innovation has already started to change the world. It is important to explore this technology. To further understand the extent of its impact.
The concept of blockchain was introduced in 2008 by by Satoshi Nakamoto in 'Outline of Bitcoin', a peer-to-peer payment network. Before talking about what blockchain technology is, let's talk about the problem that this technology was trying to solve. One of the major issues related to digital transactions over the Internet, is what we call the double-spending problem. In the physical world, in a physical transaction, ownership of a token of an asset is clear since physical dollar bills, for example, cannot easily copy and paste it. When Alice sends the token to Bob, she no longer has the token and Bob does. However, in the digital space, there needs to be an assurance that virtual tokens have not been promised to more than one person. What if Alice, for example, made copies or forgeries of the digital token? After all, a digital token is nothing but a string of ones and zeros. How can Alice and Bob establish unique ownership over this digital token? One answer to this problem is to use a database, a ledger. This ledger will track a single asset, these digital tokens, that Alice and Bob exchange. When Alice gives Bob a digital token, the ledger records the transaction. Bob has the token and Alice does not. While the ledger allows us to keep track of