Co-founder of Activision & co-founder and CEO of StartEngine
At 10am EST today February 14, Congress held a joint hearing on blockchain technology, “Beyond Bitcoin: Emerging Applications for Blockchain Technology.” During the hearing, 5 experts on blockchain application spoke before Congress. Here are the main takeaways from the hearing:
1. Blockchain Can Track Mangoes In 2.2 Seconds.
One of the recurring themes from this hearing was how blockchain could potentially change the way supply chains operate, and the most illustrating example of this was presented by Frank Yiannas, the VP of Food Safety at Walmart, on the food supply chain. “Too often people talk about a linear food chain when it is, in fact, a complex network,” Yiannis remarked. In 2017, Walmart and IBM completed two proof of concepts for blockchain’s use in the food supply chain. In one, they tracked mangoes via blockchain, where they were grown, harvested, transported, and later sold.
Previously, tracking a mango from its point of sale all the way back to its origin took a total of 7 days. With blockchain technology, the process took only 2.2 seconds.
Later, during the Q&A, Yiannas elaborated on how important that new efficiency is. If a food product makes someone sick, a company has two options until they identify the problem: they stop all the food products that could potentially be making people sick or they continue to let people get sick. The latter obviously isn’t a real option, and the former presents serious waste as a lot of perfectly good food has to be pulled out of stores.
With blockchain, food companies can immediately identify the source of the bad ingredients, removing the 7 day loss of sales and food waste. Yiannas describes this goal, ultimately, as “food transparency,” which will make the food system safer and more sustainable, and Walmart is continuing to test blockchain with dozens of food items.
2. A Quantum Specter Hung Over the Hearing.
Surprisingly, though the point of this hearing was to discuss blockchain technology, it felt like nearly as much time was spent discussing quantum computers and how they will impact blockchain technology. Dr. Charles Romine, the Director of the Information Technology Laboratory at the National Institute of Standards and Technology (NIST) noted in his opening remarks that “quantum computers are a threat to blockchain because they can crack the codes of blockchain keys,” the asymmetric cryptographic keys that blockchain security is dependent on.
The topic came up several times during the Q&A, clearly indicating that Congress is concerned about quantum computing and its capacity for cyber hacking. Dr. Romine stated that NIST is working on developing post-quantum cryptography, new algorithms that can beat quantum computers, but there is no timeline upon their completion, or, for that matter, the arrival of quantum computers. Upon later questioning, Dr. Romine stated that he didn’t know when we’d enter a quantum world, noting that public estimates varied from “15 to 30 years away” without offering his own opinion into the mix. However, he stated confidently that these new algorithms will exist “long before” quantum hacking poses a threat to blockchain.
3. Don Beyer Is Excited About Blockchain.
The true joy of this hearing was watching Don Beyer, a representative from Virginia, learn and get excited about blockchain technology. His first words at the hearing were, “I’ve asked everyone in the past week to explain blockchain to me. No one can. Hopefully, someone can explain quantum mechanics to me too.”
As the hearing proceeded and Beyer learned more, he started digger deeper, asking the real questions like “are blockchains infinite” and “can blockchain only be disrupted by an EMP (electromagnetic pulse)?” To the latter, Dr. Romine explained how the distributed ledger works and that it would be extremely difficult to identify where every blockchain ledger is stored. This prompted the following exchange regarding blockchain’s stability:
Beyer: “So as long as we have electricity, we’re probably okay?”
Dr. Romine (smiling): “I think we’re probably okay.”
Shortly after, Beyer asked if quantum computing could be integrated into the blockchain to make it more secure. Dr. Romine walked him through the post-quantum cryptography that NIST is working on, prompting Beyer to remark, “very cool.” Very cool indeed, Mr. Beyer.
4. Blockchain Will Create an Ecosystem of Individual Control.
It seemed that no one could pronounce Chris Jaikaran’s name at the hearing, which became painfully clear during the Q&A, but he had a lot to say regarding the new blockchain ecosystem. On the subject of healthcare blockchain application, Jaikaran, an analyst at the Congressional Research Service, noted that blockchain can “manage electronic healthcare records. As more identities join the blockchain, an individual can have more control of who gets what information about their health.”
This ecosystem of individual control was echoed by Gennaro Cuomo, the VP of Blockchain Technologies at IBM, who elaborated on how the blockchain can work with sensitive data like healthcare records, using triple blind attributes. This means that the information provider doesn’t know who the receiver is, and vice-versa, and the network provider doesn’t know who these two parties are either. Rather than thinking of the blockchain as an information storage system in the context of private information, the blockchain should be thought of as an access management system.
Aaron Wright, a law professor specializing in technology law, believes that blockchain technology will also give individuals more control in the capital raising process. Wright noted that the blockchain “secur[es] scarce digital assets called tokens, powering new forms of crowdfunding,” and that the “sale of tokens could democratize access to capital” by giving everyone access to those tokens.
5. The Atmosphere Was Excited and Hopeful.
Apart from the discussion of specific blockchain applications, the conversation was largely hopeful about blockchain application as a whole, and there was clear excitement in the room. All 5 speakers believe that blockchain will greatly increase efficiencies across industries, though they voiced concerns about the technology as a growing platform. Those concerns included user collusion, data portability, scalability, and user safety, among others, but these are common issues with new technologies, particularly those that are unregulated.
All 5 speakers wanted the government’s involvement in blockchain, with an emphasis on protecting users while cautioning against “undo regulation.” Their wish was clear: blockchain needs regulations moving forward to guide the technology and to protect users while still fostering innovation from businesses. The uncertainty from the government on the technology right now limits blockchain’s growth.
For their part, the Congressional subcommittees present for the hearing asked hard questions, but they too seemed largely excited by the technology. After the opening remarks, Ralph Abraham, Chairman of the Oversight Subcommittee, said, “if I understand the [blockchain] technology, it’s going to be transformational.” Towards the end of the Q&A, Congressman Ed Perlmutter said, laughing, “I’ve got a million questions about cryptocurrencies, but this really [has been] an outstanding panel.”
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