Not only is blockchain a philosophy that penetrates through Industry 4.0 and an outlook on the world, it is also an idea that is constantly evolving. It refers to value and hegemony, network, exchange and communication of information and asset, and movements of members of societies and changes in cultures.
Blockchain is a new paradigm that surpasses government regulations. Regulations must not cut off sprouts of blockchain. Strict regulations are just like trampling awakening of Industry 4.0 that is near. Markets surpassed levels of countries, laws, and controls, and there is not single government or authority that can stop them.
The Electronic Times is going to focus on appearance of blockchain and expansion of its concept. Concept of blockchain is continuing to expand after it was limited to virtual and cryptocurrency initially. As it combines current traditional industries in various ways, it leads to duplication and creation. This process is similar to a concept of internet in its early age. Just like how internet has made today’s world, blockchain is going to develop new countries, intelligent industries, and economies.
The Electronic Times is going to analyze blockchain over the next 2 weeks and focus on concept of blockchain, changes in blockchain technologies, counterstrategies for each industry, and proposal of policies. The Electronic Times’ only goal is to regularize discussions about blockchain and it is waiting different opinions from its viewers.
“10% of GDP (Gross Domestic Product) in the world will occur from blockchain platforms in 2025.” – WEF (World Economic Forum)
WEF, which was held in Davos, Switzerland in February, made such prediction on how blockchain is going to affect daily lives after 7 years.
7 years is not too far away. Blockchain is a new technology that can redefine finance, supply network, law, accounting, telecommunication service, and even government.
Blockchain is a digital economic technology. It will make central banks and information processing organizations disappear and open up a generation of P2P (Peer to Peer) economy. Blockchain has combined economies and technologies with a method that no one predicted. Fact that central banks and information processing organizations are going to disappear indicates that it will be impossible to control blockchain. It is realistically impossible for a government to control blockchain with regulations. Only things that a government will control are traditional industries (including internet) that are connected to blockchain.
Blockchain also redefines ‘trust’ of society itself. Interactions that occur online are improved to abilities that can process trust and transactions through a new method. Final users will not have to depend on large-scale bridges and adjust transactions through P2P.
Word blockchain does not have a particular meaning such as ‘cryptocurrency’ or ‘virtual currency’, but it includes wide range of technologies and solutions.
Simply put, blockchain is a ‘semi-permanent system that clearly records exchanges and processing’. It does not depend on any authority of a central organization and it is duplicated and expanded within any place that is connected to internet. Only way to deny blockchain is to remove network itself from the world.
Blockchain was implemented as people were trying to look for ways to safely exchange digital technologies, data, and information fast. It completely redefines a way of implementing business process and how it was designed initially.
Blockchain provides values such as security, transparency, credibility, and effectiveness and it carries out a role of an infrastructure that develops Industry 4.0 and new growing industries.
“Blockchain along with DNA (data, network, and artificial intelligence) will play roles of important infrastructures that will lead connection for Industry 4.0, which is defined as intelligent revolution based on hyper-connection.” said the vice-researcher Kim Kyung-hoon of Korea Information Society Development Institute.
Industry 4.0 technologies and industries such as self-driving car, VR (Virtual Reality), intelligent robot, 3D printer, and Smart Factory and City will be placed on top of hyper-connected intelligent infrastructures that are composed of blockchain, data, network, and AI (Artificial Intelligence).
Industries have recently focused on the fact that blockchain is used for exchanges of ‘values’, which is similar to virtual currency. Range of exchange of values will expand and become more stable as time goes by. If blockchain is applied, unchangeable transaction records will be created. It also creates opportunities to redefine global supply network through cooperation between individuals and small and medium companies. Unchangeable records give transparency throughout network and create new insights for regulation authorities.
Blockchain is widely known as virtual currency or cryptocurrency such as Bitcoin. Blockchain moves financial services industries from being based on process to being based on data. Insurance and financial transactions between countries are areas that should be improved by blockchain.
Identification management is an important foundation for digital society as it is important for finance, healthcare, and many different fields. Blockchain provides individual identification management that is suitable in digital world. According to UN’s sustainability report, effective identification management system protects societies and helps with preventing disasters and impact. It also creates a flexible local economic system, reduces corruption and cost in wire transfer, and increases human rights of the weak from societies.
Digital technologies have surpassed regulations, laws, and practices. Blockchain changes a government’s economy department, policy management methods, and frames of how legal services are provided. Industries that are introduced with blockchain require new accounting practices and audit process. Blockchain affects accounting companies, laws, regulations, and policies with important effects.
There are also tasks that need to be solved as blockchain is not an universal technology. Although there are fields that will benefit from blockchain, there are also areas where central servers will be more effective than blockchain. Bringing blockchain blindly can cause waste and confusion.
“Although people thought that all participants will mine using CPUs when they are designing blockchain, specialized mining equipment have emerged over a period of time.” said Professor Kim Seung-joo of Korea University’s Graduate School of Information Security. “Collectivization and formation of power and decentralized blockchain were created when participants who had many mining equipment joined forces.”
How safe blockchain is going to be is still not clear.
“Ethereum, which is a blockchain platform, is operating bug bounty program that looks for weak points of its software.” said Professor Kim. “Weak points of its source code itself are being found continuously.”
Waste of enormous amount of energy is also a problem. It is estimated that 14GW of electricity will be spent to mine Bitcoin in 2020. This amount is same as an amount that is spent by a country like Denmark.
Staff Reporter Kim, Insoon | insoon@etnews.com