How blockchains could change the world

What impact could the technology behind Bitcoin have? According to Tapscott Group CEO Don Tapscott, blockchains, the technology underpinning the cryptocurrency, could revolutionize the world economy. In this interview with McKinsey’s Rik Kirkland, Tapscott explains how blockchains—an open-source distributed database using state-of-the-art cryptography—may facilitate collaboration and tracking of all kinds of transactions and interactions. Tapscott, coauthor of the new book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, also believes the technology could offer genuine privacy protection and “a platform for truth and trust.” An edited and extended transcript of Tapscott’s comments follows.

---[How the blockchain works]
The blockchain is basically a distributed database. Think of a giant, global spreadsheet that runs on millions and millions of computers.It’s allotted. It’s open source, so everyone can change the underlying code, and they are able to see what’s occurring. It’s surely peer to peer; it doesn’t require effective intermediaries to authenticate or to settle transactions.

It makes use of today's cryptography, so if we've got a international, allotted database which could file the reality that we’ve completed this transaction, what else may want to it file? Well, it could record any dependent facts, not just who paid whom however also who married whom or who owns what land or what mild bought strength from what strength supply. In the case of the internet of factors, we’re going to want a blockchain-agreement device beneath. Banks won’t be able to settle trillions of actual-time transactions between matters.

So this is an incredible issue. An immutable, unhackable allotted database of digital belongings. That is a platform for truth and it’s a platform for consider. The consequences are staggering, no longer just for the financial-services industry however additionally right throughout virtually every thing of society.

Maximum blockchains—and bitcoin is the most important—are what you call permission-much less structures. We are able to do transactions and fulfill each different’s economic wishes with out knowing who the alternative celebration is and impartial from crucial government. These blockchains all have a digital currency of some kind associated with them, that's why all of us talks approximately bitcoin within the equal breath because the blockchain, due to the fact the bitcoin blockchain is the biggest.

But to me, the blockchain, the underlying technology, is the largest innovation in computer science—the concept of a dispensed database where agree with is set up via mass collaboration and clever code in place of thru a powerful group that does the authentication and the settlement.