The Future of the Web Looks a Lot Like the Bitcoin Blockchain
Four Cool Things You Can Do With the Blockchain
Last year, Manuel Araoz, an Argentinean programmer who now works for BitPay, one of the original Bitcoin payment providers, created a service that enables users to condense any document and embed it into a transaction on the blockchain. A lot of people are now getting excited about the possibility of using this kind of application to store official records. The two examples that come up most often at conferences are property titles and documents proving “prior art” in intellectual property cases. In the case of titles, you’re basically layering a new form of property onto a Bitcoin transaction. Once a deed to a house is associated with a particular value on the Bitcoin blockchain, it can be transferred from party to party without the need for a paper trail.
In the case of prior art, a document embedded in the blockchain would carry with it a rough time stamp (depending on the rate at which new blocks are being added to the chain), which inventors could later use in patent disputes to prove that they had the first claim to an idea. The same solution would extend to any situation where a human notary was necessary.
According to Gavin Andresen, one of the developers who works on the core Bitcoin protocol, these applications could be especially useful for underdeveloped nations where governments lack a good way of tracking and transmitting official documents.
“I think the places where it makes the most sense are the places where they don’t already have a functioning system, they don’t have some legacy way of accomplishing something that the blockchain can help them accomplish,” says Andresen. “The example of property records, deeds to houses. Here in the United States, in Europe, and in other developed world nations, we have this whole system that’s all about keeping track of who owns property and then taxing them. There are parts of the world where that just doesn’t exist yet.”
There are several groups (Agora, BitCongress, Swarm) that are looking for ways to use the Bitcoin blockchain to enable online voting. Most of the schemes would involve sending a tiny fraction of a specially tagged bitcoin (or a similar token) to every voter. The voter could then sign it over to anyone on a list of candidates. The candidate with the most bitcoins at the end of the vote would win. One of the benefits of a system like this is that voters could divide their votes among candidates. The results are also completely transparent and visible to anyone who has downloaded a copy of the blockchain. On one hand, this is good because you can conduct a public audit of the vote. On the other hand, it opens the door for vote selling.
The BitCongress application, which is still under development, goes further and seeks to carve out a space for all the steps in governance. The group wants to provide a forum for debate, a process for voting, and a place for representatives to publish legislative proposals, all on the Bitcoin blockchain.
Today, when we need to log on to websites or applications, we usually prove our identities by supplying passwords. As a result, we are accustomed to managing many different passwords on many different websites. We are also trusting these Web services to keep our passwords, and therefore our identities, safe.
Onename uses the blockchain to link your name to a Bitcoin address, which you can then prove you control by signing a digital message with your private key (similar to what you do when you spend bitcoins). The developers describe the service as a universal passport for the Internet. They imagine that in the future, instead of signing in to applications with a Facebook account, we will refer to a Onename identity stored on the blockchain.
For example, “If you want to release your medical records to an application, it is important that you are in unique control of your medical records. You’re not going to trust Facebook,” says Ryan Shea, the cofounder of Onename. “This can even be extended to things like authorizing access to your home, opening your garage door, really any action that is tied to identity. So you could see this being used anywhere on the Web where identity is required.”
In this scenario, you never have to reveal your private key to anyone, and you retain complete control over (and responsibility for) the integrity of your online identity.
Distributed Domain-Name Server
Namecoin is an altcoin that was established in 2011. The code is nearly identical to that of Bitcoin, but it uses its own Nakamoto blockchain. Rather than tracking financial transactions, it records domain names and their corresponding IP addresses to provide a more secure, censorship-resistant alternative to the way we usually access websites on the Internet.
When you type a conventional URL (like Spectrum.ieee.org) into a browser, you rely on a centralized third party, called a domain-name server, to look up the URL in a directory and find the numerical IP address of the server you want to connect to. When the U.S. government wants to disable a website, one easy way is for it to demand that the domain-name server, or DNS, refuse to resolve the offending URL. In this case, even though the IP address you want is sitting there in a database on its server, the DNS sends you to a Digital Millennium Copyright Act website takedown notice instead of routing you to your destination. Because the databases are centralized, they are also good targets for hackers. If an attacker can manage to either change an IP address in the directory or send you a false one, he can divert your traffic toward a nefarious website.
Namecoin was created to solve both of these problems. With a Namecoin client, you can look up any .bit URL and be sure that the corresponding IP address is the same as the one that originally registered it.
“With Nakamoto blockchains, it’s very, very difficult to remove data from the blockchain once it’s already in there. And it’s not really feasible to insert fraudulent data that claims to be from an address that it really isn’t,” says Jeremy Rand, one of the Namecoin developers. “What this means is, if I register a name in the Namecoin blockchain, no one else can reverse that transaction and remove it from the blockchain, and no one else can hijack it.”