You and I need to know about blockchain

In the late 1970’s I started to read about these computer thingies. The Atari, The Sinclair, and the Commodore were the names most often used.  The first computer companies had short lives as every progress meant the demise of the previous model. In a new school a  parent turned up to the school with a Commodore and said the children could have a play with it as his family had outgrown it. It did nothing. In order for it to do anything it was necessary to write a code for it. 

As a person with dyslexia I found doing this very hard because you only had to miss a full stop and nothing would happen. To reread the code, simple as it was, was difficult because a misplaced colon was just as bad. I found it much easier to add a string of numbers, or multiply them with a pencil and paper than to program that little machine to do either.

A year or so afterwards I had another go with an Apple 11.  It was a secondhand machine for which  I paid $1,000.  (I could buy a second hand car for the equivalent amount today). At any rate I found after lots of self tuition I could type a message and recover it. Around that time I  applied for a scholarship (unrewarded) to go  to America and see how schools were using Apple to help kids read and become numerate. 

Time passed and I was working for a firm in Collins Street. They had a mix of computers that produced work using DOS. However within twelve months they introduced a whole room full of IBM machines, (with a memory less than a smart watch today). They used a form of Word until we all had to learn to use windows 96. DOS was of no use. You simply had to type what you wanted -  if you could remember the short cuts to capitals, etc.

In the period of a few years email and computer use became ubiquitous. Looking back it was a revolution in progress. I remember Frank Vagg saying his firm had brought a main frame computer at the cost of a Toorak home that was redundant almost before all the work had been converted to it. Firms all over the country were dismissing their typing pools and each employee had to learn how to operate a computer. It might seem strange now but making each person responsible for their individual output was an enormous change. 

Throughout the years change has been constant. First something new would appear. Early adapters would have their fingers burned when an advance made a thing easier to use, or make it  cheaper, or a development advanced the technology into a new direction altogether. 

As I write this it is eleven years since someone anonymously invented Bitcoin. I cannot explain Bitcoin simply however I recommend we learn about it quickly. It works a ledger in real time and is of importance because it cuts out the middle man. It operates on trust. When I hand over money to buy something I trust I can take away what I have bought because we both have trust it is ok. You have my money. I have your goods.  I cannot spend the money again because you have it and you cannot resell what I have bought. 

On an individual transaction trust is easy. However it becomes more difficult when others become involved. If I give you a cheque we both have to trust an institution, a bank, that it will go as expected. It usually does because the transaction is audited and checked several times to eliminate fraud. But now banks are involved they have to be paid for every step in the transaction this makes things dearer and is a test of trust. And banks have the upper hand because they know what each of us is doing. Knowledge of what we do is of huge advantage to companies like Facebook. 

Americans live with notes that constantly remind them. “in God we trust.” Wags say, Jesus saves ...” and they complete the sentence in anyway that suits them. For instance I have heard people say, Jesus saves at the Commonwealth Bank. Trust is costly when relationships break down as they did in the Global Financial Crisis of 2008. That is when Bitcoin was started.

The person set a problem that required enormous computer power to solve and waited. If anyone took it up it took some time before an answer came. At that point two people had the answer and only they knew the answer. It was akin to the simple one on one transaction given earlier. Bitcoin operates like this today. Only the seller and the buyer are involved but it is not my computer talking to yours because each of us could renounce sale it it did. In Bitcoin  the sale is made openly  to everyone on a  Blockchain and all can see in real time what is occurring. 

Bitcoin apparently uses an much electricity as Ireland to solve about 30 processes a minute banks process 30,000 in the same period. Bitcoin is limited so my reading tells me because it is slow, it uses too much energy and it is limited in size. But something is happening.

Ethererium is the second largest Blockchain and maybe it has more future than Bitcoin. The thing varies in value every minute and it is possible to lose the shirt on your back with something evolving as blockchain is but new uses are being developed every day for it. Supply chains can track diamonds  every stage from mine to finger. An Australian woman owns this accepted method of management across the globe. Drugs, votes, music, you name it, almost anything can be tracked in real time using blockchain. It reminds me of the development of the computer.

Last week Facebook said it was going to introduce its own form of Bitcoin. It will. The Apps being developed on top of Ethererium will become as common as those used on your tablet or phone today. Just spend a little time learning where it is going and you might just keep up. I am trailing behind in my understanding.