As cryptocurrencies attract more mainstream curiosity, blockchain—the technology that underpins these virtual currencies—has become the buzzword of the moment, with all manner of industries eager to tap its game-changing potential. Blockchain is a digital ledger comprising cryptographically linked data. Copies of this ledger are stored across a peer-to-peer decentralised computer network, and new data can only be added when all the nodes in this network are in consensus that a set of pre-agreed criteria have been met. This means data stored on a blockchain is very hard to tamper with.
The decentralised and secure nature of blockchain has piqued the interest of individuals and businesses seeking more autonomy and transparency in transactions, but the logic of the technology can be hard to grasp for the man in the street. Luckily for us, blockchain engineer Chua U-Zyn has an exceedingly simple definition. “My way of putting it takes away all the magic, it’s very down to earth,” he says with a laugh. “Blockchain is basically a database that’s distributed. That’s all. People think it’s magical, but it’s not.”
The founder of IT consulting firm Zynesis sticks to the same hype-free candour when potential clients ask him if blockchain can help their companies. “Usually my reply is, it doesn’t help at all. It’s just a database. It’s not going to change anything and in fact, it’s going to increase your operation costs, because you’ll have to hire blockchain engineers, who are very rare in Singapore.” That honesty is valued by those who seek his views, U-Zyn believes. “The hype will pass, and eventually blockchain will not be perceived as sexy anymore.”
But that doesn’t mean that it won’t have long-term impact. Since discovering bitcoin in 2011, U-Zyn has been intrigued by the concept of decentralisation that is central to the workings of cryptocurrencies. He started bitcoin exchange Dgtmkt in 2012, and has studied blockchain technology extensively, exploring and writing open source tools to help developers learn more about it.
As a Smart Nation Fellow, he undertook more research on how it could be applied. Imagine, for instance, a system for conditional transactions (sometimes called smart contracts) that is built on a blockchain, he suggests. “Vendors, offices and homes can have their smart devices plugged into this ecosystem. Say the milk in your fridge runs low. This system will be able to check which vendor has the cheapest price and most reliable track record for supplying milk; your fridge can make the decision to restock the milk, and it can pull cryptocurrency from a shared home wallet to pay for it. The milk will then be delivered without you having to do anything.”
Friction-free grocery shopping aside, the most exciting thing about blockchain is how it can facilitate an open and decentralised ecosystem where “anybody is free to enter and leave, and anybody is free to innovate on it without having to ask anyone’s permission”, U-Zyn asserts. “That’s how the internet came about. If the internet had been controlled by an authority, and anytime somebody wanted to start an e-commerce business, he had to apply for a license, then it would not be as successful as it is today. This is what I like about blockchain. I’m trying to bring these concepts of decentralisation and an open economy through blockchain to my clients. It can empower businesses and help spur a lot of innovation. So if you’re trying to create that kind of open ecosystem, then blockchain is for you. If you’re doing it just because it’s a buzzword and it sounds cool, then no.”
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