Say you want to buy tickets to a sold-out Red Sox game. Would you send money over the Internet to buy them from a random stranger? Of course not, because you could wind up with no money and no tickets. So you pay a fee to a ticket broker. We use such middlemen all the time to create trust for our online transactions, just as we use banks, ticket agencies, and government departments in the physical world. Such services exist for important reasons, but they cost consumers billions of dollars.
Enter blockchain, the technology that underlies the bitcoin digital currency whose wild jump in value created a sensation last year. On a blockchain network, computers work together to verify transactions and prevent them from being altered or reversed once they are complete. A blockchain also keeps a record of every activity it facilitates, as if you were noting purchases on the back of a 20-dollar bill. This record guarantees that a bitcoin, or any other online currency, is not counterfeit, won’t virtually vaporize, and can’t be kept and spent again.
Such reliability means blockchain and related technologies could be good for a lot of things. Take your Red Sox seats. With blockchain, you could buy digital tickets from anyone and know that they were valid. Even better: goodbye, “service” fee.
Companies large and small are working on ways to use blockchain to change more than just the way we shop. Here’s a sampling of what Boston-area startups are developing.
Circle, based in downtown Boston, makes it as easy to safely send money to other people as it is to send a text. Its Pay app converts your dollars into a blockchain-based “cryptocurrency” for secure transfer, and converts it back to dollars, or if the recipient prefers, euros or pounds sterling (with no exchange fee or commission). The company’s rapid growth has made it one of Boston’s most valuable startups.
Boston-based Voatz believes it can use blockchain to boost turnout at the polls, keep lines short, and eradicate any whiff of voter fraud. Because blockchain transactions create an indelible record, elections on the company’s platform are easy to audit. Voatz says its technology prevents duplicate votes in the same way a bitcoin can’t be duplicated. Hopkinton Town Meeting used the platform for voting in May, West Virginia let military personnel deployed elsewhere vote via Voatz in primaries this spring, and it was how Tufts students elected their student government last fall.
Storing your data
Lots of us now pay some big tech company to store photos, music, videos, and other files in its cloud (or we get irritated about constantly being asked to). Boston’s Nebulous uses blockchain to let you spread your files around its Sia Storage Platform, a network of people’s personal computers with 4,500 terabytes of capacity. Think of it as the Airbnb of file storage — Sia uses blockchain’s encryption to give you a unique key that prevents anybody else from seeing your files, and for backup purposes stashes a minimum of 10 copies of each file around its network.
Paying for performances
Musicians and other performers who stream their creations on services such as YouTube have to share a slice of their proceeds with their hosts. LBRY in Manchester, New Hampshire, uses blockchain to offer an alternative streaming service that charges artists less.