Program Report: Jeff Ward – Behind Bitcoin and Blockchain

Jeff Ward, Director of Duke University’s Center on Law and Technology, gave a presentation on the exciting and, to most of us, mysterious technology of blockchain.  Judging from the number of searches for blockchain and bitcoin on Google, there is a recent surge of interest by people who are trying to stay ahead of the curve of the next “technology big deal.”

Perhaps surprisingly, Jeff is not a “techie.”  In fact, before turning to law his background was in philosophy and literature.  Between graduating with a degree in Liberal Studies from Notre Dame and getting a law degree from Duke he worked for a global management firm in Chicago and taught high school English in the suburbs.  Now on the faculty of Duke Law School, he specializes in law and policy of emerging technologies such as blockchain, robotics and artificial intelligence.

Myth Number One:  According to Ward, blockchain (and its most famous offspring, the cryptocurrency bitcoin) was not invented by Satoshi Nakomoto in 2008. Instead, it emerged after decades of research in mathematics, cryptography and computers by fringe developers who hated centralized authority, especially central banks.

Myth Number Two: Blockchain and bitcoin are not just for the bad guys.  This, however, tends to be the focus of most media accounts.  Obviously, the anonymity of cryptocurrencies is useful in laundering money for transactions in narcotics and illicit gun sales.  But, hundreds of big companies, including the likes of Intel and J. P. Morgan Chase, recognize the potential of blockchain applications and are investing heavily in the technology.

Ward calls blockchain “the internet of value.”  Networks created by blockchain technology enable the transmission of value and assets without intermediaries (like banks.).  Instead, they are “peer distributed networks.”  Everybody in the network gets a “ledger” or “block.”  The blockchain is the technology that assembles all ledgers and records transactions between them.  Consensus is required for a transaction to occur.  There is no central entity holding an “official” copy of data.  Participants must agree that their ledgers are the same.  This, along with encryption, assures the security of transactions.

There remain many skeptics of blockchain technology.  Warren Buffett, for one, has cautioned that it creates no value.  Thus, sinking money in blockchain technology is gambling, not investing.  At Berkshire Hathaway’s 2018 stockholder meeting, he called bitcoin “rat poison squared!”

If you are still in the dark about blockchains after this garbled account, you can order Blockchain for Dummies from Amazon.

For the second week in a row, Rob Everett reached into his deep list of contacts at Duke to provide an excellent and entertaining program and introduce it to the club.

Submitted by Allen Cronenberg        

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