In the 1990’s, the internet led to a communication and information revolution that was unparalleled in human history. It became possible to communicate instantly and publicly share information with anyone in the world who also had an internet connection. The blockchain is a new technology, a next generation of the internet, that is causing an equally disruptive financial revolution that will have a powerful impact on industries as diverse as with the introduction of the internet.
The best way to explain a blockchain is to start with an explanation of bitcoin, a digital token, that has grown to a market cap of over $10 billion since its inception in 2008. In the same time period, the price of a bitcoin has risen from less than a cent in 2008 to over $900 today. An analogy is that bitcoin is to e-mail as the blockchain is to the internet.
Introduction to Bitcoin
E-mail was revolutionary because it was the first way to instantly and verifiably send data to anyone else in the world for free, with both parties able to keep a copy of the data sent in the email. The fact that both parties keep a copy of the emailed data is an inherent flaw with an online transfer of value, as both parties have the value. We therefore require that a trusted third party, such as a bank or clearinghouse, ensures the value is not double spent. Bitcoin is the first internet protocol where two parties can verifiably and instantaneously transfer value to anyone with an internet connection and address, without the need of a trusted third party.
Introduction to Blockchain
The blockchain, similar to the internet, is the technology that makes this verifiable transfer of value possible in a distributed network. Approximately every ten minutes, a block of bitcoins are awarded as a prize to a mining pool that is cryptographically linked to all the previous blocks in the chain. Each block contains cryptographic proof of each bitcoin transaction, including the sending address, the receiving address, the amount of bitcoin and the transaction time. In this way, the blockchain is a public book of records of past value exchanges.
Today, there is a different blockchain for each digital token and each blockchain only contains a record of transactions for its native cryptocurrency, but sidechain interoperability between blockchains is being developed by companies like e-bit.io, which builds more functionality into the blockchain. In the future, it is possible for the sale of a house, stock, event ticket, and taxes, to be automatically executed with a smart contract and recorded on a blockchain.
Introduction to the Blockchain Education Network
The best way for students to get involved in this growing industry is to join the Blockchain Education Network, a global non-profit network or blockchain enthusiasts. Affectionately referred to as BEN, the organization hosts global events that local leaders can choose to participate in.
In September 2016, the organization hosted a Bitcoin Airdrop, where any region leader could give out bitcoin to everyone who attended their first regional meeting. In October 2016, they crowdsourced Blockchain Education Month and developed a syllabus to learn about the intricacies of the blockchain. November 2016 is dedicated to an accelerator called the Blockchain Gauntlet, that connects hackathon projects developed throughout the month with industry experts and VC’s who can take student projects to the next level.
To participate in the Blockchain Gauntlet, region leaders are hosting local hackathons and hacknights to encourage their peers to develop blockchain applications. In Toronto, the U of T Decentralized Tech Association, the Blockchain Education Network, Distributed ID and MLG Blockchain Consulting are supporting Chami Akmeemana, the FinTech advisor to the OSC LaunchPad, on RegHackTO, the first hackathon in Canada by a securities regulator. A complete list of events can be found on the Blockchain Gauntlet website.
Stepan Vorobiev, the founder of the U of T Decentralized Tech Association said in a quote that, “RegHack is at the intersection of the traditional world of securities trading regulation and the new world of blockchain based applications. Our team is very excited that the OSC is showing its entrepreneurial spirit, and we appreciate this opportunity to partake in the evolution of securities markets.”
Anyone from McGill and the Montreal community that wants to get involved in the blockchain, FinTech, and RegTech industry are encouraged to get in touch with Michael Gord, recent McGill alumni, the director of operations at BEN and the founder of MLG Blockchain Consulting. The best way to reach him is by email at [email protected].