What is blockchain?

What is blockchain?

You’ve heard about it, maybe in relation to a digital currency like bitcoin — but what is blockchain and how does it work? On the latest gig of Too Embarrassed to Ask, Circle CEO Jeremy Allaire answered all our questions and yours.

Let’s embark with payments: Right now, it’s effortless to send people money online, but how we send that money is tied to institutions like credit cards and banks. Circle and its competitors want to use blockchain to suggest their users a more open alternative, which wouldn’t tie currency down to anything.

“The payments world today is a lot like where we were twenty years ago with how communications worked on the internet,” Allaire said. “You could get to content online, you could dial up to a service like AOL and there was all this content on there and that felt like a lot of information to people: ‘There’s more information than I’d ever need here!’ And it felt like, I could communicate with someone through an email if they had an AOL account, and so on.”

“The world of money is sort of similar,” he added. “We have all of these closed networks. If you happen to have PayPal, then you can use PayPal. If you happen to be in another country, it might be a fully different system and it might be administered by a government agency or by a consortium of banks.”

He extended the AOL-to-present analogy further by arguing that once we are able to “pay anyone, anywhere with whatever,” we’ll realize presently hidden opportunities for the web.

“I think it was hard for people to imagine free, instant global communications twenty years ago,” Allaire said. “People thought, ‘I don’t indeed send international letters all that often, that’s fine,’ or, ‘I don’t make a lot of international phone calls or even long-distance phone calls.’ I think there’s latent aspirations; people don’t realize, once they have something that’s a fully frictionless, open, global thing how broadly the utility of that thing increases.”

However, blockchain does not have to be tied to currency. Rather, Allaire said, the technology — which establishes a permanent record of something, maintaining that record via a decentralized network of users — has massive implications for everything we want to keep track of.

“How do I prove that I own a house?” he asked. “Well, I have this chunk of paper called a title and that’s a social construct. That title is something that a record-keeping agent keeps. We say, ‘Okay, the city clerk is the record-keeping agent for a title on a house.’”

“The blockchain innovation indeed permits us to take everything where there’s trust around record-keeping and it permits us to make that digital, immutable, permanent, global and auditable,” Allaire added.

So, one example might be property ownership. But another might be our identities or how we have voted in elections. Allaire said these applications of blockchain would be hacker-proof because no one would be able to switch the records without a massive amount of computing power, enough to override all the other people in the network.

“There is no open mechanism for us to control our identity and for trusted third parties to add fragments or attributes to our identity, and for us to then carry that around the world and interact and authenticate with it,” he said. “Voting is just a record-keeping system of choices. It would be fine if we had tamper-proof systems, and obviously latest events make that feel more significant.”

Have questions about blockchain that we didn’t get to in this gig? Tweet them to @Recode with the hashtag #TooEmbarrassed, or email them to TooEmbarrassed@recode.net.

Be sure to go after @LaurenGoode, @KaraSwisher and @Recode to be alerted when we’re looking for questions about a specific topic.

If you like this showcase, you should also check out our other podcasts:

  • Recode Decode, hosted by Kara Swisher, is a weekly demonstrate featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Google Play Music, Spotify, TuneIn, Stitcher and SoundCloud.
  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with fresh scenes every Thursday. Use these links to subscribe on Apple Podcasts, Google Play Music, Spotify, TuneIn, Stitcher and SoundCloud.
  • And eventually, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Google Play Music, Spotify, TuneIn and Stitcher.

If you like what we’re doing, please write a review on Apple Podcasts— and if you don’t, just tweet-strafe Kara and Lauren. Tune in next Friday for another scene of Too Embarrassed to Ask!

Subscribe to the Recode newsletter

Sign up for our Recode Daily newsletter to get the top tech and business news stories delivered to your inbox.

What is blockchain?

What is blockchain?

You’ve heard about it, maybe in relation to a digital currency like bitcoin — but what is blockchain and how does it work? On the latest scene of Too Embarrassed to Ask, Circle CEO Jeremy Allaire answered all our questions and yours.

Let’s commence with payments: Right now, it’s effortless to send people money online, but how we send that money is tied to institutions like credit cards and banks. Circle and its competitors want to use blockchain to suggest their users a more open alternative, which wouldn’t tie currency down to anything.

“The payments world today is a lot like where we were twenty years ago with how communications worked on the internet,” Allaire said. “You could get to content online, you could dial up to a service like AOL and there was all this content on there and that felt like a lot of information to people: ‘There’s more information than I’d ever need here!’ And it felt like, I could communicate with someone through an email if they had an AOL account, and so on.”

“The world of money is sort of similar,” he added. “We have all of these closed networks. If you happen to have PayPal, then you can use PayPal. If you happen to be in another country, it might be a downright different system and it might be administered by a government agency or by a consortium of banks.”

He extended the AOL-to-present analogy further by arguing that once we are able to “pay anyone, anywhere with whatever,” we’ll realize presently hidden opportunities for the web.

“I think it was hard for people to imagine free, instant global communications twenty years ago,” Allaire said. “People thought, ‘I don’t truly send international letters all that often, that’s fine,’ or, ‘I don’t make a lot of international phone calls or even long-distance phone calls.’ I think there’s latent aspirations; people don’t realize, once they have something that’s a downright frictionless, open, global thing how broadly the utility of that thing increases.”

However, blockchain does not have to be tied to currency. Rather, Allaire said, the technology — which establishes a permanent record of something, maintaining that record via a decentralized network of users — has gigantic implications for everything we want to keep track of.

“How do I prove that I own a house?” he asked. “Well, I have this chunk of paper called a title and that’s a social construct. That title is something that a record-keeping agent keeps. We say, ‘Okay, the city clerk is the record-keeping agent for a title on a house.’”

“The blockchain innovation indeed permits us to take everything where there’s trust around record-keeping and it permits us to make that digital, immutable, permanent, global and auditable,” Allaire added.

So, one example might be property ownership. But another might be our identities or how we have voted in elections. Allaire said these applications of blockchain would be hacker-proof because no one would be able to switch the records without a massive amount of computing power, enough to override all the other people in the network.

“There is no open mechanism for us to control our identity and for trusted third parties to add fragments or attributes to our identity, and for us to then carry that around the world and interact and authenticate with it,” he said. “Voting is just a record-keeping system of choices. It would be fine if we had tamper-proof systems, and obviously latest events make that feel more significant.”

Have questions about blockchain that we didn’t get to in this gig? Tweet them to @Recode with the hashtag #TooEmbarrassed, or email them to TooEmbarrassed@recode.net.

Be sure to go after @LaurenGoode, @KaraSwisher and @Recode to be alerted when we’re looking for questions about a specific topic.

If you like this demonstrate, you should also check out our other podcasts:

  • Recode Decode, hosted by Kara Swisher, is a weekly demonstrate featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Google Play Music, Spotify, TuneIn, Stitcher and SoundCloud.
  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with fresh scenes every Thursday. Use these links to subscribe on Apple Podcasts, Google Play Music, Spotify, TuneIn, Stitcher and SoundCloud.
  • And eventually, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Google Play Music, Spotify, TuneIn and Stitcher.

If you like what we’re doing, please write a review on Apple Podcasts— and if you don’t, just tweet-strafe Kara and Lauren. Tune in next Friday for another scene of Too Embarrassed to Ask!

Subscribe to the Recode newsletter

Sign up for our Recode Daily newsletter to get the top tech and business news stories delivered to your inbox.

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