Standard Kepler CTO Johnny Au Yeung recently shared with Information Age our thoughts on the key value proposition of blockchain technology, and the role this technology may come to play in the financial sector. In this interview, Mr. Au Yeung had the following to say on the core value proposition of blockchain:
In the digital world, there is an inherent lack of trust when two parties want to conduct a value exchange. After all, transactions are nothing more than digital entries on a ledger, and since data is relatively easy to create and modify there is a need from all parties involved to verify the authenticity of the data that is sent and received, so as to avoid occurrences such as double spending. But what exactly is digital “authenticity”?
Who is to say that this piece of data is the original, and that piece is a copy? One only needs to look at the uphill battle fought by content creators in establishing ownership over digital goods to understand the challenge at hand.
Continuity, having only one continuous truth, and authenticity are two closely related concepts. There is a real lack of continuity in the digital world, and without continuity there can be no trust. Being able to state, with absolute certainty, that “this block of data is the original, and it has been passed from person A to B since its inception, and now rests with person C” is crucial, as it enables the ideas of ownership and identification.
With ownership and identification of both individuals and things established, we can then conduct digital value exchanges. The way in which the world currently attempts to solve this continuity problem is via intermediaries such as banks who can inject the continuity that the virtual lacks by verifying individuals, things, transactions and ownership. But this is a very inefficient process of establishing trust, which in turn drives up transaction costs.
To read the full interview, click HERE.