The Three Pillars of Blockchain: Creating Systems Upon Systems
by Josh Anderson
MONTRÉAL, QUÉBEC – Regardless of your feelings on blockchain, it’s difficult to ignore the impact that it is having on the tech world. And when you zoom into a particular market, such as Québec, it’s not hard to see why blockchain-based applications are taking over all of the conversations in the data center space.
However, many insiders in the industry, even in Québec, still have a lot to learn about this revolutionary technology. And that’s why Laurent Féral-Pierssens, Partner at Inception Block Ventures | Blockchain Advisory, KPMG Canada, offered up some salient “Blockchain 101” at CapRE’s Canadian Digital Transformation & Green Energy Innovation Summit last week, explaining that there are three key aspects of Blockchain that make it so innovative – distributed ledger technology and, as listed below, crypto-assets as well as smart contracts.
“Now who has children that are gamers, or perhaps who here is a gamer?” he asked the room, with a chuckle. “Think about this. In your favorite game, you need a credit card because you want to buy a $20 virtual sword. The company can create and print and destroy as many as they want. However, for gamers, it’s obvious that this sword exists, because I’m going to use it in my game.”
According to Féral-Pierssens, what Blockchain allows for is a company to “print” one of those sword as a digital asset, but make it secure. “And now you know there is only one of those objects that exists. Or 200 or 200,00,” he shared. “It’s now a virtual tangible asset. That’s what the crypto-assets create. This is mind-boggling. It’s an innovation in and of itself. Think of that sword. It actually exists, and there’s only one that you own and can transfer to someone else.”
Another innovation is smart contracts. “Now who has heard of that?” he asked the room, knowingly. “Well, I’m sorry, it’s neither smart nor a contract. But that’s what it is. It basically creates a way to code the way that the ledger would be handled. A ledger is just an account.”
“Think about your bank account,” Féral-Pierssens mused. “You open a bank account for your daughter. I have a seven-year-old daughter. I go to the bank, I open an account for her, and I want to set up some “if X, then Y” conditions. Imagine that I log in to that bank, and say, if this transaction is greater than 50 dollars, then ask me about it. That’s code. I can basically code into the account how a transaction should behave.”
“Right now smart contracts are used in insurance. They’re used in supply chain. They’re used in plenty of different use cases where we have automation,” continued Féral-Pierssens. “Now, we’re all technologist in some ways. So, what do you do with a database, an incentive and a smart contract? You create systems. Well, Bitcoin and Blockchain have different types of systems on the Internet – and it’s a very different type of Internet.”
“When we go into our companies we have an Intranet – we have to login with a password. Or an Extranet. Those are different configurations,” he mused. “And it’s the same thing with Blockchain. It’s not the same network – it’s different networks with different properties. There’s a public network, everyone can access it. But there are private blockchains that are used within different organizations. This is really the basis of what Blockchain innovation is.”
For more coverage of this panel, check out an earlier CapRE Insider Report: Laurent Féral-Pierssens Talks Three Pillars of Blockchain at Canadian Digital Transformation Summit