From December 1-3, 2017, the first Telekom Blockchain Hackathon will take place in Bonn. But what exactly is this “Blockchain” that everyone is talking about? The technical details of blockchain technology seem to be something that only few people are interested in thinking about (that makes it a little like data security). And yet, blockchain technology has the potential to change our lives as profoundly as the Internet has. John Calian, who since June has been responsible for Deutsche Telekom Group's blockchain activities, explains this potential in an interview – with almost no technical language.
The inner workings of blockchain technology has sparked very little excitement to date. Why is that?
John Calian: We have tended to concentrate too much on the technical aspects of blockchain technology. And they can be complicated. We don't need to take that approach, however. Just think of smartphones and laptops, for example. Most of us aren't really interested in how they work – we just want to be able to use them and profit from their convenience.
How would you describe in nontechnical terms?
John Calian: It's all about decentralization, which people tend to find counterintuitive. When you look around, just about all the human-built structures you see – banks, supermarkets, schools, etc. – are centralized. With blockchain technology, we can decentralize all kinds of processes.
John Calian: Voting is one example among lots of others. Normally, we have a central authority that handles all aspects of the voting process, including registering voters, checking voter eligibility, counting votes and announcing election results. The blockchain approach to voting could look like this: Voting is online. Each voter places a transaction (their vote) in a "block," which is a data set that records his or her vote. All of these blocks go into a chain, which can be thought of as an enormous list with countless pages. The transactions, or votes, are encrypted, and then the blocks in the chain are linked via additional encryption techniques. All data exchange of relevance to the basic process is recorded in blocks, and thus the chain can keep growing. The entire chain is accessible for all participants in the process – in this case, all voters. The chain is a transparent voting record that cannot be tampered with, because all its blocks are linked and because it is stored at a multitude of different locations. Blockchain technology thus promotes trust.
Could you give us a concrete example of how it does this?
John Calian: Let's say I go to eBay in order to buy a snazzy accessory for my mountain bike. Normally, I simply have to trust that the seller is going to deliver the accessory I've purchased, and the seller has to trust that I am going to pay. Needless to say, he and I don't know each other and thus don't have any history to build on. With blockchain technology, our transaction, including an automatic user rating, would be thoroughly recorded and reviewed from A to Z, by fully transparent means. Our block would be reviewed by "miners," computer specialists working with a distributed computational review process. Once approved, the block would be linked to the previous block in the chain, via a cryptographic technique. All of this would happen within minutes, and – this is very significant – it would not depend on any one person. The transaction would be validated by the "miner" – a node in the decentralized system – that gets to it quickest.
Future Blockchain Hackathon December 1 – 3, 2017 at the Telekom Design Gallery, Friedrich-Ebert-Allee 140 in 53113 Bonn, Germany
More information here.
But now we do have to get technical for a moment: How does the record-keeping process work?
John Calian: Blockchain technology makes use of software that creates two keys for each user, namely a public key and a private one. A bank account uses a roughly similar pair of keys: the public key is the account number, and the private one is the PIN number that goes with the account. When I want to carry out a relevant action – such as making a transfer to pay for my mountain bike accessory or casting my vote in an election – I use my private key to enter the required information into the system. The public key, which is visible to all network participants, enables all participants to see what I have just done.
How could blockchain be useful for Deutsche Telekom?
John Calian: Figuring that out is what I'm currently doing. Roaming provides a useful, easy-to-understand example in this context. To date, telecommunications companies record and manage their roaming data (i.e. in the context of roaming relationships with other companies) by means of extensive database lists. The resulting information and payments flow through intermediary companies that charge for their transaction services. Blockchain technology could potentially do away with such intermediaries, and inefficiencies, because all companies would have access to all roaming data. It would thus streamline such payments and remove the "man in the middle." Of course, we are constantly surveying how we could make use of blockchain technology at Deutsche Telekom.
John Calian is the Vice President of The Blockchain Group and the Co-lead, Head of the Telekom Innovation Laboratories (T-Labs), in Berlin. In this dual role, John is responsible for developing and leading innovation topics, including blockchain strategies and initiatives, for Deutsche Telekom and its partners. Prior to joining T-Labs, John held numerous technology leadership roles and was the founder and COO of multiple startup software firms in the Seattle area.