Advanced Blockchain Concepts

Privacy is discussed very frequently in the tech world—especially now that social media executives are grudgingly suiting up and being paraded in front of US Senate committees.

At the same time, as blockchain advocates are happy to see this technology advancing human welfare and decentralizing money transfers, it's natural to wonder whether a user can actually have any privacy, what with all transactions being public on the chain.

In this chapter, the following topics will be covered:

• Blockchain as a tool for corporate governance
  • Unbanked companies
  • The DAO
• Social-purpose uses of blockchain
• Privacy concerns within the context of the social purpose of blockchain
• Zero-knowledge crypto-systems as a solution to privacy concerns

Blockchain and banks

Privacy is sorely needed in the cryptocurrency ecosystem. Cryptocurrencies could help raise people out of poverty in developing countries and boost economies with increased money transfers—or they could be a way for oppressive regimes to track down every transaction and have more opportunities to accuse innocents of wrongdoing.

The appeal of blockchain technology to people with antiauthoritarian streaks is obvious. Many in the US have a bone to pick with the banking system. In the thirties, the Federal Housing Administration, which insures mortgages, drew maps of areas in which it would do business, excluding poor and minority communities. This practice continued for a generation, and it was devastating to the core of many American cities, destroying hundreds of billions of dollars in wealth:

More recently, the 2008 global financial crisis resulted...

Summary

Blockchain is a transformational technology with an impact similar to that of the internet, vaccinations, or powered flight: the social implications are extensive, subtle, and perhaps in some ways pernicious. It has the potential to further degrade privacy, drastically improve corporate governance, or lift billions out of poverty. The specific application of this technology will define it as a tool that will help to shape the world.

In the next chapter, we will discuss some applications of blockchain, starting with the most fundamental of them, cryptocurrency wallets.