Pearman: blockchain possibilities endless

Make text smaller Make text larger

  • Noel Pearman

    Noel Pearman


With the use of everyday analogies, the concept and possible applications of blockchain were brought into focus at the second annual XL Catlin Cyber Seminar.

A short history of the evolution of blockchain and its possible future was presented by Noel Pearman, Bermuda professional lines underwriter and cyber product lead at XL Catlin.

He admitted that while the impact of digital ledger technology commonly referred to as blockchain will be big, it is difficult to know exactly how big and transformational it will be.

Mr Pearman drew an analogy of where we are today with blockchain to where early internet users were in 1990 when the first webpage was published.

Displaying an image of the original webpage, he described it as: “No colours, just text, no pictures. This was put out there in 1990, seven years after the internet started.

“The people who did this webpage knew they were onto something big. They knew that the internet was going to be amazing.”

But he said they could not envision the things that were to come, such as Google Maps, Facebook, and Uber.

“They couldn’t see any of that stuff, but they knew that while they were putting this together it was going to be big and change everything.”

Completing the analogy, he said: “1990 internet is 2017 blockchain. This technology is here and we understand that it is going to be amazing and change everything, but we simply cannot see that — how it is going to change everything.”

Despite the uncertainty of where blockchain might eventually lead in terms of transformations and applications, Mr Pearman explained its fundamental attributes.

Using another analogy, he likened blockchain to the role of the Microsoft Windows operating system on computers.

“It creates an environment for other applications, It sets the rules.

“We rely on applications [running] on top of Windows to get the real work done. The operating system does not help you to write e-mails or excel spreadsheets or surf the web. It creates a framework for those things to happen.”

He said that was the type of relationship that exists between blockchain and the digital currency bitcoin, the most well-known application using blockchain technology.

“Blockchain is a framework. It’s a system of doing transactions and having people work together and that provides an opportunity for applications to sit on top of that framework.

“In short, blockchain is a database system. It’s a cache of records.”

Mr Pearman said blockchain has four unique and interesting qualities, listing them as:

• It is public, “where everyone can see it, and nothing is done in the dark”.

• It is secure, being unhackable, immutable and safe.

• It is synchronised. Mr Pearman said: “It’s up to date at all times. It’s real time.”

• The network is distributed and not centralised. Describing this, Mr Pearman said a centralised model can collapse if something happens to the central computer, or a fraud takes place on the central hub and propagates outwards through the entire system.

“But in the distributed model there is no centre, it is a system monitoring itself in order to regulate itself.

“These four things create a phenomenal dynamic that is going to change how transactions happen and how they work.”

He said there were two things that are supremely important about blockchain. Firstly, the database system takes a bunch of transactions and packages them into blocks.

“Every block incudes a reference that points to the previous block in the chain — so it’s as if they are linked in a chain. Hence the word blockchain.”

Benefits that result are the elimination of the middleman, along with the accompanying additional time, cost, friction, errors and potential fraud. Why is the middleman eliminated? Because everything on the network is confirmed by everything else.

The second key thing blockchain does is overcome the “copy problem”.

Giving another example, Mr Pearman described how we have become used to trading and distributing digital items, such as document files and photographs.

When we send them to another person, they are generally copied so we retain a copy and the recipient has an identical copy. In theory an unlimited number of copies could be further distributed and copied.

Mr Pearman said that when it comes to digital currencies, like bitcoin, the copy problem would be called a “double-spend problem” as people shared copies of digital cash tokens and tried spend them. However, blockchain prevents a piece of digital cash being present in more than one location simultaneously.

“It allows us to track something digitally, and in the case of a digital wallet it means that I can send something electronically to you, but I no longer have it. There aren’t two copies of it. That digital asset only exists in one place, and it can be verified.

“That’s the big change that blockchain brings. It is unhackable, repeatable and visible to everyone, and that changes everything.”

Looking ahead to potential applications for blockchain, Mr Pearman spoke about digital passports that can be verified everywhere, and incorruptible title deeds and home repair records

He also suggested that blockchain-enabled digital IDs could have a transformational impact on voting systems.

And focusing on the insurance industry, Mr Pearman said: “We are coming to a new era of how transactions are done and how trust is done in the transaction space. This is big, it is going to change what happens with data.

“When you set up a blockchain with intermediaries, the broker can get the same copy of everything to everyone.

“With blockchain there is a set records that eliminates all the questions of what was agreed on and what wasn’t.”

He added: “The possibilities are endless.”

You must be registered or signed-in to post comment or to vote.

Published Dec 7, 2017 at 8:00 am (Updated Dec 6, 2017 at 11:46 pm)

Pearman: blockchain possibilities endless

What you
Need to
Know
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon

  • Take Our Poll

    Today's Obituaries