What are Blockchains Good for? A UVA Data Science Professor Explains

It’s a term that many have heard but far fewer could define or explain its potential value: blockchain. Peter Alonzi, an assistant professor at the University of Virginia’s School of Data Science, set out to demystify this emerging technology in the latest episode of the school’s new video lecture series.

One key to understanding blockchain is appreciating the distinction between it and cryptocurrency, specifically bitcoin.

Bitcoin was created, Alonzi explained, with “the goal of giving people a system that they could trust” in the wake of the global financial crisis that began in 2008. In order for bitcoin to succeed, though, a distributed ledger had to be created, one that, critically, was decentralized. 

Theoretically, Alonzi said, in the early days of bitcoin if a user controlled most of the computers, that user could take over the majority of a network. “The way blockchains work, there is something that has to be done in order to gain control,” he said. “The goal of decentralizing is to make that impossible to achieve.”

If one were to look closely at the blockchain, one would see lines that connect the information from the transaction in one block to the hash – essentially the signature – of another block, building a long ledger that grants anyone with access to the blockchain the ability to review it. This transparency helps eliminate the potential for fraud or errors.  

So, where do blockchains go from here? The technology could have a variety of applications beyond cryptocurrency, such as in health care as a means of securely transferring patient data.  “There’s real promise,” Alonzi said, summing up its potential. 

But, he adds, there is a caveat. “Someone has to crack and change the way in which we do something,” he said. “It’s not enough to take one of those things from before, like health care, and do it all the same but store the data in a blockchain. You have to be looking for a way that the use of blockchain is revolutionizing and causing something to be done in a way that it was never done before.”