Blockchains used to trace blood diamonds

Blockchain, the technology that underpins Bitcoin, may be poised to inspire solutions to key societal challenges, offering help with everything from trading carbon emissions to maintaining health records. But only if the companies and developers involved can agree on things.

The blockchain on which Bitcoin is built serves as a distributed, cryptographically signed ledger that makes it possible track and verify payments without any centralized authority. The ledger is maintained by computers performing computations that eventually generate more bitcoins. The same distributed cryptographic approach can be used to verify all sorts of transactions.

Among other projects, Hyperledger has been helping De Beers, the South African diamond company, use a blockchain to track and distinguish legitimately acquired diamonds from those sourced from conflict regions. By carefully examining the blockchain data supplied with each diamond, it should be possible to identify suspect diamonds and fraudulent transactions. Others are looking at how blockchains could verify carbon-trading deals or serve as a framework for securing digital health records, Behlendorf said.

One of the big challenges with Bitcoin and blockchain systems is their technical complexity and related questions about security. Hyperledger is meant to help with this issue by offering technical guidance and leadership to the community involved with developing its technology. This is also meant to help with some of the infighting within the Bitcoin community that has arisen as a result of its decentralized nature, threatening to undermine the currency even as its value rises.