This past April, I had the privilege of attending The Business of Blockchain event that was put on by the MIT Media Lab in Cambridge, MA. The event was a one-day conference examining the technology, ethics, and impact of blockchains. If you are a reader of our blog, you know that CRT has been focusing on practical use cases for blockchain in real estate over the last year and half.
The goal of the event was to meet pioneers in the field, gain business advantages by learning more about the technology and ultimately learning to separate real opportunities from the hype. This event was incredibly useful as it helped clarify which changes blockchain technology will be making immediately and what’s still far off in the future. A reoccurring theme of the day was how blockchains can help provide and guarantee security, identity, and ownership while still operating at the speed of the internet.
Recently, MIT has published videos from the event and I would like to share three of my favorites as well provide my key takeaways from each talk.
Blockchain: Unlocking the Power and Potential
|Brian Behlendorf is executive director of the Hyperledger Project. Behlendorf was a primary developer of the Apache Web server, the most popular Web server software on the Internet, and a founding member of the Apache Software Foundation. He has also served on the board of the Mozilla Foundation since 2003 and the Electronic Frontier Foundation since 2013.
|From the video:
- Brian shares the exact moment of when he realized the potential for blockchain technology. His “Ah-Ha” moment came after hearing of a land title project in Honduras that was being started to protect land ownership through decentralization of records.
- In recent history, the digitization of systems has led to the centralization of systems. Brian explains how permissioned ledgers can begin to re-decentralizing how these systems work.
- Brian then goes on to describe the opportunity and benefits that will come from the transformation of the traditional hub and spoke models to ledgers, and specifically how the roles of intermediaries in those models will shift over time.
What Could Go Wrong? When Blockchains Fail.
Emin Gün Sirer, Cornell University
|Emin Gün Sirer is an associate professor of computer science at Cornell University. His research interests span distributed systems, security, and operating systems, with a particular emphasis on digital currencies and self-organizing systems. He runs the popular blog Hacking, Distributed.
|From the video:
- Emin Gün talks about what can happen when people and companies apply blockchains in a manner that is at odds with the science that is behind them. Setting the stage for his talk, Emin covers the history of how civilizations track wealth as well as how validity, immutability and apply to blockchains.
- In recent years there have been a number major failures based on poor implementations. Emin goes into detail about the attack on the Ethereum based smart contract, The DAO, and how it was exploited for over $50 million dollars.
- Emin warns audience members who are interested in running private permissioned technologies. These systems are built relying heavily on the fact that the network will be resilient to attack as long as the nodes fail independently.The problem here that many implementations that we are seeing today have every node on the network running the same code, making them al susceptible to the same vulnerabilities. Emin suggests the concept of N Version programming as a possible solution.
Transformation at Scale: Building Tomorrow’s Financial Markets Today
Amber Baldet, J.P. Morgan
|Amber Baldet is the Executive Director, Blockchain Program Lead at J.P. Morgan. Established in 2015, J.P. Morgan’s Blockchain Center of Excellence sets a comprehensive blockchain strategy for the Corporate and Investment Bank, while also developing cutting edge technology, curating Strategic Investments, and performing client outreach.
|From the video:
- Amber explains what the future of JP Morgan’s client services could look like and what that means for their product offerings.
- She goes on to explain how even though her company is focused on investment banking applications, they must be built with the same ethical design standards as blockchains inorder to avoid very imbalanced systems.
- Amber finishes her presentation with a quick overview of JP Morgans first open source software product, Quorum, that allows for private and secure transactions on a public ethereum blockchain.
If you are interested in learning more, click here to view all the videos from the Business of Blockchain Event. I’ve also included links to all of NAR’s research below.
Want to know more about Blockchain? Dave’s been doing a lot of great research, and on Facebook Live Office Hours, he told us about what Blockchain is and why NAR is researching it. As always, to watch us live, like our Facebook Page and tune in on Fridays at 3PM Eastern!
Office Hours: Blockchain from CRTLabs on Vimeo.
CRT Labs was launched in August 2015 with the purpose of educating the REALTOR® membership about emerging technologies that could have a potential impact on the real estate industry. Since then, we have strongly advocated for proper security and privacy in today’s smart home, developed fantastic educational material for REALTORS®, and designed innovative and affordable solutions for monitoring indoor air quality.
Today, we are excited to be discussing blockchains, which we feel have countless applications for use in our industry. The purpose of this blog post is to give a basic explanation of what blockchains are, how they differ from traditional database models, and to provide an update on NAR’s research.
What Are Blockchains?
Blockchains are digital ledgers that are shared among a distributed network of computers and interested parties. These digital ledgers are permanent and tamper-proof because the underlying technology allows each participant on the network to interact with the ledger in a secure way without the need for a central administrator.
While that might sound complex and a bit difficult to understand, the basic idea behind blockchains is actually pretty straight forward.
This digital record of events, or ledger, maintains a continuing growing list of ordered entries called blocks. Each block is linked to the next in chronological order and contains cryptographically secured information that links it to the previous block (like a chain). This allows for information to be added to the ledger in a manner that is impossible to alter retroactively.
What Are the Benefits to Blockchains?
Beyond the fact that they are tamper-proof by design, there are many other advantages to using blockchains instead of traditional databases in your applications.
Some of the key benefits:
- Each participant retains its own copy of transactions, as ledgers are not centralized and can not be controlled or altered by a single party.
- Blockchains allow for smart contracts, meaning the ledger itself can be programmed to trigger transactions automatically based on predefined, software-based clauses.
- Decentralization of the data removes any single point of failure.
These benefits are often overlooked due to skepticism surrounding early blockchain applications involving digital currencies like Bitcoin. Although Bitcoin is the most successful example of a blockchain application, it is important to not equate the two.
Bitcoin uses blockchain technology, but Blockchains ≠ Bitcoin.
Why Is NAR Focusing on Blockchain Research?
Personally, I believe blockchain has the potential to be one the most impactful technologies of the next few decades. I also predict we will begin to see more and more blockchain-based applications enter the mainstream real estate industry in next few years. After financial tech and supply chain management, the real estate market will be the target for entrepreneurs trying to disrupt traditional business models.
CRT Labs believes that smart contracts could greatly reduce the cost of doing business. The automated checks and balances these smart contracts provide will help REALTORS® and their clients get to the closing table faster and with less risk involved. We are also beginning to see the public sector getting involved. Chicago’s Cook County is testing Blockchain-Based Property Title Transfer which could help protect rights to property ownership records.
NAR’s short term goals are to create practical, open source blockchain applications that highlight the positive aspects of the technology that can also be used as case studies by our industry partners. Our first project uses blockchain to provide an improved method of sharing membership engagement levels (committee service, education history, CE Tracking) across all local, state, and national levels of the association. We are hoping that this initial work will help lay the groundwork for adoption of more high-impact projects in the future.
NAR’s Progress To Date
Since September 2015, NAR and CRT labs have:
- met with NAR committees, advisory boards, and industry partners on over twenty occasions to discuss the potential of this new technology
- published two white papers ( 1, 2 )
- released the source code for the prototype that what will soon become our membership engagement tracker.
Over the next few months, I will be speaking at three conferences on this topic:
CRT Labs and NAR also plan to continue developing and sharing practical blockchain solutions.
With CES coming up this week, there is bound to be a lot of talk about the future of technology on all your favorite blogs. Here in the lab, we decided to give a stab at what we see happening in 2017 in smart homes, renewable energy, and more!
Now that Google Home has hit the ground running, I predict this year the company will integrate its popular home assistant into their mesh network platform, Google Wifi. Each router will act a lot like an Amazon Echo Dot, but bring in the added mesh networking capabilities. Right now, a 3-pack of the routers costs $299, with additional units costing $129 (the same as a Google Home); however, I believe the company will introduce a smaller router, without the ethernet ports and with tiny speakers, at around $69 to compete with the $49.99 Echo Dot. Google’s goal is to get an assistant in every room in order to control your smart home. They’ve already pulled ahead of Amazon with their multi-room support, which not only has intelligent voice detection to allow you to only interact with the Google Home closest to you but also allows you to control playback on other Google audio devices in other rooms. Of course, for Google to control your whole home, they’ll need to expand compatibility, but since their API opened to the public at the end of 2016, both third party and native support for devices will be coming in 2017.
After solar shingles, there will be solar siding and solar window offerings for traditional consumers. This would mean that homes wouldn’t need consistent direct sunlight to harvest energy. Homes in traditionally less-sunny places could harvest solar as effectively as homes in the southwest. Home energy battery storage will make this an even more viable option as batteries look less and less like batteries and more like traditional appliances. Cities will also begin implementing systems that aren’t one type of energy harvesting. Solar, wind and hydropower will take great steps to become prominent in large and small cities. Cities will find creative ways to gather energy from these three methods that are both practical and aren’t highly visible. Portland is already generating hydropower using its water mains. Expect smaller form factors in all three areas for ancillary energy harvesting. Solar sunflowers and wind trees are examples we may see deployed on boulevards and parks in 2017.
In the managed smart home arena, we’ll see the telecommunications companies continue to grow in importance, and many of the “closed” managed smart home systems will loosen some of their restrictions, allowing consumers to bring their own devices. In order to secure the increasing number of internet-connected devices, the government will get involved in encryption and security requirements. Open-source software will continue to be incredibly important. Open-source distributed ledger applications such as Hyperledger and Corda will be among the first widely-used Blockchain apps, and open-source tools will also become increasingly important to journalists and citizen activists. Voice control, artificial intelligence, and deep machine learning will continue to redefine our relationship with devices, and self-driving trucks will disrupt the trucking industry (with cars and busses not too far behind). Monitoring the health of your home – CO2, energy efficiency, VOC, and water contamination – will see a rise in importance as rising CO2 levels and water contamination continue to make news.
I predict we have not seen the end of Distributed Denial of Service (DDoS) attacks caused by consumer grade IoT devices. In fact, I feel it is possible we will see a large scale event in 2017 that would cause the disruption of legitimate internet traffic in the United States for up to 24 hours. As we covered in our Insecurity of Things blog series last October, it only takes a few dozen hardware manufacturers to not follow best practices to leave over a half million devices vulnerable to hijacking. With these manufactures already facing heavy competition and slim profits margins, coupled with the influx of new startups rushing to into the space – security and privacy are not given the priority they deserve. Part of our mission here at CRT labs is to educate REALTORS® and consumers about these issues, and it is very promising to see both parties starting to prioritize them when they are deciding what devices to put in their homes. However, until the hardware vendors start taking on the responsibility, there is still a significant risk for large scale attacks.For more information about best practices and how you can keep your devices secure, please visit one of our partner organizations – the Online Trust Alliance.
In 2017 we’re likely to see an increase in the tension between our public and private identities. On the one hand, declaring exactly who we are — and where we are, and when we are there — is an essential part of customizing many user experiences. Concerns about surveillance, though, are prompting more people to use (or at least start asking about) Tor browsers, personal VPNs, and other tools that provide increased security and anonymity. Balancing the demands of both openness and privacy will be a huge story in 2017. (To learn more about Americans and their views on surveillance, visit the Pew Research Center.)