The chairman of a billion-dollar retail company says that a digital cryptographic record-keeping system called blockchain will be “more meaningful than the internet” in the next decade.
Although the digital cryptocurrency known as bitcoin has dominated headlines, the system that allows it to exist, blockchain, is the real game-changer, Jonathan Johnson, chairman of the board of the retail site Overstock.com, told a Capitol Hill audience Tuesday at The Heritage Foundation.
Norbert Michel, director of Heritage’s Center for Data Analysis, described blockchain as “a publicly available database that records every bitcoin transaction,” one that is also used by other digital currencies.
Johnson, who ran in the 2016 Republican primary for Utah governor, said Overstock.com began accepting bitcoin as a valid method of payment from customers in 2014. In the years since, he said, it has expanded to other cryptocurrencies and invested extensive resources in companies and foundations promoting them.
The businessman is also president of Overstock.com’s subsidiary, Medici Ventures, a company dedicated to advancing blockchain technology. He predicted that in the next decade, people in other countries would use bitcoin and other digital currencies as their preferred way of transacting business.
But blockchain, Johnson said, is so much more than just bitcoin. The technology allows for the elimination of a middleman in online transactions, making the transaction not much different than handing someone cash.
The Overstock board chairman noted that around the world, billions of people are “unbanked.” He said blockchain could provide them with a way of securing assets without a bank account.
By reaching the billions of “unbanked” individuals, Johnson noted, blockchain would “rehumanize commerce” and potentially go a long way toward solving global poverty by “unleashing dead capital.”
About 5 billion people worldwide are “unglobalized,” he said. This “unglobalized” population owns property, he said, but there are “no government records of who owns what.”
Blockchain could provide for them a permanent place to record those assets where it could be recognized globally.
If that happens, Johnson said, “entrepreneurs can go to work lifting the population out of poverty.”
He also addressed the twin concerns of security and illicit activity with respect to the use of a digital currency and digital record-keeping, telling his Heritage audience that an FBI agent once told him that the agency loves bitcoin because it leaves an electronic footprint they can follow.
Bitcoin and blockchain, Johnson noted, never have been hacked, as both are decentralized, making hacking difficult, if not impossible.
But he said some individuals and organizations always will use currency, regardless of where it comes from, for illicit transactions.