Blockchain experts are preparing government agencies and big businesses for what they believe will be one of the most revolutionary technologies of our time.



The technology, which bears resemblance to the file-sharing application Napster, enables people to swap information without an trusted intermediary.



The most high profile example is the bankless and borderless currency Bitcoin, which is based purely on parties agreeing to the value of the coin.

The engine behind Bitcoin is a ledger system called Blockchain. Each time a transaction occurs, a multitude of files or "nodes" throughout the Internet are updated.

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Unlike Napster, however, there is no company in the middle.

Blockchain has so far proved impossible to hack and now government agencies like the Ministry of Health and the NZ Qualifications Authority are exploring its possibilities.

Phil Williams, an advisor to the Edmund Hillary Foundation, is co-ordinating a white paper to urge the Government to bring in blockchain-friendly regulations.



He says the Health Ministry is unlikely to put actual health records on "the chain" but it would be a brilliant way of linking records scattered in multiple places.



It's an amazing technology, he says, that could eventually form a gateway for whole industries, enabling "vastly more efficient transactions" between different companies.

SUPPLIED Mark Pascall: Blockchain will enable "a world where control moves to the individual."

Mark Pascall, of business consultancy Blockchain Labs NZ, says that until Blockchain's emergence, governments and agencies were reliant on centralised databases to store information.

Under the new technology, individuals can determine who gets access to their details.

He says that in a short space of time, Blockchain has become one of the most potentially world-changing technologies, alongside the Internet, nanotech, genetic engineering and AI.

"Blockchain is in the top five, I'd say,"' Pascall says.

Big businesses are also locking onto Blockchain's potential. Air New Zealand recently announced that it was looking at it for a variety of uses including cargo and baggage tracking, retail, distribution, and loyalty programmes.

Webjet is experimenting with it to document hotel bookings. The ASX has announced it will use it for its trading records.

And Auckland-based power company Vector has been trialling a blockchain system to help keep track of transactions among communities which buy and sell their own power.

Pascall says he knows of about 10 other New Zealand businesses exploring the technology.

"The technology will evolve and mature," he said, noting that at the moment Blockchain costs considerably more to implement than a traditional database.

But smaller businesses can tap into this new technology as well.

"All individuals can get involved in some of these international projects, open-source endeavours where people all over the world are contributing, and also they can buy tokens or get given tokens for their involvement.

"Ideally if that project succeeds, the token value will go up and I can swap it for dollars later on. That's one way to get involved, or for a business to potentially ICO [raise money through an initial coin offering] and create new disruptive business models."

In the meantime, Williams and others are urging the Government to help New Zealand become a leader rather than a follower in Blockchain.

About 30 entrepreneurs or experts have recently come into the country under a newly-created innovation visa, and half a dozen of them were Blockchain-related, he says.

Williams, who works for Orion Health, notes that other jurisdictions are pushing hard to capture these experts.

"The gates are wide open at the moment and if we can attract great thinkers from abroad and also grow our own skills here through a focus on understanding, maybe additional training as well, then we have a huge role to play in ... global transformation.

Why does blockchain work?

Essentially blockchain relies on a world that polices itself rather than a middle-man.

While that may seems scary, there are already many examples of this collaborative concept at work.

TradeMe to a large degree relies on traders to be honest and deliver items, academics crowdsource information, and Wikipedia relies on the public at large to keep its information honest.

When Bitcoin emerged several years ago, it was clear the technology that underpinned it could be used for many things other than currencies.

There are now at least 700 blockchains but only a few have become well used, Ethereum being one of the best known.

New companies are also fundraising through ICOs or "initial coin offers" which, like a sharemarket float, give people a slice of the new venture.

Williams says Blockchain will in the first instance be useful for companies wanting to make their processes more efficient.

But the real revolution will be come when new ways of applying it are invented.

"They [the chains] enable new networks of value to be exchanged in society that actually don't exist at the moment. So entirely new economies could spring up."

Pascall believes that blockchain will ultimately lead to greater globalisation.

"In a global village with a database which no single government can control, then we move to a world where control moves to the individual."