Stanford computer scientists have founded the Center for Blockchain Research, an initiative dedicated to researching and understanding a technology that promises to fundamentally change how people and companies make deals and complete financial transactions over the internet.

Led by Dan Boneh and David Mazières, both professors of computer science, the center’s inaugural faculty will also include Alex Aiken, David Dill, John Mitchell, Tim Roughgarden and law school faculty Joe Grundfest.

“Blockchains will become increasingly critical to doing business globally,” said Boneh, the Rajeev Motwani Professor in the School of Engineering, and an expert on cryptography and computer security. “Stanford should be at the forefront of efforts to improve, apply and understand the many ripple effects of this technology.”

The center will bring university scientists and industry leaders together to develop best practices for this burgeoning and potentially transformative field. In addition to research, center scientists are creating courses to help future students and working professionals use blockchain to develop financial instruments, protect intellectual property, manage vital records and more.

“Blockchain massively lowers the barriers to creating tradeable, digital assets,” Mazières said. “It allows individuals who don’t know each other, or even trust one another, to make irreversible transactions in a whole variety of fields in a safe and secure way.”

Because blockchain allows traceability, security and transparency, many companies are exploring how it might be used to improve supply chain management, expedite real-estate transactions and the transfer of deeds, or modernize voting technology. Thanks to its best-known application as a cryptocurrency, blockchains could be used to provide safe, secure vouchers to help refugees purchase food.

Blockchain works by creating the digital equivalent of a ledger book of transactions, and distributing multiple copies of identical ledgers over the internet. Each time a new transaction occurs, a data block is added to the chain of information stored in each and every copy of the ledger. This decentralized and highly distributed approach ensures that past transactions cannot be modified and that new transactions can always be added.

All of this poses enormous challenges, such as how to scale the technology to billions of users; how to ensure that data is trustworthy and accurate while still keeping certain details private; and how to maintain high levels of security without using so much computing resources that the cost of electricity becomes a limiting factor for new applications.

“This is a fascinating area of research with deep scientific questions,” said Boneh. “Once you get into the details you quickly realize that this area will generate many PhD theses across all of computer science and beyond.”

The center’s initial five-year research program is being underwritten by gifts from these blockchain organizations: The Ethereum Foundation, Protocol Labs, the Interchain Foundation, OmiseGO, DFINITY Stiftung and PolyChain Capital.