That data is then automatically encrypted to create a unique identifying code, called a hash. Hashes allow each distinct piece of data to be distinguished in a block that contains potentially thousands of pieces of data.
The blocks link together to form a chain that's connected by the code in each block. The combined chain, then, is essentially a digital ledger of transactions that can be shared securely across a company's network.
The technology's supporters see blockchain's potential to reduce data theft and speed up business transactions. The instant bundling and encryption of massive amounts of data could potentially change how Oregon's banks and mortgage companies record transactions and how its trucking and shipping, agricultural and other businesses import, export and distribute products, said Springfield tax consultant Kelly Sunshawl Barrett.
Barrett began investing in cryptocurrencies in 2015, and now teaches blockchain and virtual currency to other accountants.
"There is a good possibility it will get implemented in such a way that customers won't know what's going on," Barrett said. "A lot of businesses are starting to find ways to save money, save time and have data that's more secure. It's huge in the health care industry, and it will be if it hasn't already gotten huge in the insurance industry. It will be a disruptive technology, which is why big companies like Microsoft are big on blockchain."
Blockchain's use is far from widespread – but a large-scale shift toward the technology is underway.
Fifty-three percent of executives surveyed by the consulting firm Deloitte this year said blockchain will be one of their companies' five most important strategic priorities over the next two years, up from 43 percent who felt the same way in the firm's 2018 survey. And the number of firms investing in blockchain for uses other than recording payments is growing rapidly.
That's an encouraging sign for industry observers whose enthusiasm for blockchain is a bit more nuanced. Cryptocurrency valuation has been extremely volatile since Bitcoin burst on the scene on 2009, and last year Bitcoin's value plunged.
"It couldn't really deliver on the scalability, and it's so expensive to operate a (cryptocurrency) blockchain," said Adam Krynicki, Executive Director at the Innovation Co-Lab at Oregon State University-Cascades in Bend. "But now the real fun stuff is starting to happen."
Those are real-world applications for blockchain that are just in their nascent stages today – technologies like crypto-contracts to securely coordinate shipping transportation and manage logistics.
"We have thousands, if not hundreds of thousands of databases that store where goods are ordered from, where they're going, who they're intended for," Krynicki said. "We've created these databases and advanced connections, but the problem with it is knowing where stuff is within that system at any given time."
Blockchain is the clear solution.
"It allows people within an entire system to be able to see where goods are going, where they're coming from, who they're intended for, and if they're lost finding the insurance contracts they're connected to," he said. "It makes for seamless systems. So for business cases like crypto-contracts, shipping logistics, health care, we're just starting to get to that point."
The Oregon Enterprise Blockchain Venture Studio is tapping into the state's vast infrastructure of powerful data centers and its pioneering efforts in open source computing. The Beaverton-based Open Source Development Labs of the early and mid-2000s was a massive investment by tech giants like Intel and IBM to speed up the development of technologies that would power products like Google's Android mobile operating system.
Much of that innovation has been transferred to the groundbreaking research being done in Oregon's major research institutions today, noted Gaus, the venture studio co-founder.
The studio in August announced its inaugural class, six startups spread from Portland to Switzerland who will work with consultants from R/GA Ventures to develop blockchain technology in Portland. The initiative is backed by partners including Business Oregon, the state's business development department, Portland State University, Oregon Health & Science University and business partners like Moda Health and Umpqua Bank.
Gaus sees the studio spinning off dozens of small companies in the next few years that will start building new capabilities with blockchain.
"They'll either be serving our existing mainstream industries or creating new categories of capabilities," he said. Innovating in such a data-heavy field will require large amounts of storage, and Oregon, with its low-cost power and state leaders' embrace of big data centers, has developed plenty of storage to satisfy the needs of growing companies.
"Collaboration and consensus are the way we govern as Oregonians, and it also happens to be the two underlying tenets of blockchain governance," Gaus said. "All of these attributes say we have this very fertile field for the sprouts of blockchain to develop."
So where does Oregon
come into play?
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