What is a Blockchain and Why it Matters
Bitcoin is in the news frequently, making headlines for its value. Whether you’re investing in cryptocurrency or not, there’s something far more interesting about Bitcoin than its purported worth: the technology behind it.
Blockchain is the way Bitcoin transactions are tracked, but it’s not just that. This massive shift in the way we use technology is going to change our lives.
What is Blockchain?
This technology gets a lot less mainstream press than the famous “coin,” so many people have not heard of it. Blockchain is a public digital ledger; a block is a record of new transactions. Think of it as a shared database that’s continuously getting reconciled and updated — but you can’t change the information already posted. Blockchain is often compared to Google docs, a row of safes, or DNA.
This method of updating is making it easier to track transactions with confirmation that you can trace them and that no one has altered the data. Furthermore, Blockchain transactions are hosted by millions of computers at once, a decentralized system, and the “ledger” doesn’t belong to one person or entity, making the records more secure. Blockchain transactions are also anonymous.
Uses of Blockchain
Blockchain has its roots in finance but will impact every industry, including insurance, healthcare, security, and any company that requires a trusted chain of documentation and/or contract.
For example, Blockchain can be used to audit supply chains, store files without risk of loss or hacking, protect intellectual property, register property titles, fight money laundering, assist with peer-to-peer transactions, protect self-driving cars from hackers, and more. Blockchain can also make automating IoT more efficient and cheaper by offering a smoother path for exchanging data among devices.
Blockchain is already in use today in some incredible ways, including:
● Cybersecurity — One company is creating a decentralized authentication system, intending to replace logins and passwords with SSL certificates stored on a blockchain.
● Healthcare — The Centers for Disease Control is storing information about disease outbreak onto a Blockchain to help guide disaster relief. Other groups are storing people’s medical records in Blockchain, which aids in sharing and confidentiality.
● Crimefighting — Dubai is at the forefront of using blockchain to connect health records, shipping, and business registrations to prevent the spread of conflict diamonds.
● Manufacturing — Some companies are using it to provide transparency in supply chains.
● Retail — Blockchain is helping organize and track loyalty programs, build payment systems, and creating a decentralized market for trading.
At Imaginovation, we’ve used Blockchain to help companies with the following:
● Arbitrage in crypto exchange trading
● Order routing for cryptocurrencies
● Trading applications for cryptocurrencies
● Ethereum network applications
● Smart contracts using the solidity language
● Blockchain to service using Oraclize
Why Blockchain Matters
Because Blockchain doesn’t require central oversight from a bank or other entity, third-party verification and exchange services such as auditors, payment processors, and brokerages may soon be obsolete. That’s why some are calling it a “disruptive technology,” as Tech Tank did:
“Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain — as would wire transfer fees, third party financial auditing, contract execution, etc.”
Meanwhile, Harvard Business Review suggests Blockchain is far more than a disruptor; it’s foundational technology.
“True blockchain-led transformation of business and government, we believe, is still many years away. That’s because blockchain is not a ‘disruptive’ technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure.”
The Future of Blockchain
As blockchain changes our lives, it will evolve, too. Some industry leaders are already calling it by other names to focus on the function, such as “distributed ledger technology,” now in use by The Australian Securities Exchange. Like a lot of new technology, Blockchain has a lot of hype, and some are calling it a fad.
Meanwhile, Gartner Trend Insight predicts that by 2025, the business value added by Blockchain will grow to slightly over $176 billion, then surge to exceed $3.1 trillion by 2030.
Whether you see Blockchain as disruptive or as foundational, it will undoubtedly have a tremendous impact on the internet and business. Blockchain will help us reimagine old applications and discover new ones in every industry.
Curious about how Blockchain can save you money and make business more secure? Contact us to get started.