WTF is blockchain? And why you might already be using it.
Don Tapscott who I firmly put as the most prominent Blockchain thought leader said the following
Probably slightly off Piste but makes a valid point and is pretty funny 😊
In this short article I’ll give you a “Dummies guide” to Blockchain using my knowledge and some interesting facts and pointers from the web. Blockchain has given me many migraines over the last year so I thought I’d help you cut the corner! I will be talking much more on the topic as I believe it will have a profound affect on our lives and not only in financial services — It will literally change the way we live our lives. SO… here goes.
Blockchain is a secure distributed public record of your transactions. Imagine a magical spreadsheet in the cloud, or more specifically on a network.
Put simply, Blockchain is basically an incorruptible distributed ledger of data, which can be used to store informational assets ranging from managing contracts to transferring value ie MONEY . The most recognised application using blockchain technology is bitcoin which is a digitally traded currency.
“When you interact with multiple parties, you need some sort of consensus mechanism to ensure everyone has got the right records”–Dan O’Prey, Co-founder of Hyperledger.
And Trust is key to the whole thing. Imagine a 100% secure way of identifying each other and sending money and other things of value without the requirement of a passport, bank account or drivers licence. Powerful right?
Blockchain is often referred to as the “internet of value”
On the internet, anyone can publish information and then others can access it anywhere in the world. This is known as the “Internet of information” So every single transaction and communication you make is recorded and can be looked at, hacked or similar… It’s dangerous out there!
A blockchain allows anyone to send value anywhere in the world where the blockchain file can be accessed. But you must have a private, cryptographically created key to access only the blocks you “own.”
By giving a private key which you own to someone else, you effectively transfer the value of whatever is stored in that section of the blockchain. — Most importantly, Completely securely!
It also fills a second role, establishing trust and identity, because no one can edit a blockchain without having the corresponding keys. Edits not verified by those keys are rejected. Of course, the keys — like a physical currency — could theoretically be stolen, but a few lines of computer code can generally be kept secure at very little expense. (Unlike, say, the expense of storing a cache of gold in a proverbial Fort Knox.)
This means that the major functions carried out by banks — verifying identities to prevent fraud and then recording legitimate transactions — can be carried out by blockchain more quickly and accurately.
So to summarise…. Blockchain is very complex — It’s brand new and disruptive — It’s, I believe in year 2 of at least a 20 year cycle but it is coming — it’s already being adopted by banks and governments for various uses. I will be publishing a further article entitled — Blockchain — Not just for financial services on how your business can put this new piece of tech to use in your business.