Blockchains are the new hot technology like forex trading, and they’re coming to a business near you. The headline you see in bright red letters across your screen saying “This is NOT a Blockchain Advertisement” means absolutely nothing anymore. It’s time for us to start educating about this new trend that’s about to take over the world in the next few years.
If you still don’t know what a “blockchain” is, start doing your research. Wikipedia defines it as: “A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is ‘an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way’. It is an abstract representation of digital assets.”
1. What is a blockchain?
A blockchain is, quite simply, a secure list of records that can be accessed by anyone in the world that knows how to read it. The current record of each block is stored on multiple computers known as nodes (see below for more details) that all share the same ledger at any point in time. When you make your transaction, you add to the chain. The next person to access the chain can see when it was created and who made it and what they put into it. Transactions can also be made so that they can be viewed by an individual or group. For example, a new restaurant could add a transaction to their chain on the opening day with pictures and specials, but only allow staff members access to it. The blockchain is like a universal filing system that each person has the ability to access and add to. The beauty of this is that there’s no need for any one party to control it anymore. The data is safe, secure, and constantly updated on many computers at once so no one has the power to alter it.
2. Where did all this come from?
A blockchain, or a distributed ledger technology (DLT) has been around for quite some time. In 2008, a group of anonymous programmers released an open source software project called “Bitcoin”. This made it possible to create digital assets that could be exchanged directly between peers without having to go through a central third party. The blockchain is what makes the exchange possible and any transaction can be viewed and tracked at any point in time. Nowadays, there are over thousands of projects that are either being developed or tested in a limited fashion (see news approved site).
3. Who is using this technology?
The most recent company to announce their plans for blockchain integration with their business is the Walt Disney Company . The entertainment giant is looking to integrate blockchain technology with their parks, resorts and the consumer goods business. This is the first major integration of blockchain and a mainstream brand, so it’s no wonder that a lot of business owners are intrigued at this possibility. Another big company that has been using blockchain technology for quite some time now is IBM . You may not know it, but IBM has been using blockchain technology with Walmart in order to improve food safety by tracking where food is being shipped from and how long it takes to get to its destination before arriving at Walmart’s stores.
4. How will this affect our future?
By 2021 the global market for DLT applications across all industry sectors will reach $13.7 billion, according to IDC. This means that in the coming years you can expect to see a lot more businesses and social organizations using blockchain technology because of its endless possibilities for growth. Even this past weekend a small town in upstate New York called Rhinebeck was using blockchain technology at the Chihuly Glass Flower exhibit for outreach. The glass workers were tracking their inventory and storing it on a blockchain so that their customers could view what was available at all times.
5. How is this different from an Excel spreadsheet?
A big difference between a blockchain like ICO and an Excel spreadsheet is the element of time. A blockchain is constantly updated, which means that if you view a transaction that was made a month ago, it will still show up in the proper order. A spreadsheet has to be updated manually by whatever party controls it. Another difference is that you can allow anyone access to a blockchain without giving them power over it. For example, a third party can be viewing your transactions without being able to alter them. This is the beauty of an open source platform. The final big difference is what happens when someone attempts to hack into either one of them. Someone who hacks into an Excel spreadsheet can change whatever they want and no one would ever know because the only way another person would know you changed anything was if you told them about it.