Everyone from New York Times, MIT, to IBM and tech blogs are talking about the technology behind cryptocurrencies like Bitcoin. The new treasury of technology has promises of providing secure and correct data storage. But, what exactly is Blockchain? This is a high-level intro on blockchain technologies and a case for why you should be paying attention. Consider this Blockchain 101.
Welcome to class.
What is blockchain?
Blockchain is a digital ledger in which transactions are recorded chronologically and publically. Translation? A database in which ledgers are, not stored in only one place but, distributed across connected computers and are updated and synced at regular intervals. Meaning that once the data is recorded in the blockchain, the data cannot be altered retroactively without updating all the subsequent blocks and achieving agreement across the entire network. Our friends at Deloitte have this handy infographic that breaks down the key structures and functions of Blockchain.
The structure of the blockchain is secure. For example, the ledger is not centralized (aka not stored in only one place), the data is stored chronologically, and requires decentralized consensus on all changes, offering systemic checks and balances across the network.
For the more visual learners out there, check out this quick video explaining Blockchain: https://youtu.be/oSP-taqLWPQ
Who uses blockchain?
Blockchain was originally created to manage the cryptocurrency, Bitcoin. But, because of its unique structure, Blockchain has many real world applications outside of Bitcoin.
Of course, financial institutions in which it is imperative that transactional information is safe and kept up to date. But also industries that currently rely on a supply chain of checks and balances recorded and updated can implement blockchain to streamline. Think of the supply chain process itself. Often weighed down by regulatory process and due diligence, each member of the supply chain keeps their own centralized record that must be relied upon. Blockchain allows the supply chain industry to be seamlessly connected and updated in real time, literally a common view to the entire data set.
Similarly, industries that hinge on contractual transactions (e.g., real estate, car buying, etc) could benefit from a secure ledger that keeps all parties information safe and in check. Healthcare is an industry that currently struggles with blind spots and the inability to view full data sets across platforms. The implementation of blockchain in healthcare means that when your medical record is updated at one doctor and you go visit another doctor in a different health network or office, your records are up-to-date, correct, and can’t be “lost in the shuffle”. (An infographic that demonstrates the usecases for blockchain)
Blockchain will help me __________?
In short, save money and change the way you do business. Check out this paper from MIT brains that break down the economics of blockchain.
We spend a lot of money on the cost of verification and the cost of networking. Our marketplaces are built on shared goods and information to enact those transactions for both parties. The faster we are doing business, the larger the business, the increased connectivity, and more players at the table are all great for scale, but we are seeing the cost of due diligences, red tape through the checks and balances we’ve created increase.
Blockchain isn’t just about rethinking the process, it can redefine the way we work — lowering the cost of auditing, verification, transactions, and networking. Not to mention, as we consider the silos in which our business have been built, we face issues of data integrity, consistency, and security. Blockchain offers a system in which the data is immutable and secure–allowing our data to be even more useful.
Why should I care about blockchain?
Companies generally fall somewhere on the trajectory of technical transition — you are heading there, are there, or you’ve been there and lived to tell about it. Chances are, your company is considering reworking your infrastructure, streamlining your tech stack, trying to figure out how to apply or monetizing your internal data, or you are in the midst of the transition, or you already have gone through it and you are in an iterative place of growth.
Regardless of where you fall on that trajectory — we can agree that the landscape of how we build businesses and what we expect from interactions with our technology is changing. That being said, blockchain isn’t slowing down. It likely won’t solve all your problems, but, it may just be the foundation you need to grow.
You should care. You should listen. Learn. Worst case scenario, you walk away with a new way of thinking about how your business could operate. Best case scenario, you’ve found a solution that eases a lot of pain points.
Now you know.