From my little knowledge, Blockchain is the technology platform that Bitcoin was developed on and this is now sparking other smart people to think of how to use it to benefit other industries and areas.
If you need to capture information and hold it somewhere safe; where you want to be sure no-one is lying about what is written down; where you might be operating across borders or organisations then you might see some opportunities.
What is Blockchain?
In a very simple high level view!
×) A digital ledger or database that is a record of information. These databases are replicated millions of times over. They are hosted by millions of computers simultaneously, synchronized via the Internet.
Transactions are grouped into ‘blocks’, then stored forever in a ‘chain’ by linking each new block one after another with the preceding block. Each ‘block’ has a timestamp. It is verified by multiple people so it becomes “a single source of truth”
If something is changed, the Blockchain becomes invalid and the error is broadcast out
Some of the benefits that I can see include:
×) No faking – if someone gives you a currency, shows their education level, says they are who they say they are ….it is real and verified
No mistakes – once it is in the ledger it needs to be verified. Once verified it can't be changed unless everyone agrees; no human mistakes or fraud
×) Open and equal access – my hope is that as blockchain increases in prevalence it is going to bring equality to all. Users won't have to pay a ‘middle-man’ (bank, lawyer etc.) and it doesn’t matter if you are transacting with someone in another country
×) Fast and always on – no more ‘bank clearing’ days, no more waiting to get copies of your birth certificate, your qualifications, your tax or pension information …especially when you are overseas (speaking from experience!)
Low transaction fees, so even very small exchanges are enabled – e.g. for streaming one song a musician can be paid directly
WHAT'S THE DOWNSIDES?
The obvious one is that it needs an internet connection.
It’s new - the technology is still being developed and our understanding of the opportunities are still being explored
The legal framework is a long way from aligning with the speed of this new technology, either in an enabling, or a controlling way
Adoption – not only is the technology not widely used or understood, but the whole premise of sharing and trusting information on a central database is a shift in mind-set.
Much as we might complain about powerful institutions (banks, educational institutions, law firms) we have used them for generations and they aren’t lining up to encourage us to “take them out.”
Image – there is an image of cryptocurrencies specifically being used by criminals
Power sucking – because it is always on and mining lots of data from millions of computers it is using a lot of energy
Before you think this might be something that won't hit the mainstream - think about how the internet started and how prevalent it is today.
I think we’re just at the start of the wave and that this is going to massively disrupt how we exchange information and currencies globally.
There are lots of applications already identified, from contract management and education to real estate and intellectual property. You can already trade Bitcoin on Trade Me and buy wine, clothes and watches with your currency.
Very keen to hear from anyone reading this – whether it is examples of how you think it can be used; challenges that lie ahead; or alternative ways to describe this.
