In recent weeks, our posts have largely focused on cryptocurrency and how to take part in the democratization and decentralization of value exchange — whether through financial services, supply chain management, hospital records or a global content entertainment system. The media focus on cryptocurrencies such as Bitcoin or Litecoin is only the very tip of the iceberg. If we dive beneath the water’s surface, we discover a far larger and far-reaching revolution which is beginning to impact on the way we work and see the world, with the technological enabler, blockchain, at its core.
That said, blockchain’s entrance into the public arena was triggered by today’s most recognized cryptocurrency, Bitcoin.
In 2008, Satoshi Nakamoto, a pseudonym, published his white paper about Bitcoin, a peer-to-peer electronic cash system. Nakamoto wanted to create a decentralized, digital currency to compete against fiat currencies. Of far more significance, the mechanics behind Bitcoin were to change the way early adopters started thinking about decentralization and decentralized business models in general. As email was to the web, bitcoin became the first widely known app built on blockchain, and there are already many more such examples including Vitalik Buterin’s Ethereum amongst many other blockchains, both public and private.
Simply put, blockchain is a decentralized, openly shared and distributed digital ledger technology. It achieves this in a cheap, efficient, and very secure way whilst removing the need either for an intermediary or a central authority. The key qualities of this network are that it is fully transparent (anyone can see the ledger’s history of transactions), it is time-stamped and therefore auditable, it is decentralized (the ledger exists on multiple computers) and it is secured through cryptography. Using advanced cryptographic functions, blockchains provide a decentralized and safe database of any transaction involving value (whether money, goods, property, work or even experiences). Each transaction between two parties creates a record on a digitally distributed ledger of which the authenticity can be verified by the entire community, meaning that everyone works together to create a network instead of its being defined by a single person or company.
Just about the only thing you need in order to get involved in blockchain-based transactions is internet access: that’s pretty democratic! Where third-party trust organizations are no longer a necessary component of the process, blockchain is steadily becoming a truly global and decentralized source of trust.
Blockchain explained in 5 levels of difficulty
Blockchains will decentralize trust and democratize value transfer just as the Internet has decentralized the way in which we access, store, and share information. They will eventually form the new foundation of both our economic and social infrastructure. The impact for developing countries is potentially enormous, where legacy infrastructure is often spartan and digital offers a clear solution, thanks to the huge uptake of smartphones and similar, advanced services. Looking ahead, blockchain will, like the internet, become just another common or garden technology layer. Consumers will not talk about the blockchain even though it may be fundamental in facilitating much of what they do in their daily lives. The question is how this development will evolve and just how long it will take for more tangible, blockchain-driven products and services such as Ripple, Neo or Tend to be readily accessible to a wide audience.
With 2017 fast drawing to a close, let’s look at two articles that envisage what blockchain might bring in 2018 and how it could affect the business world:
For a more comprehensive explanation of Blockchain, we would recommend you reading this very good guide in plain English.
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