Understanding Blockchain
Growing beyond the early days of cryptocurrency, blockchain is now poised to become the world’s dominant value-exchange protocol. But what is blockchain? The term may be completely unfamiliar if you live outside the world of Bitcoins, but if you run a business that involves multiple levels of interactions for contracts, complex databases, and high-value transactions with untested clients, then blockchain may be exactly what your business needs.
Best described by Don and Alex Tapscott, “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Using the blockchain in your business can increase database and transactional security through decentralization and transparency, and protect intellectual property – and shorten the compensation cycle for contracts, in a way never before seen. Blockchain has many strengths like robustness through decentralization – blocks of identical information are stored across its network making data corruption and centralized security vulnerability impossible. Says Ian Khan, “As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.”
Although the possibilities for blockchain applications are robust, the creation of blockchain-based Smart Contracts creates the potential for contracts to be partially or fully executed or enforced once conditions are met without the need for human interaction or intervention. Imagine a world where payment for your work product is completed without first cycling through multiple administrative layers. This creates the potential to bring more people into the marketplace and streamline business transactions to the parties directly involved in the work product exchange. Blockchain is still in its technological infancy, but the potential for enhancing trust in the digital/transactional marketplace, and eliminating wasteful administrative redundancies are just around the corner.
- Bheemaiah, Kariappa (January 2015). “Block Chain 2.0: The Renaissance of Money”. Wired. Retrieved 13 November 2016
- Don & Alex Tapscott, authors Blockchain Revolution (2016)
- Ian Khan, TEDx
- Franco, Pedro (2014). Understanding Bitcoin: Cryptography, Engineering and Economics. John Wiley & Sons. p. 9. ISBN 978-1-119-01916-9. Retrieved 4 January 2017 – via Google Books.