Blockchain: How It’s Changing the Way We Do Business
If you’ve decided it’s time to dive into the world of crypto, chances are you’ve heard the term “Blockchain” thrown around quite a bit. While it still hasn’t quite become the “next internet”, it’s really an ingenious invention already beginning to change the way money is exchanged. Blockchain was invented by Satoshi Nakamoto, which is actually a pseudonym for a person, or potentially a group of individuals. Nobody really knows for sure, but that hasn’t stopped its meteoric rise in popularity.
But what exactly is Blockchain?
Well, Don and Alex Tapscott, authors of Blockchain Revolution, have done a pretty good job summing it up in layman’s terms.
“Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don and Alex Tapscott
Most of us have used Microsoft Excel at least a couple times in the past. One easy way to picture what Blockchain does is to imagine a spreadsheet with information. Now, imagine that this spreadsheet is duplicated thousands of times across a vast network of computers!
This network with the duplicated spreadsheet also has the ability to update the file on a regular basis. This is essentially what is going on behind the scenes with Blockchain.
Any and all information on Blockchain is stored on a continually updated shared database. What makes this technology particularly unique, is that it’s not stored in any one single place. All information is public. Every single bit of it. Which makes it very easy to verify.
This also has the added benefit of making it almost impossible for a hacker to corrupt. How so? Well, there is no centralised location where the information exists for the hacker to target.
Benefits of the Blockchain Technology
Shared ledger of transactions
Well, let’s start off with how banks traditionally maintain money balances and transfers. Let’s say you have a balance of money in Bank A and want to transfer it to Bank B. To start the transfer, Bank A temporarily locks access while decreasing the balance and making the transfer. After the transfer, the balance is updated on the other side and then access is reopened. In this scenario, the two parties cannot update the same record at once.
With Blockchain, you are basically operating off of a shared database. Think of sharing and working on a document together in Google Sheets, versus updating and emailing a Microsoft Excel sheet to another person back and forth.
Say goodbye to missed transactions, machine errors, or the ability for a transaction to be conducted without both parties consenting! Where Blockchain excels is in its ability to pretty much guarantee that every transaction is indeed valid. Surely, we can all agree that that’s very good for everyone?
Transparency and trust
As blockchain are shared and everyone can see what is on the blockchain, this allows the system to be transparent and as a result trust is established. This is more relevant in scenarios such as the disbursement of funds or benefits where personal discretion should be restricted.
As no third party or clearing houses are required in the blockchain model, this can massively eliminate overhead costs in the form of fees that are paid to these middlemen in the system.
With the advanced features of the technology readily apparent, its clear that businesses operating on the cloud or in many locations are well positioned to benefit from the technology.