If you keep hearing the term “blockchain” popping up, you’re not alone. It has major players in the tech industry excited about what’s to come. If you don’t know what it is or why it’s a big deal, we’ve put together a quick guide on what you need to know about blockchain.
What is blockchain?
According to Blockgeeks, Blockchain was originally created for the cryptocurrency Bitcoin, and lets people distribute—but not copy—digital information.
Blockchain keeps track of everything that happens within its network, which could include anything from financial transactions to contracts. It maintains a shared list of records, known as blocks, that track the history of each of them with a distinctive time stamp. Piece these blocks together, and you get—you guessed it—blockchain. Think of it as a highly-transparent digital footprint that cannot be altered by a single person or organization.
The power of blockchain lies in its distributed ledger technology. Made up of two primary components, blockchain employs a decentralized network that verifies transactions and a ledger which is maintained within the network. This set up means there’s not a single point of failure that could be exploited by hackers and that the data cannot be controlled or altered, making it the most secure transactional channel to date.
How can blockchain be used?
Blockchain allows people to create public or private networks with which they can complete transactions or broker deals in a secure space. They’re also highly transparent, and anyone in the network is able to view the entire chain.
Forbes gives the example of blockchain potentially allowing a stock purchase transactions to settle within minutes. Normally when buying or selling stock, you need a broker to work with the buying and selling parties, and the secure transfer of funds takes more time. But when these types of transactions are done through blockchain, it eliminates the need for an intermediary and offers the most secure channel currently possible.
So why is blockchain a big deal?
Blockchain could eventually render bankers, lawyers, brokers, and other business intermediaries obsolete in many circumstances. Tech giant IBM has already invested $200 million and 1,000 employees into exploring the technology and how its application can change the way businesses operate.
But don’t be too worried about losing your 9-to-5 position to blockchain anytime soon. The Harvard Business Review suggests that because blockchain is a foundational technology rather than a disruptive one, full adoption is still decades away.
This is just the tip of the iceberg when it comes to the potential usage of blockchain in the future, and it will be interesting to see how the technology continues to develop.
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