What is blockchain and why should you care?
Blockchain technology stores and transmits information on transactions conducted on the internet. A block contains specific transactional information, and a new block of data is created at time intervals contingent on the network’s capacity. As blocks are added, they create a chain or ledger which is thus a “blockchain.”
A blockchain records and stores all the transactions concluded, along with information about them — the date, time, and parties to any transaction. Each node within a network (and there are tens of thousands of nodes) possesses a full copy of the blockchain. Using complex mathematical and cryptographic rules, all transactions are verified by so-called miners, who also are responsible for creating new blocks. Additionally, the nodes within a network automatically and continuously verify all of the transactions. Any attempt to cheat by modifying a concluded transaction, or entering an unauthorized one, will be foiled because the modification won’t match the transaction records in the network ledger.
Norbert Biedrzycki, VP of Mckinsey Digital explains, “Of course, when most people think of blockchain today, they think of cryptocurrencies like Bitcoins and Ethereum and Litecoin. That’s hardly surprising, as Bitcoin’s market ups and downs are breathlessly reported, sometimes on the front pages of newspapers. In fact, there are more than 800 cryptocurrencies traded on different stock markets… and they are just the tip of the blockchain iceberg. Lying beneath the water is the fact that technologies such as blockchain will allow small organizations, and even private individuals, making relatively small capital investments, to disrupt the global economic system by making p2p transactions more secure, reliable, and useful than the traditional trusted third-party. That’s a revolution, no more, no less.”
The blockchain technology is also decentralized by design. It lacks centralized points of vulnerability that can be easily exploited by hackers, and depends on encryption technology in the place of the conventional username-password security system. A user accesses his account through a randomly generated private key. Another feature to take note is that it is transparent, as it is a public record of activities that can be seen by all participants. It has the capacity to automatically update itself every ten minutes and reconciles any transaction that occurred within that time interval.
Obviously, the blockchain technology has come to stay, and even though it is still at the initial stage of development, the true extent of its application has not yet been fully understood. We would love the opportunity to offer you a free 30-minute consultation and discuss with you how blockchain technology can impact your business model in the future.