For better or worse, the public face of blockchain technology has been Bitcoin, the polarizing crypto-currency. While Bitcoin’s detractors point to high-profile criminal activities and price volatility to question its ultimate long-term viability, a broader base of people knowledgeable in the foundational blockchain technology see potential applications beyond the creation and trading of currency not controlled by any centralized authority.
Blockchain is a “distributed network” that supports TRUST through interlocking “blocks” of data, where data can be added to but not change past information (blocks). Transactions are posted on a public ledger across all computers on that blockchain. If someone tries to change their transactions in the ledger, it will not sync with the other copies of the ledger and the transaction will not be accepted. The replication of thousands of copies of the same ledger prevents hacking, since each copy would have to be changed. With blockchain, only one true copy exists, and this does not have to be managed by any central authority.
These “trust” features create powerful possibilities for situations that require transactions to be both secure and verifiable. Protocols can be written in computer code that applies “rules” to transactions to enforce terms of contracts. In other words, creating a “smart contract”. Conditions can be defined that trigger a certain outcome, or “next step”. For example, when a product is delivered, a payment for that product can be transmitted to the correct party. Not all actions require denomination in currency. Title to property could be transferred when certain hurdles are crossed, automating the escrow process.
Countless commercial possibilities could use the blockchain platform with further development of its applications, activity that is reflected in blockchain being designated as a “mega-trend” by the World Economic Forum, and citing smart legal contracts as one of the “positive impacts” (see Shift 16) in the Deep Shift – Technology Tipping Points and Societal Impact survey report.
Whether you are in the camp of embracing or eschewing Bitcoin, it’s a good idea to keep this topic on your radar. Blockchain technology is here to stay, because of the promise of bringing greater access, efficiency, and reliability to transactional activities.