by Antoni Zolciak
What is Blockchain? Defining and Explaining This Revolutionary Technology
If you’re still new to what blockchain is, you’re not the only one in the world of business still puzzling over it. However, what you’ll find interesting about blockchain is it’s really not new, even if it’s just now becoming better known in the mainstream.
Any of you who’ve read about the cryptocurrency bitcoin have already heard about blockchain in the periphery. It’s the technological foundation for bitcoin transfers, namely in providing a private peer-to-peer network and bringing user transparency.
So why should you learn more about what blockchain is and what it does? Shortly – this technology is going to revolutionize the way we’ll send information, essentially making it a new internet.
Take a look at why you should consider it for your IT in 2018.
Defining What Blockchain Is
The best way to describe blockchain is to look at it as a digitized and decentralized public ledger used for all online transactions. As a continuously growing list of records, the “block” aspect is actually blocks of records linked and secured through cryptography.
In other words, it’s provided much more security for cryptocurrency transactions and avoiding intermediaries as ordinary online transactions do.
Used mainly for bitcoin transfers over the last nine years, blockchain essentially started through bitcoin’s previously anonymous founder, Satoshi Nakamoto. Despite the latter name being an alias for a mysterious individual (or group), Nakamoto became synonymous with forwarding blockchain.
Quick sidenote: if you’re interested in bitcoin’s history and Satoshi Nakamoto himself (or themselves) check out Banking on Bitcoin, a Netflix documentary:
Regardless, blockchain had early foundations years earlier, in the 1990s, but was usually deemed a theoretical process.
Today, it’s time to look at blockchain in new ways that go beyond mere use in transacting bitcoin.
Using Blockchain in IT Services
Over the last year or so, you’re starting to see a mad dash for blockchain in the financial industry. They want to create a new network revolution by allowing safer financial transactions while bringing more transparency.
This new rush to acquire (and patent) blockchain technologies in the financial sector is also snowballing into the general IT arena.
In the world of general business, blockchain is going to become extremely useful in how you communicate and deal in e-commerce. You can analyze this better by looking at four key areas:
- Establishing a more secure business network to share and record information with multiple business entities.
- Knowing the identities of those you connect with online for regulatory purposes.
- Changing how you exchange information with customers or businesses through smart contracts.
- Creating faster transaction resolution to save time and money.
All of these areas require better security and openness to nurture a more trusted business environment. To understand this better, you’ll want to learn about how revolutionary blockchain may soon become in these individual subjects.
Creating Tighter Security When Sharing Information
We all know the online world is becoming more of a landmine every year with countless viruses and hackers infiltrating networks.
Blockchain could very soon revolutionize security through your business’s network. The cryptography it uses is impossible to hack while also using digital signatures to prove identity and authenticity.
You can see why the prospects of having an utterly safe network are so attractive to the financial industry and all business sectors. With costs of hacking soaring (and viruses like ransomware increasing for vulnerable businesses), the thought of having a safe network again is more than a little enticing.
Because you’re perhaps relying more on sharing digital data with customers and business associates, blockchain technology would become a saving grace.
Using Digital Signatures to Prove Transactions
What happens when you need to prove a transaction occurred if you find out fraud occurred? Blockchain provides the above digital signature technology so you’re always able to provide complete transparency about when a deal took place and who it was.
It’s often challenging to do this through typical network structure. Yet, with demanding regulations like anti-money laundering (AML) and Know Your Customer (KYC), you have to find a way to report all monetary transfers.
Blockchain enables this without having to do extensive digging after the fact. In cases where you do extensive e-commerce, this is all the more important if you detect fraudulent activity. You can prove it didn’t occur on your end.
Using Smart Contracts
You’re going to start seeing more written about smart contracts in coming years. Blockchain is the foundation for this, and the possibilities are virtually endless.
Smart contracts are possible everywhere digital goods are exchanged or digital transactions are carried out. In each case, the prerequisite is that the satisfaction of contractual terms can be digitally verified.
Through this process, you’ll start to see smart contracts being used in everything from automobile leasing, stock market exchanges, to insurance contracts.
Blockchain could radically change how we view a contract without even having to sign a paper document. Considering blockchain is already a public ledger, the exchange of digital information already suffices as a physical signature.
Businesses like yours are already facing increased competition, so being able to do faster e-commerce is always to your benefit. Using blockchain solves this in many ways, including smaller peer-to-peer marketplaces.
In the latter case, you’re seeing a more natural way for consumers and businesses to transact without all the worry about data being compromised.
Best of all, it’s creating a decentralized economy, meaning many small businesses can avoid being shut down by a central company. The blockchain opens the door to many businesses like yours in saving time and money having to pay out to network intermediaries.
Visit us at In’saneLab to learn more about revolutionary technologies like blockchain.