Article originally published on Let Me Waste Your Time. Featured image sourced from same link.
Blockchain technology was originally developed for bitcoin.
Blockchain technology provides transactions and transfers online without the use of an intermediary.
Blockchain is a new name in the world of technologies but it is definitely the one to last. Even in the early stages, the technology has gained huge popularity starting with their very first application of cryptocurrencies. More areas of applications are being discovered and tested with each passing day. Once the technology is adopted and accepted on a global level, it’ll transform the way we live today.
Blockchain technology simply means a decentralised trustless network that works by having a native asset, a decentralised ledger and some algorithms based around a game theory model that allows everyone on the network to reach consensus.
Let me try to explain what blockchain technology is with this simple example.
The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once. That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. The distributed part comes into play when sharing involves a number of people.
Imagine the number of legal documents that should be used that way. Instead of passing them to each other, losing track of versions, and not being in sync with the other version, why can’t *all* business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow.You don’t need a blockchain technology to share documents, but the shared documents analogy is a powerful example.
Far from a short-term trend, blockchain technology is a revolutionary approach to transactions that major companies are beginning to embrace. In a market saturated with new and innovative business strategies, it can be difficult to decide which to adopt. On one side you don’t want to fall behind when it comes to the latest technology. On the other, you don’t want to waste your money on a “cutting-edge” fluke. If you’re looking for a new, efficient way to carry out transactions, blockchain is a technology that your company might find helpful.
What Blockchain technology requires
You might ask why blockchain technology seems so cryptic. The challenge is that it used to be almost exclusively connected to tech circles, and was not widely used by the general public and non-tech businesses. This history is part of why it seems so mysterious today because it’s relatively new to most of us, and the way it works can be difficult to explain without going into confusing and complex concepts.
Blockchain technology was originally developed for bitcoin, the base of other cryptocurrencies, and can be used for any other kind of data recording. The blocks in a blockchain might contain information about identity, dates, or most anything.
Marc Andreessen from VC firm Andreessen Horowitz and American entrepreneur, investor, and software engineer, has called Bitcoin and the underlying blockchain technology a “breakthrough in computer science”.
“The practical consequence (…is…) for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”
In a 2014 New York Times op-ed, Marc Andreessen, likened Bitcoin to personal computers and the Internet in their early days. Each of which depended on the high expectations of their success to make them actually successful.
“This is the classic ‘chicken and egg’ problem with new technology: new technology is not worth much until it’s worth a lot,” he wrote about blockchain technology.
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community is now finding other potential uses for the technology.
Short version of it: Blockchain technology provides a way to make transactions and transfers online without the use of an intermediary. Instead of trusting a third party to keep the transaction history safe and accurate, blockchain technology lets you seal “pages” of transactions with a key code for security.
With a blockchain technology, many people can write entries into a record of information, and a community of users can control how the record of information is amended and updated. Likewise, Wikipedia entries are not the product of a single publisher. No one person controls the information.
But a feature that Wikipedia does not share with the classical blockchain is encryption. Because ownership and anonymity is an important feature on the blockchain technology, encryption of information is needed so that data cannot be stolen or duplicated.
Individuals and businesses use blockchain technology for a variety of reasons. Though some “shady businesses” might use blockchain technology to avoid leaving a paper trail, it’s more often employed to gain improved assurance and privacy. It also allows users to exchange money without the backing of a physical currency, which is one of the qualities that has made Bitcoin famous and makes it sometimes controversial.
Bottom line: There’s a wide variety of blockchain technology-based services on the market.
One of the most relevant reasons that many companies are adopting blockchain technology is efficiency. We can all realize how exchanges can become quicker and simpler when they don’t have to go through a third party. It’s also beginning to move document authentication toward obsolescence, removing a step in the transactional process.
Blockchain technology can also make companies feel like their information is safer and more secure. In an age where hacking is relatively common and banks can not always resist off attempts to attack people’s financialprivacy, blockchain technology is a way to feel a greater sense of control over transactions.
Major companies are adopting blockchain technology because they don’t want to miss out on what could become and it is already extremely popular and efficiently.
“In the mid-to-late 2000’s, big companies missed the social media train,” marketing and business strategist Clay Hebert said. “They couldn’t see how Twitter or Facebook would immediately impact their business, so they were slow to adopt these technologies. They don’t want to play catch-up again.”