Most people have heard of blockchain technology, but relatively few know exactly what it is, or why it’s so exciting. While it’s often recognized as the technology that underpins cryptocurrencies like Bitcoin and Ethereum, that’s only half the story.
Blockchain technology has a huge range of
What is Blockchain?
In simple terms, blockchain is a digital ledger – a record of transactions that cannot be altered without the collusion of everyone involved. This ledger isn’t a physical
This makes it impossible for anyone to maliciously insert, delete, or alter a block on the chain, making fraud extremely unlikely.
Uses of Blockchain
Within the financial sector, the benefits of blockchain technology are obvious: rapid, secure, verifiable transactions that eliminate the need for
The blockchain enables smart contracts. These are similar to standard legal contracts, except that they can be designed to execute automatically once stipulated conditions have been met. For example, automobile insurers could use smart contracts to dynamically adjust rates depending on the data received from sensors mounted in customer vehicles.
Alternatively, blockchain technology could be used to keep track of a supply chain. Information concerning a shipment can be stored in a chain, making it impossible to alter, and allowing retailers to trace back a shipment with unprecedented accuracy (something already being done in some sectors). A similar system could be used to track the ownership of devices and goods. Given that transactions are a matter of public record, there could then be no dispute over ownership, and stolen items tracked on the blockchain could be easily identified.
Even when smart contracts and proof of ownership aren’t needed, using blockchain technology can significantly reduce the amount of paperwork, time, and energy that goes into facilitating transactions. This is something that could have a huge effect on sectors such as legal and real estate, where the amount of paperwork is often significant.
Bookkeeping, too, stands to be revolutionized by blockchain. Imagine being able to verify any transaction, easily trace funds back to their source, automatically track the movement of money and goods, or verify the records of contractors and partners.
An Emerging Technology
With the above in
For now, then, blockchain technology is something to be aware of, to prepare for, and to anticipate. It has the potential to change everything – and now is the perfect time to think about how it might apply to your industry or sector.