What is Blockchain Technology and Why Should You Consider Using It?
In a digital world making sure that a transaction is safe, a document is authentic or a service has clear records is key to attracting your customers. Trust in business is always needed. When you are dealing with someone who isn’t based in the same country as you, it is often essential.
When it comes to tech there are many ways that you can ensure the security and validity of your information and documents. Blockchain is one of those ways.
So, what do the following have in common?
- Bitcoin – the online currency
- Everledger – a global digital registry for diamonds
- Provenance – an app that tracks the supply chain of products and shows users the stories behind them
The answer is Blockchain. In this blog I’ll be looking at what Blockchain is, how it works and who has been using it to bring trust to their tech.
What is Blockchain?
Blockchain is a digital ledger. It records transactions with a timestamp and a link to a previous ‘block.’ This means that once each record is created, it can’t be altered.
Blockchain ledgers are distributed. They aren’t hosted on one server but distributed across many. This means there is no central place to hack or attack, and makes altering the information on the ledger impossible.
Distribution of the ledger also means that many users can create transactions at the same time and each of these will be recorded. It also means that the information on the ledger is public and accessible at any time.
Don and Alex Tapscott, authors of Blockchain Revolution, describe it as
‘an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.’
How Does Blockchain Work?
The most well-known use of Blockchain technology is Bitcoin. The online currency is now worth over $2k per Bitcoin and uses Blockchain to keep a distributed ledger of all transactions made in the currency.
Using Blockchain makes Bitcoin different from any other currency. It isn’t backed by a government, the way that the majority of currencies are. It also only exists online. There are no Bitcoin notes or coins to hand over. Each transaction is solely made between users online.
Everledger, one of the other examples I used at the start of this article, uses Blockchain to create a ledger for diamonds and other valuable assets. To date it has over 1 million diamonds registered securely.
Everledge uses both public and private sides of Blockchain technology to create a hybrid model. They describe this as ‘the best of both worlds’ as it gives them
‘high security of the public blockchain combined with permissioned controls in private blockchains that allow us to better serve the industries we work in.’
Provenance is using Blockchain to document the supply chain of products and food from end to end. Knowing where your food or clothes come from is a growing trend in our global world. People want to know where the cotton to make their t-shirt was grown and harvested. But the journey after that is just as interesting.
Provenance documents all these stages to tell consumers a story about the origins of their products. Users can enter a unique ID from products to find out how they made the journey to the shelves.
They see the use of Blockchain as one that ‘empowers brands to take steps toward greater transparency by tracing the origins and histories of products.’
What could be done with Blockchain Technology?
It is clear that the security that Blockchain offers has many benefits. This means it is great as the building blocks for many new services and apps.
Ameer Rosic, CEO of Blockgeeks, sees Blockchain as bringing about change in many areas in the coming years. He thinks this could include the distribution of cloud storage, confirming your digital identity, and digital voting.
He also talks about smart contracts. These could be programmed to release money when a certain set of conditions were met, without the need to be triggered by any one person. This type of contract could also make it easier to change your mortgage deal or update your will.
There are clearly so many ways in which Blockchain technology could be used. Stay tuned to the blog to find our more as we look at this in more detail in the coming weeks.