Perhaps you’ve heard the term ‘blockchain technology’, perhaps not. But if you have noticed certain conveniences when you perform online transactions, such as quicker response times, faster transactions, and even faster shipping and tracking, then you have. And, if you’ve found in recent years that your retail therapy addiction has been facilitated, making it easier than ever to possess that designer handbag, furniture, appliances, a piano, even vehicles, well then you have blockchain to thank, we mean blame. What it is, why it exists, who it impacts, and where blockchain technology is going next is the subject of this article.
But first a little back story. To understand the value of blockchain technology one needs basic a knowledge about cryptocurrencies. We cannot see you, but already we know your eyes are glazing over. No worries, we’ll make it quick and painless. Remember the play money that you used as a kid? It worked the same as U.S. currency, but was not issued by the government. Cryptocurrencies are like that. They are issued by anyone and accepted by anyone who has an agreement with the issuer. These are backed by ‘real’ money, tangible items with a stated value such as jewelry or artwork, or services to be provided. If this seems strange, it shouldn’t be. After all you are paid a salary in exchange for your services, right?
Since crypto monies are virtual, and are not affiliated with any nation or governing body, there is a need to keep things honest, so their transactions are recorded in a virtual ledger. That ledger is a blockchain. Blockchain was created by web developers who saw a need to rein-in the Wild West Show that cryptocurrencies had created across the globe. Blockchain has provided a clearinghouse if you will, to ensure that, among other things, cryptocurrency is used responsibly. This means every virtual transaction is recorded so each leaves a trail that the IRS and other government can access and allocate. See? That didn’t hurt one bit! Or should we say, bitcoin?
As with all great technologies, it doesn’t take long for developers to find additional value for their code. Here are some of the many ways that blockchain is already impacting our lives along with speculation as to where it will pop up next.
- Payment processing: As an individual who is currently waiting for the email or text stating that my funds transfer from one financial institution to another has been completed (several days now), blockchain technology will provide a welcome change. It expedites the transfer of funds from one source to another. So while I wait for my primary bank to acknowledge another financial institution (while collecting interest and fees on my money in the meantime), blockchain would have validated and processed my request within seconds 24/7/365.
- Data Sharing: Analysts rejoice! Since blockchain’s purpose is information collection, primarily for regulatory agencies, there are already cryptocurrency agents experimenting with sharing and selling unused data. Since this data relates to a wide range of industries, this intel could be used to gain insight into consumer habits to improve service levels. etc.
- Regulation Compliance: Move over Cloud, here comes Blockchain. While the Cloud provides excellent backup, there is always the possibility that new security threats could breach this system. With its immunity to hackers and with no known infrastructure problems, blockchain provides an ideal data backup system.
- Regulation Compliance: Earlier in this article, cryptocurrency transactions were referred to as a Wild West Show. That is because before blockchain, these flew under the radar of federal regulators. Now all sales and transaction data is captured so that it is transparent to local, state, and Federal lawmakers as well as to the IRS.
- Vote Online: After every election there has been much ink spilled over possible voter fraud. Given its transparency, blockchain will enable citizens to vote online, but allow regulators to see immediately if any captured network data is altered in any way.
- Medical Records: Hospitals and medical facilities have trended towards software over paper records-keeping solutions for almost two decades. Blockchain storage would allow the patient to control who has access to their data and is more HIPAA-compliant than other sources.
- Virtual IDs: Microsoft is working on a way that individuals can take control of our digital identities. For those of us still getting used to opening our cell phones with our index fingers, this is a brave new, and very exciting possibility! Imagine being able to establish credit immediately, to travel anywhere without a passport and just access your identity online from your phone! With great opportunity also comes potential great risk, so we understand this concept is far from complete. Stay tuned!
Buying a home, a business, buying or leasing a car…: If you have ever bought or sold a home you know that there is a great deal of paperwork involved. With blockchain, however, whenever a deed, or title is to be transferred, this part of the process can be viewed and transaction online, thereby speeding up the process and saving a forest of trees!
To gauge the potential of this new platform, just imagine any agreement, sales or financial transaction, or legal action where paper exchanges hands. Now take it out of the equation and insert blockchain as the new variable. Exciting prospect, right? A technology that functions as a storehouse and a facilitator offers huge potential to individuals as well as for commerce. As a new technology, blockchain’s many positives include its value as a digital, decentralized platform that logs transactions without using a bank. More simply, its initial intention was to transfer money while recording data in ways that are both transparent and unchanging. Blockchain’s downside is that it is a new technology. All of its potential kinks have not yet surfaced and when they do, it is unknown how or when these can be remediated.
Therefore major businesses, especially multinationals, have been unwilling to take the leap of faith and leave their current transaction transmitting infrastructure for blockchain. No one wants to be the first to go ‘all-in’, but once some enterprise does, the herd will quickly follow. What remains to be seen will be crucial to the future expansion and success of blockchain as a data platform: its full functionality and scalability. This is a technological realm with limitless potential and this author looks forward to posting updates as it progresses. In terms of technology, we live in exciting times!