What is Blockchain Technology?
Diamond industry royalty De Beers has been using blockchain technology to answer an age-old dilemma – how can we ensure the ethical procurement of precious stones? Tracr tracks a diamond from the moment it’s mined to the final consumer, detailing every step of the value chain.
Tracr is just one example that blockchain technology isn’t some far-off Science Fiction fantasy. It’s already in play, providing answers to real-world dilemmas in new and innovative ways. It’s also an example of how blockchain is good for so much more than Bitcoin and fellow cryptocurrencies.
Blockchain technology has been all over the headlines in recent years, being written about everywhere from Forbes to the Harvard Business Review. What exactly is blockchain technology?
We’ve compiled an introduction to blockchain to help you wrap your head around this emerging new technology!
What Is Blockchain Technology? An Introduction
Blockchain technology was originally developed by Satoshi Nakamoto. It’s designed to distribute information but not copy it. In their book Blockchain Revolution, authors Don & Alex Tapscott define the blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
To put it even more succinctly, blockchain technology is a time-stamped, unchangeable ledger. Each piece of data, known as a “block,” are fused using cryptographic principles, i.e. “the chain.”
This registry isn’t located in any one location. It’s decentralized, to use a term that gets thrown around a lot in recent years.
Visualizing Blockchain Technology
Blockchain is a way to verify transactions between point A and point B without involving a specific middleman. A block is created on one end, which creates a unique record with a unique registry. In between points A and B, the transaction will be verified by thousands if not millions of individual computers. This makes it virtually impossible to falsify a blockchain record.
To visualize how this works and understand why blockchain is important, imagine buying a ticket for a concert. The concert-goer would be point A and the venue would be point B. The ticket would be a block, in this example, which would then be verified on a ‘Ticket’ blockchain.
We picked the example of buying tickets for a reason. If you’ve purchased tickets for an event of any kind in recent years, you’ll know about all the ticket fees, which can sometimes almost double the cost of admission. In this example, however, all fees would be removed as blockchain is completely free.
Why Blockchain Technology Is Important
Tracking information has never been trickier than in the Digital Age. Anyone can be a publisher, a manufacturer, a marketer, or a retailer these days. You never know where your products or information are coming from. You also never know who you’re supporting.
Transparency is one of the biggest benefits of blockchain technology, evidenced by the fact that each block carries a complete record of every transaction. This is unprecedented in the world of finance, where every transaction could potentially be subjected to human error.
Decentralization is the other area where blockchain is so significant, as it’s an entirely revolutionary concept in how finances are handled. Traditionally, all financial transactions are handled through a centralized institution such as a bank. This means that banks practically have a monopoly on all financial transactions.
Not only does this create ethical concerns, it’s not the most efficient setup. Decentralization is not limited to finances, after all. It offers a revolutionary approach to information technology, as well.
An example of the centralized information technology setup would be the client-server relationship. When a server goes down, so does every computer connected to it. Decentralization nullifies that risk, making the network infinitely more robust.
Blockchain technology has only recently begun being developed in earnest. We’ve barely seen a small fraction of what this 21st Century technology can do and the ways it will influence business and society. It’s going to be big, there’s no question. And it will most likely be unexpected, as blockchain technology continues to disrupt established industries in new and novel ways.
Wondering How Blockchain Technology Can Help Your Business?
At Unvetica, we love applying the latest technological innovations to solve uniquely human problems.
Whether you’re just starting to wonder “What is blockchain technology?” or you’ve already got an idea on how decentralization could benefit your industry, contact us today and let us help you realize your vision!