Blockchain, the distributed ledger technology mostly known as the backbone technology behind Bitcoin, is one of the hottest and most intriguing technologies currently in the market. Since 2013 Google searches for “blockchain” have risen 1900%. Similar to the rising of the internet, blockchain has the potential to truly disrupt multiple industries and make processes more democratic, secure, transparent, and efficient. Entrepreneurs, startup companies, investors, global organizations and governments have all identified blockchain as a revolutionary technology.
It can be used as a ledger to record transactions that transfer value. Almost any type of value. From cryptocurrencies to intellectual property rights, from real estate to diamonds.
To generate a new block in the chain, transactions between two (or more) parties need to be validated – to make sure they are real and true – which usually happens through miners. When enough miners validate a transaction, it becomes part of the blockchain.
What are the most important benefits?
- Disintermediation & trustless exchange
Two parties are able to make an exchange without the oversight or intermediation of a third party, strongly reducing or even eliminating counterparty risk.
- Empowered users
Users are in control of all their information and transactions.
- High quality data
Blockchain data is complete, consistent, timely, accurate, and widely available.
- Durability, reliability, and longevity
Due to the decentralized networks, blockchain does not have a central point of failure and is better able to withstand malicious attacks.
- Process integrity
Users can trust that transactions will be executed exactly as the protocol commands removing the need for a trusted third party.
- Transparency and immutability
Changes to public blockchains are publicly viewable by all parties creating transparency, and all transactions are immutable, meaning they cannot be altered or deleted.
- Ecosystem simplification
With all transactions being added to a single public ledger, it reduces the clutter and complications of multiple ledgers.
- Faster transactions
Interbank transactions can potentially take days for clearing and final settlement, especially outside of working hours. Blockchain transactions can reduce transaction times to minutes and are processed 24/7.
- Lower transaction costs
By eliminating third party intermediaries and overhead costs for exchanging assets, blockchains have the potential to greatly reduce transaction fees.
Blockchain technology has the potential to disrupt multiple business models and industries. It has the potential to massively reduce cost and add efficiency while providing next level security and privacy. It might revolutionize the world as much as the the e-mail protocol STMP did 20 years ago.
Blockchain technology will be a perfect enabler for differentiating, innovative business models.