From the World Economic Forum in Davos to every other page on Indiegogo, blockchain has conquered the hearts and minds of countless entrepreneurs, business owners and investors of all shapes and sizes.
Claims that the invention of blockchain is as big (if not bigger) than the invention of Internet are heard more often. What is particularly interesting about the situation is that such claims, although brought upon by the rise in Bitcoin’s price, don’t seem to end alongside its recent fall.
This further proves a simple concept: investors never came for crypto per say, but they were rather exploring the opportunities granted by a new technology. Needless to say, the experiment was a success as we are expecting to see global spending on Blockchain breaks through $11 Billion in just 4 years.
This raises a question: If not the altcoins, what makes blockchain such an important player on the tech market?
The answer hides in the way the technology works.
You’ve probably found a hefty amount of definitions to blockchain by now. The simplest one is the comparison to Google Sheets.
Blockchain works like a public ledger that is stored on the nodes (computers) in a network rather than in a single, centralized storage like a server. What this means is that every change is visible and traceable. Just like with Google Sheets, everyone who has the rights to access the document will see the changes done in it in real time.
There are a few fundamental differences though. For once, there is no need for a server. Data doesn’t need to travel somewhere in order for the changes to get approved or applied.
Secondly, you can easily trace the change and the person who has made it on any stage of any process without sacrificing privacy as all of the transactions are encrypted.
Here is an example. You have a friend who has a Bitcoin wallet. You choose to send some Bitcoins over to a friend. The network will be notified that account A wishes to transfer a certain amount of altcoins to account B. The members of the network will verify the transition hence everyone is ware of the exchange between A and B. Not a single living person in the world know who A or B are.
This is where the magic happens.
Can you trust a machine?
Our analysts at TrendLine have created a definition of our own: Blockchain is a system that defines trust with mathematical calculations and programming code. Or, in simpler words, it creates strict rules that make the very concept of trust irrelevant.
Here is an example. Imagine you are buying a guitar online. How do you manage the payment? Do you send the money first in hopes that the seller is not a cheat? Does the seller mail the guitar to you in hopes that you are not a cheat? Or do you find a third party consultant and entrust it with handling both the guitar and the money in hopes that that consultant is not a cheat?
With blockchain, you can sign a digital contract AKA the smart contract. Your money will be locked in a digital wallet until certain conditions like the confirmation of the shipment are met. Once all is done, the seller will get his money.
The conditions are clear, the money are safely encrypted and every stage of the process is documented in code meaning it is not possible to break the agreement.
Now add blockchain’s traceability into the mix and create a chain of smart contracts designed for something grander than online purchases and you will get an unlimited number of use cases in business.
Imagine automated chains of manufacturing, shipment, logistics and sales in a Cola factory where every can is traceable even before it hits the conveyor belt! If something is wrong with at least one Coke not only do you know about the happening and the reasons for it, but the system automatically blocks that can from proceeding forward through shipment to the store and to the end-user.
Now imagine having the same system in HR, a hospital or even in the government – the clarity, transparency and the lack of reasons to “trust” is groundbreaking, to say the least.
This, and not the piece of Bitcoin or any other digital currency for that matter, is what makes blockchain such an interesting field for investors.
And the best part is that your possibilities are endless. But don’t take just my word for it!
The big guys know what’s up. Microsoft Azure Enterprise clients are already granted access into the Ethereum blockchain network where they can use Smart Contracts to their benefit.
Remember how we said that the data in a network is distributed among the nodes (user’s computers) and how it excludes the need for a server and maintenance? Well, Google is not falling behind in the new tech arms race as they are working on a blockchain-based solution for their cloud services.
Awesome, right? But what about the community? Blockchain has a wide array of solutions for that as well. In a Smart City, sensors will be able to gather, analyze data and even predict scenarios regarding to the levels of power consumption, temperature, water levels, pollution and so much more thus making our world a better, cleaner place. The Taipei and IOTA partnership is further proof of such possibilities.
Such niches as distribution, manufacturing, journalism, advertising, healthcare, logistics, civil rights activities and e-voting are just the tip of the iceberg for potential use of blockchain.
The future is here. It really is. And our team at TrendLine is here to help you build it. So, if you still have any questions regarding blockchain or if you wish to find a team with experience in the field – feel free to contact us at any time.