For the past three years I have heard a lot of buzz around the word blockchain, some say it is revolutionary, some say it is a bust. I never quite understood what it was so I thought it would be helpful to shed some light on the topic!
Currently, companies are facing new challenges in data management and security. From our current political climate we have seen the Ashley Madison breech, Anonymous Hackers, Apple phone hacking, etc. Security and having the ability to manage your data are becoming more important every single day.
So what is blockchain? Blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it amount a distributed network of computers. The key here is that blockchain uses cryptography to allow EACH participant on the network to manipulate the ledger in a secure way WITHOUT the need for a central authority.
Say a block of data is recorded on the blockchain ledger, it is extremely difficult to change or remove. To add/change anything you need to be approved by the majority.
So what are the different uses for blockchain you ask? There are a plethora of reasons to implement blockchain (eliminating middle men, easy to use, safe, secure etc.), but the technology is relatively new and there people are finding new ways to utilize blockchain daily! The first firm to utilize blockchain has been bitcoin. For those that are unfamiliar, Bitcoin is a network that created a new payment system and a completely digital money. There is no central authority or middlemen and it is pretty much cash for the internet.
However, there are many different ways blockchain can be utilized in todays world. Deloitte recently put out a study on how blockchain is disrupting the financial services industry by increasing speed, efficiency, transparency, and reduce risk across the board. Deloitte does not think blockchain will create a paradigm shift in the near future, but will likely affect a host of industries ranging from travel, retail, and even music.
Personally, I think that blockchain is going to explode onto the scene and firms and industries are going to take advantage of their capabilities. Below is a picture of how disruptive products and technology usually come to fruition.
You have the early movers/innovators who understand the technology very well and then you have the early adopters who use the technology. The biggest problem is closing the gap and pulling the early majority into the equation. In terms of blockchain, I think we have already had the innovators stage with bitcoin and are beginning to see the early adapters ideas come to fruition. Personally, I think within the next 10 years blockchain will have massive disruptions across multiple industries, starting with the financial services industry. Firms like (JPM, Goldman, Citi, etc.) have invested time and money into startups and research. I think it is only a matter of time before we cross the chasm into the early majority.
What do you guys think? Will blockchain be a bust, revolutionize our society, or be somewhere in between? Do any of you guys have any exposure to blockchain technology?
Below are some helpful videos in understanding blockchain better!