Have you heard of blockchain? Since the cryptocurrency boom, blockchain has been more prevalent in our technical dictionary. But what exactly is it and why should anyone know of it? Well, it looks like blockchain methods will ultimately replace many third-party vendors on the Internet. Eventually, every business and personal computer will use blockchain technology to protect data.

Currently, most blockchain technology is used for cryptocurrency. It is moving slowly across the financial sector, being utilized by mobile wallet apps and large banking institutions. They use different types of identity management to verify the blockchain user. Once connected, the transparency of this emerging technology is really neat. Seems like a bit of an oxymoron, having a platform focused on privacy and security but also allowing immense transparency. However, a person’s identity is hidden via complex cryptography and represented only by their public address, according to blockgeeks.com. For example, if you were to look up a person’s transaction history, you will not see “Bob sent 1 BTC” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”. So that’s where privacy and transparency meet in the middle.

Next is their ability to merge into a decentralized system. The helpful thing about this is certainly security. If data is centrally stored then everything a hacker wants is easily discoverable through a centralized system. Another great point for decentralization is the very real possibility of wasting time for data. If the centralized local server were to crash, go through an update, or even becomes corrupted you are completely halted until the issue can be cleared. Whereas a decentralized system works as if everyone owns a copy of the data. There is not just one server or computer storing the information. 

Then of course, immutability. Which means that once the data has been entered in blockchain it cannot be tampered with. Not only that but it shows accountability through transparency. To further protect your privacy and identity, blockchain uses the hashing process to record data. This is obviously why blockchain has done so well amongst financial institutions and other money oriented entities. Everyone can see a transaction (the block) through the specified timeframe, place spent, or whatever specific organizational schemes is (the chain). If a document is tampered or changed it becomes very obvious in the mixture of numbers and letters during the hashing and encryption process. No wonder financial institutions are the current blockchain leaders.

The future of blockchain is very exciting! There are several up and coming business applications that will thrive with blockchain technology. Some things coming to the forefront for businesses are smart contracts. These are ledgers that enable coding simple contracts that will execute when specified conditions are met. Crowdfunding is also a big one moving forward with blockchain. Crowdfunding initiatives like Kickstarter and GoFundMe are doing the advance work for the emerging peer-to-peer economy. The popularity of these sites suggests people want to have a direct say in product development. Blockchains take this interest to the next level, potentially creating crowd-sourced venture capital funds. Simply decentralizing file storage on the internet brings clear benefits. Distributing data throughout the network protects files from getting hacked or lost. Then, of course, migrating this technology to IoT devices, just to name a few! It’s important to be in the know so your business can hop onto the blockchain movement and not just be stunned by it.