Blockchain - what the h-e-double-hockey-sticks is it?

Let’s start with the simple stuff. Blockchain is a technology that allows systems to record information that should be unchangeable. This means it’s incredibly hard to hack, steal, or alter the information that’s on the chain. “But Wysh,” you ask, “how is that possible”?

Well, blockchains are a type of Distributed Ledger Technology (or DLT). These shared ledgers help record transactions and other assets. Some of this information is grouped together in individual “blocks” which come with storage space and randomly generated numbers for identification. These blocks are then linked to other blocks, which are shared across various computer systems. By linking the blocks together, this creates the “chain.”

So a blockchain is just a network of storage blocks shared between a group of computers, also called Nodes. As such, no single user can alter or change the information on the blockchain. If no single user can change what’s on a block, then, theoretically, there’s no single point of failure. For blockchain enthusiasts, this decentralized format offers new types of security to try and limit fraud.

How is blockchain changing the landscape?

Even though we’re talking about it now, blockchain technology has been around for a good while. Computer engineers were discussing the possibility of decentralized digital currency back in the late 90s! But things really took off in 2008. A developer(s) working under the pseudonym Satoshi Nakamoto released a white paper that established the model for a blockchain.

Since then blockchain has been a rising star in tech spaces. Now businesses are looking to integrate blockchain for a number of reasons. For example, the DLT model can allow for more secure tracking of shipped goods for businesses. Insurers can make use of blockchain to create smart contracts and prevent multiple claims on the same accident. And health care providers can use blockchain to securely share and monitor their patients health information.

And that’s before getting into the ways blockchain is used to develop cryptocurrencies. A cryptocurrency is a digital or virtual currency that is used to conduct transactions securely. All cyrpto transactions exist on the blockchain. So it’s easier to keep track of what money went where, and to whom. With such emphasis on maintaining secure records, we can see why blockchain has garnered the attention that it has.

History of Blockchain

What’s the future for blockchain?

Blockchain is hot right now, and there’s evidence it’ll get even hotter. Deloitte’s 2021 Global Blockchain Survey showed 76% of respondents strongly believe that blockchain technology will only become more necessary. The respondents trust it'll serve as a strong alternative to, or even replace, fiat (government-issue) currencies. Business leaders across many sectors believe that blockchain technology will bring a seismic shift for numerous industries.

Currently, blockchain technology is seen as having a lot of potential. According to Gartner Inc, 20% of large enterprises will use some form of digital currency by 2024. Companies like AMC and PayPal have already authorized crypto transactions using blockchain. There’s discussions of more robust government regulation of crypto and other blockchain uses. That will help further the tech’s mainstream legitimacy.

Conclusion

With such explosive growth, it can feel hard to keep up with all the changes. Blockchain is a new technology that’s continuing to evolve before our very eyes. We can plan the prettiest picnics, but you can’t always predict the weather 100%. Many new things come with a level of uncertainty. Especially when they affect this many industries. Whatever the future of blockchain holds, it’ll continue to leave its mark in the fintech world.