By: Trevor Brown, Senior Project Manager
So Blockchain…what is it? Let’s start with what it isn’t. The term is tossed around quite a bit, as it relates to Bitcoin, on sites such as The Silk Road. Blockchain, at least in some circles, seems to be synonymous with nefarious activities and shady online personas, but that shouldn’t be the case. Blockchain technology, in all of its forms, has many reasonable and perfectly legitimate business, government, academic, and social applications. So while Bitcoin certainly uses Blockchain technology, that particular cryptocurrency is a very small example of the overall power of Blockchain.
Now, what IS Blockchain? Most of the time, people are talking about distributed ledgers, i.e. a list of transactions that is shared among a number of computers, rather than being stored on a central server. A decent working definition is “a distributed database that maintains a continuously-growing list of data records hardened against tampering and revision,” according to The Economist.
Confused yet? Yeah, the concept, and the underlying technology, can each be a bit obtuse. Let’s use an example to illustrate:
I think one of the best commercial applications would be an aggregated rewards program, maintained in a closed Blockchain system by a series of horizontal industries that do not compete in a direct manner, but rather share many clients across a spectrum. The rewards, we’ll call them “MagaPoints” for simplicity, would be used to buy services at all participants. Picture a car rental company, a national coffee chain, an airline, and a hotel chain.
One customer will likely use this collection of services during a single trip, whether for business or leisure. So within the confines of the closed network, a client could use their rewards points from a coffee purchase to upgrade a flight or use the rewards points from a car rental to acquire a hotel room.
The client has ease of transaction, without having to juggle multiple rewards programs, while having peace of mind, knowing that at no time was their personal information utilized. Therefore, saving them from exposure to identify theft or fraud. The entire transaction, and all of its parts, are stored in an open public forum, allowing for a seamless transaction that was 100% transparent.
The storage functionality of Blockchain is literally without limit. It could store your car title, the information on postal packages, or your bank records – just to mention a few uses. Because the technology is stored on a decentralized ledger that is accessible to nearly everyone, each of those would be nearly tamper-proof. This is because changes to the ledger are added instantly and are accessible by any user. So where does it go now? The technology has endless possibilities across data storage, monetary transfer, government transparency, and more. I say embrace it and enjoy the ride…