Why Is Blockchain A Big Deal?

Why Is Blockchain A Big Deal?
Source: PYMNTS.com

You’ve probably heard the term blockchain thrown around recently. And you, like me, probably pretended you knew what it meant when it came up later in conversation. Don’t be ashamed, I do this all the time. For about three months, back a little while ago, I kept nodding and smiling when people brought up UHD, or Ultra High Definition. It’s not the same as 4K, just so you know. It’s a lower resolution. Thank me later for sharing this golden nugget of information.

But this isn’t going to be about UHD. Instead I’m going to share what blockchain is, and what it means, so that you may now smugly take part in blockchain related conversations, holding your head high in the knowledge that you are technically savvy. And yes, blockchain is about to become a pretty major thing, as far as I understand. Some smart people with glasses are already saying that blockchain may well revolutionise industries worldwide.

Blockchain Briefly Explained

Blockchain is essentially a method by which to keep track of permanent records. Caches of information, referred to as blocks, are linked across a network of computers. Importantly, each block has a reference to the block before it, and will not update if that previous block attempts to make a change, but has fallen out of sequence. Which is to say; blockchains will very clearly and obviously show if anyone has attempted to alter the permanent records in an incorrect way. And, all chains beyond the point of tampering will refuse the change.

Yes, of course blockchains use insanely difficult to crack cryptography as well, but this is almost unnecessary given how cleverly the blockchains are setup. To put it in perspective, for an unwanted change to occur, every existing blockchain computer would have to simultaneously make an extremely, virtually impossible hack at the same time. Why? Because blockchains don’t use a central server. They are independent, and this is the key of what makes the system so ingenious.

In a nutshell; blockchains are a tamper proof way of making transactions.

What Does It Mean?

So this is all good and well, but what exactly does it all mean? It simply means that with blockchain technology, the way people do business is about to change in a very big way. Imagine doing an online financial transaction, and that transaction happening instantly, as opposed to over a few days. Since the transaction will no longer have to go through a centralised server, a middleman is removed, and massive amounts of hassle are saved. Blockchains are peer to peer, remember?

The down side is that this digital transaction revolution means that a great many people are about to lose their jobs, which is obviously a little concerning. But, with every major technological advance, a few eggs are bound to be broken along the way. Though, you have my deepest sympathies if you lose your job to a blockchain. God forbid the day when they find out how to write blogs with software.

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More Than Just Transactions

But here’s where it gets really interesting. Blockchain does not just apply to transactions. Although the technology was invented specifically as a way for cryptocurrencies to work, and will primarily be used for financial transactions, it has other very important applications. So if you’re the person who invented blockchains, (the mystery man named Satoshi Nakamoto), I hope you had a patent, and are getting very rich.

Blockchain can be used, feasibly, in just about any situation where records need to be kept in a tamper proof environment. Such systems are already being rolled out for voting, and will, drastically, reduce the amount of time from when votes are made, to the point where they are collaborated and counted.

Such systems may also be used with medical records, massively improving the accuracy and reliability with which medical records are shared. In fact, when you think about it, there are few industries that will not benefit in some way from this new technology.

What Else Is Great About it?

So blockchains make record sharing super reliable and easy. But what else is impressive about it? Well, perhaps the most amazing thing is that blockchains also make financial record sharing extremely transparent. It’s near impossible to change the blockchains, but the key information about transactions is not difficult to view at all.

What this means, if you haven’t already guessed, is that accountability in business is about to increase in a very, very big way. So much so that I can’t help but sit back and gasp. This is perhaps the important part of this new system, and if you can’t figure out why, you probably haven’t watched many detective or police procedural shows in your life.

I, for one, am thrilled about the scandals that are about to occur, once blockchain becomes standard for all banking systems.