5-Minute PriSim Panorama: Blockchain

You’ve probably been hearing a lot about blockchain and related cryptocurrencies (digital money) such as bitcoin and ether. But you might not be all that clear on what it means or why you should care. Us too…

So here’s a quick “PriSim Panorama” on blockchain, readable in 5-minutes or less (take a deep breath):

What it is:

  • Blockchain is an encrypted digital-database technology that can dramatically simplify business transactions.
  • It functions as a decentralized public ledger, like an Excel spreadsheet or a Google Doc, that controls and verifies shared information.
  • It’s the “spreadsheet” technology behind the verification and transfer of those bitcoins you keep reading about…
  • Using blockchain, parties can send secure, verified messages that transfer value and settle and reconcile transactions – no longer requiring a bank, PayPal, or a Western Union telegram in the middle anymore.
  • (actually, Western Union stopped doing telegrams in 2006)

Why you should care:

  • It’s got everyone’s attention because it has the potential to radically streamline business processes, reducing costs, time, and effort – and eliminating some back-office jobs.
  • As a “general purpose technology”, blockchain also shows promising applications in the Internet of Things.
  • It will likely transform many industries and functions over the next few years, such as:

– Banks, central banks, and financial services – through streamlined money and bank transfers, micropayments, taxation, and use of digital currency.
– Healthcare – by adding privacy and security in electronic records.
– Logistics – “smart contracts” and secure tracking of goods.
– Other – identity authentication, privacy, and ownership verification.

However, challenges remain in implementing blockchain. The technology is complex, it reduces the control companies have over their transactions, and regulators are still scratching their heads on how to monitor its use. But stay tuned – blockchain is already creeping deeper and deeper into businesses, and probably into your personal life.

And bitcoin? It’s just one of many cryptocurrencies that use cryptography (coded data transfer) and blockchain technology to secure anonymous transactions.

Tags:
Technology