In the early 1900’s if Henry Ford asked people what they wanted, they would have said faster horses. Essentially, proving the point that the consumer doesn’t really know what transformatory customer experiences could be! Secondly, people care little about the technology powering these very iconic experiences.. However, the markets do- evident by the ballooning value of bitcoins, hitting a record high post Trump’s election to the White House. The point being- wall or no wall, money has to be remitted across the border and people will find alternative and efficient ways (Bitcoins), when the traditional routes are blocked or taxed.
Before jumping into the nitty gritties of blockchain, let’s ensure we are all on the same page.
What is Blockchain?
Blockchain is the brainchild of a group of people (or a person) that go by the pseudonym, Satoshi Nakamoto.
- It is an incorruptible digital ledger of transactions that can be programmed to virtually everything of value.
- It’s a shared view of the current state of a marketplace, and the history of all transactions that led to that current state. In plain English it would translate to, “If your assets are on a blockchain, no single company or operator can take them away from you”
- This Shared Ledger can also be described as transactional database.
The key advantages being its robustness, transparency and flexibility over traditional “disparate” ledgers. Blockchain is ideal for applications with the following characteristics: Have multiple writers, Need immutable and traceable history, have a high degree of transparency, Limited trust between participants and are transactional in nature.
What are Bitcoins?
Its a type of digital currency, created and held electronically. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world. However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network; and the transaction history is stored on a shared ledger i.e. blockchain providing the required transparency.
What are other use cases of Blockchain outside bitcoins?
I found it rather fascinating, when a Sr. Analyst recently said to me, “We have an amazing solution in blockchain, we now need to find a problem to solve”. We had a great discussion following it, and came up with some of the following use cases which were absolute no brainers: Guaranteeing Digital Identity, Recording IoT transactions, Validating health records and land registries.
- Internet of Things (IoT) payments and traction: shared ledger (blockchain) may allow machine-to-machine authentication and micropayments and continuous traction of transactional activities. An algorithm could be used to broker an arrangement for a room rental as a smart contract, with the smart lock on the front door being provided instructions to open when the renter arrives. Money would be held in escrow by blockchain and funds released on fulfillment of the contract. This dis-intermediates not only digital banking companies but also Airbnb
- “Proof of provenance” provided by shared ledger can be used by insurance companies as a source of reliable information about the history, reliability and origin of a document, digital good or physical good with digital credentials.
- Blockchain could also unlock the ability to provide, “Certification of identity attributes and credentials” (e.g. name, address, age, phone number) on shared ledger (blockchain) system which is absolute necessity currently.
Einstein famously once said,”If the facts don’t fit the theory, change the facts.” Thanks to blockchain those facts might not be easily swayed anymore!
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