If I now start talking about Blockchain, the majority of readers may ask themselves: “What is that? One maybe heard the term “Blockchain” a couple of times but it is hard to imagine a clear picture. And that is completely understandable.
As soon as I switch to the term “Bitcoin”, some bells may ring. Of course, that’s this crypto currency everybody is talking about at the moment! The one that is traded publicly at the stock exchange – with a highly volatile value.
A major benefit of Bitcoin is, that transactions with it are incredibly secure. But why is that? One reason is, that intermediary institutions like banks or corporations grow obsolete with it. The transaction process itself happens in a highly decentralized network of peers e.g. in a long chain of participants. Chain… Does that ring a bell? 😉
That is the explanation of Blockchain. Well… kind of. OK, to be honest it’s round about 1% of its explanation and still very superficial. But it is a starting point.
Blockchain is a highly complex protocol, which still evades my holistic understanding. I do say though, that I already acquired enough knowledge to briefly talk about it.
Let’s get it on:
In 2008 Satoshi Nakamoto described first, what we now refer to as “Blockchain”. The first actual chain was launched in 2009.
One have to imagine the Blockchain as a distributed database that, once initiated, always has to relate onto previous information (blocks) in its history. Following this intertwined, assembled structure a retrospective change in the chain is not possible without hurting its integrity. The blocks, also referred to as “hashs” are being mathematically created by processing power of computers. That is also called “Bitcoin mining”. It happens in a process of general acceptance (in the peer to peer network) via various methods. The most popular method is “Proof of work” which outruns intermediaries.
Motherboard points it out like this:
“The Blockchain is a completely decentralized, democratic database. A kind of public cash book for Bitcoin transactions. In order to control the Blockchain alone, one would have to bring all servers under his or her control – which is almost impossible because they are distributed all over the globe. The absolute transparency of the Blockchain makes it so democratic.”
Quite abstract, right? Again, this description is very superficial and it can barely depict the complex mathematical and technological processes which enable it – but it can draw a rough picture.
Now, is Blockchain a temporary appearance or a disruptive development?
If one consults literature and industry / technology experts, a quite clear picture arises. That is, that Blockchain has the potential to significantly change the global economy and its processes. Each and every kind of transaction can be executed and secured via Blockchain – it does not end with Bitcoin. The fact, that this system evades government control makes it very interesting for many people.
But as said, not only financial transactions will change, but also processes like elections, medical advisory or lawsuits. Contracts will fulfill automatically a breach of contract is not possible. Blockchain is one of the enablers for this situation, providing 0% probability of error. It will probably become the set algorithm and define a new standard for the upcoming new economy computer infrastructure.
In the grand bookshelf of digitalization, Blockchain is one book – but a very significant and much consulted one with an incredible magnitude.
My answer though is: Yes, Blockchain is a disruptive technology and development.
I am already looking forward to discovering the change it is going to initiate in the near future