Have you heard of blockchain? Whether or not you have, know this: Blockchain is here and it’s growing. In fact, one research firm projects that spending on blockchain solutions is forecast to reach $11.7 billion in the next four years. That, combined with the capacity it has to impact business as we know it is reason enough to give it some of your precious time. For businesses large and small, understanding the impact of blockchain is going to matter, regardless of industry. But before we dive in, we need to take on a simple question with a complex answer…
What is Blockchain?
In the simplest terms, blockchain is a decentralized record where data points are shared throughout a community of individuals, and everyone holds everyone accountable. Blockchain’s most popular association to date is with bitcoin, the digital cryptocurrency.
Block by Block
The basics of blockchain start with the understanding that it’s a record made up of a series of blocks (which are “chained” together). Each individual block contains data, and the type of data depends on the type of information being recorded.
If you think about it in terms of financial transactions, each transaction is its own block on the chain, and each block would contain data points specific to the transaction, like who it came from, who it went to and the day on which it occurred. With each withdrawal or deposit, a separate block is created, and all the blocks together make up the decentralized record.
A Community Network
Because the record is decentralized, and because there is an open community participating in and monitoring the ecosystem, it’s extremely difficult to fabricate data or forge transactions. Plus, blockchain communities are known to hold individuals accountable and share any wrongdoings throughout the community, which can make future transactions more difficult for those with a history of abusing the system.
Now, the topic I’m looking to cover isn’t the definition of blockchain; it’s the impact of blockchain for business. But, if you’re looking for more in-depth answers to the question what is blockchain, you can find them on PC Mag and Forbes.
Understanding Blockchain for Business
One attribute of blockchain that appeals to many areas of industry is that it provides a quick and efficient way to authenticate information, all the while helping to ensure that information is correct. Because of the way blockchain stores data, it’s extremely difficult to alter or forge information.
Higher Education Applications
Beyond financial applications, you’ll likely see advances in blockchain within higher education institutions as they capitalize on this structure as a way to more effectively disseminate information out to their communities while maintaining a strong record of events.
Another industry with a lot to gain from blockchain technology is healthcare. The practice of exchanging medical information has been an ongoing struggle, and many believe that blockchain’s unique capabilities might hold the key.
What do Businesses Need to Know About Blockchain?
With any new technology comes new risks, and blockchain is no exception. Some of the largest questions surrounding blockchain have to do with its lack of regulation, how it can be insured and how to protect privacy. These areas are highly important in any area of business, and especially so in the medical and the financial industries.
As a decentralized record, blockchains store snippets of data across many separate blocks. All of these pieces of personal and private information need to be simultaneously protected and kept visible to the community. Plus, some blocks can be made private, meaning only those with the encryption can view the data. Determining how to regulate blockchain will be a big question for 2019.
Another thing to know about blockchain is how it complicates security. You know as well as I do that keeping business data protected in the event of a disaster is essential for businesses, especially small businesses. In recent years, we’ve seen a decrease in ransomware followed by increases in crypto mining. Just like when ransomware came on the scene and forced everyone to protect their businesses against it, the new threat of crypto mining is using blockchain to run malicious software that’s difficult to detect and able to steal from a business.
When it comes to incorporating blockchain technology into business, it’s important to understand that these things I’ve covered today are already happening. In order for businesses to stay ahead of blockchain’s benefits and potential dangers, it’s essential to either understand blockchain solutions or partner with a technology provider who does.