We believe the answer to the above question is, quite simply, “Yes.” Perhaps the more relevant question is, “when and how will Blockchain technology become part of my daily reality?” This question is harder to answer.
What is Blockchain Technology?
Unless you are following, or using, a cryptocurrency like Bitcoin or Ethereum, you may not know that Blockchain is the underlying technology that drives those digital currencies. To grasp this concept more easily, you can think of Blockchain as the operating system, like a phone or tablet, and of Bitcoin as an app on that phone or tablet.
Blockchain technology represents the coming together of several technologies and ideas that have the potential to solve many problems. Operating on the internet, a Blockchain is a network that allows transactions to occur in an environment that is (1) transparent, (2) without the need of a trusted intermediary, (3) immutable, and (4) secure.
There are many great resources that explain these features of Blockchain technology in detail. We recommend starting by looking at this video by Don Tapscott.
How Can Your Company Use Blockchain?
As you might expect, Blockchain technology’s use is not limited to Bitcoin and Ethereum. To provide another parallel example, in the early days of the internet, email was the application that most people initially used. Over time, however, the power of the worldwide web quickly expanded and other applications soon overshadowed email in terms of everyday use. Blockchain technology is poised to do the same.
If you are involved in commerce where digital currency is the norm, or becoming the norm, you will quickly become a participant in Blockchain technology. As you begin learning and implementing the technology, however, we recommend caution – transactions completed using Blockchain technology are secure, but irrevocable.
In contrast to transmitting your credit card information over the internet, Blockchain technology eliminates the intermediary in the transaction (your bank). This means that you or your company are assuming the entirety of the risk in the case of incorrect or fraudulent transactions.
Additional and Future Uses
Beyond digital currency, Blockchain’s uses are still mostly on the drawing board. But just as mobile phone apps exist to allow exchanges of Bitcoin, apps will be developed to support broader uses of the technology.
For example, Blockchain technology is being used today for certain private securities transactions, commercial real estate leasing transactions, and for tracking the provenance of diamonds. To complete these transactions, so-called “smart contracts,” which contain self-executing provisions, are being developed. These “permissioned Blockchains” are open to invited participants, unlike the “public” Blockchain of Bitcoin and Ethereum.
When Should You Implement Blockchain?
If lessons of the past are any indication, the earliest adopters of these applications may not reap the most benefits. But we can watch and learn their processes now to know when it is right for us to enter the fray.
Just like any other system or participation, we must understand the rules and integrity of the process. There are no current conventions or standards for evaluating, or auditing, the integrity of a Blockchain. With that in mind, we recommend moving slowly and deliberately when adopting the technology. But if the speed of Blockchain’s development is any indication, you won’t have to wait long for standards to emerge.
While you are waiting, keep watching and reading.
Please contact Clark Nuber with any questions about Blockchain or other parts of this post.
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