You may as a business owner or executive be asking yourself- What is Blockchain tecnology? And what does it matter to me? There has been a lot of hype surrounding Bitcoin recently, but more recently businesses, governments and financial institutions have begun investigating the Blockchain.
What’s all the hype?
In the world of finance and particularly, FinTech 2015 was very much “the year of the blockchain.” This happened for a number of reasons. There has been a definite acceleration in investment and investigating from a large number of local and international companies and financial institutions.
It has certainly taken these large companies a long time to realize the merit and new levels of innovation achieved through this technology. Standard Bank famously went as far as trialing integration of Bitcoin in 2013, before others even knew what a Blockchain was! Since then many other local financial institutions reportedly doing their own investigations.
So What Is a Blockchain?
Essentially it is based on secure cryptographic protocols and is a publicly distributed ledger and database that is trust-less and permissionless.
In the case of Bitcoin, it operates on a open source peer-to-peer network. Every miner on the network confirms any changes to the ledger over 15 minute intervals.
The first miner or mining pool to complete a block of transactions is awarded automatically for the processing power they have input. The blocks happen in succession and that’s why we call it a chain.
It is a constant and rapidly evolving concept, but here are the key points you need to know. There are further links with more detailed discussion at the bottom of the page.
- It can be used to transfer value or information in a trust-less and secure manner.
- It can facilitate and track so called “Smart Contracts” which pushes the envelope with regard to The Internet Of Things.
- Remove intermediaries and allow the end user to interact directly with the ledger.
- Reduce costs of transferring value and money in a border less manner to near zero.
- Near instant secure and border less transactions.
- Automate payment protocols permanent, irreversible and tamper-proof.