How Blockchain Will Revolutionize Business and Money.

Did you know the technology likely to have the biggest impact on the next few decades has already been around for 3 decades. It's not Social Media, Big Data, or Robotics. It's not even AI. It's called the blockchain, the average person has heard of bitcoin, but that’s about as far as their understanding of what the blockchain is, goes.

I believe this is the next generation of the Internet and that it will change every aspect of business, government, and everyday common life. For a while now, we've had the Internet of information. I can email you a file, when I do, I'm actually not sending you the original, I'm sending you a copy, this is democratized information.

When it comes to assets, things like money, stocks, intellectual property, music, art. If I were transferring my ownership of something, it would be really important that I wasn't transferring just a copy of that asset while I still had the original. Currently we rely on systems we can trust like banks, governments, big social media companies, credit card companies, to establish trust in our economy. These systems are a series of checks and balances, a huge ledger system, to make certain everyone is doing what they say they will and the transfer of the asset and ownership, actually happens.

Overall those systems do a pretty good job, but there are growing problems. To begin they are centralized, which means that they can be hacked and increasingly are. Banks, governments, LinkedIn, Home Depot, and others have found that out the hard way.

They exclude a vast amount of people from the global economy.

They slow things down. I can send an email to someone on the other side of the world in a second, but it can take days or weeks for money to move through the banking system across the city let alone to another country and they take ridiculous fees to facilitate that transfer.

They capture and control our data, preventing us from monetizing it or using it to better manage our lives.

Our privacy is being undermined and the biggest problem is that overall we have vast wealth creation, but we have growing social inequality.

So what if there were a system that made it as easy as sending an email to send money, IP, ownership of some asset? Some massive distributed ledger system on computers all around the world that couldn't be hacked, and that could hold any type of asset of value. Something that would allow for instantaneous swapping of ownership of those assets without the need for anyone to oversee that transaction or get in the middle of it?

Well that is what blockchain technology offers.

So now people anywhere in the world can trust each other and transact peer-to-peer. Trust is established not by some big institution, but by collaboration of cryptography and by some computer code. Assets like money, art, data, etc. Are not stored in one central space but distributed across a vast ledger system. That's all the blockchain really is, a ledger system that tells anyone who wants to look when an asset was created and who owned it at any given point in its history. When a transaction takes place it's posted across millions and millions of computers globally. These computers are called miners.

These miners have massive computing power and every ten minutes, a block gets created that has all the transactions from the previous ten minutes and then the miners do some problem solving and they compete to be the first one to solve a series of very difficult equations. The first miner to complete the equation validates the block and is rewarded in a digital currency. In the case of the Bitcoin blockchain the reward is Bitcoin.

And then that block is time stamped and linked to the previous block to create a chain of blocks, ie. the blockchain.

So how does this create trust and prevent hacking? Well if I wanted to go in and hack a block to say i paid you money i didn't have, I'd have to hack not just the current block where our transaction would be held, but every in the entire history of commerce on that blockchain, not just on one computer but across millions of computers simultaneously all using the highest levels of encryption on most powerful computing resources in the world. That’s going to be a bit tough to accomplish. This system is infinitely more secure than the systems we have today.

That's the basics of the bitcoin blockchain but that is just one type of blockchain out there today.

The Ethereum blockchain is another and it has some incredible capabilities like the ability for you to build smart contracts.

It's a contract that has the ability to self-execute. The contract handles the enforcement, the management, performance, and payment of the contract. These smart contracts can do some pretty cool things.

Today there are projects underway to do everything from create a new replacement for the stock market, replace the need for title companies in real estate, better handle nations identity schemes, to creating a new democracy system that will enable elected officials to be held accountable to their constituents again.

So to understand what a radical change this is going to bring let's look at one industry: financial services. To make a payment at a store you swipe your card and a bit stream goes through a dozen companies and each with their own computer system and each usually taking a fee, and three days later a settlement occurs.

Well with a blockchain financial industry, there would be no settlement because the payment and the settlement is the same activity. It's just a change in the ledger.

Everyone in the financial industries are beginning to wonder if they can be replaced or how they utilize this new technology.

Why should you care?

Betting against this technology would have been like betting against the internet in its early days. In the short term with the .com bubble sure you might have been right but betting against the internet now all these years later would be absolutely unthinkable. I'm sure that crypto and blockchain will have its own .com bubble moment and some people will lose a lot in betting on the wrong horse, but that is why learning and educating is so important right now. Throwing your money around blindly is how you will lose your money. We should be looking at this from the technology and use case side. IN ten twenty thirty years, blockchain will comprise nearly every aspect of our lives because of how valuable and significant the technology is for storing, sharing and distributing information and value.

So that's it. I didn't want to get into the use cases for blockchain technology too deeply in this article. I'm working on another one where I will go over the use cases and dive into the ones that I think are really cool and have a lot of potential to change the world. Thanks for reading! If you want help learning more about this stuff or learning how you can implement blockchain or crypto into your company then schedule a free consultation call with me here and I would glad to talk to you about it.