By dencg @ Shutterstock.com
I have repeatedly said that while I’m not a big fan of bitcoin the currency, I think there is a lot of value in blockchain technologies. (See here, here, here, and here for more on that).
Despite being the most inherently valuable piece of the crypto-currency craze, blockchain is also the least understood. With the power to change how business is done in real estate, shipping, material sourcing, and other industries.
At The Wall Street Journal, Christopher Mims explains blockchain:
What is blockchain? It’s essentially a secure database, or ledger, spread across multiple computers. Everybody has the same record of all transactions, so tampering with one instance of it is pointless. “Crypto” describes the cryptography that underlies it, which allows agents to securely interact—transfer assets, for example—while also guaranteeing that once a transaction has been made, the blockchain remains an immutable record of it.
Blockchain has the power to transform all these industries for three reasons. First, it’s genuinely well-suited to transactions that require trust and a permanent record. Second, blockchain typically requires the cooperation of many different parties. In cases where it’s implemented as open source software, it avoids the collective-action problem—the disincentives that prevent individuals from adopting something that would benefit them collectively—that occurs when a single company tries to push, and benefit from, a new standard.
The third reason is that hype I mentioned. The current excitement around cryptocurrency gives blockchain the visibility to attract developers and encourage adoption. Companies that have taken an “If it ain’t broke, don’t fix it” attitude toward back-office processes and logistics IT might be ready to spend big on updating those systems when they hear the buzzword “blockchain.”
Read more here.