Did you know the market for blockchain technology is projected to grow from $2 billion this year to nearly $40 billion by 2025? A market increasing by 20 times in five years is remarkable to say the least. You may have heard talk of blockchain wallets or blockchain apps—but let’s back up. What is a blockchain? Blockchain is a broad term for what is known as “distributed ledger technologies,” which can be tasked with creating a digital record of just about anything you can think of. And while we already have ways of keeping track of important records, there are fundamental differences within blockchain that make it so exciting.
The first difference is the way blockchain tracks and stores data. Individual “blocks” are linked together in a line (or chain). Each block represents the total amount of information about an important item up to that point (think a land deed or your medical records). Any changes are stored in an entirely new block that is created and added chronologically at the end of the chain. Got it? Another common analogy for blockchain is a financial ledger, where new entries are added and nothing is discarded; the main difference with blockchain is that the information isn’t tied to any one physical book—blockchain information is decentralized.
That means the information is distributed across a network of computers, making it much harder for cybercriminals to compromise or corrupt that data. But there’s another benefit to this model: peer verification. Before any new blocks of information can be added to the chain, a few specific things must happen. First, the computer adding the new block must solve a complex puzzle then upload that answer to the blockchain network. It’s only after the other computers on the network verify the answer that a new block is added to the chain. The process makes blockchain information highly trusted and therefore highly desirable.
Why is this significant? Because this new way of recording information has the potential to do away with so many middlemen that occupy our global marketplace. Currently, most significant transactions are handled by some sort of intermediary (like a lawyer or a bank) who helps facilitate a sale, transfer of property, etc. And this is necessary to both verify and protect the confidential information of each party and only reveal to the other party information necessary to complete said transaction. Well, a blockchain can do all that, which means bye-bye middleman, hello time and money saved. In order to handle the different types of transactions in our world, there are different blockchain models: public, private and hybrid (with the hybrid model being a mixture of private and public information).
Without the middlemen, transactions would be peer-to-peer (P2P) or directly from one party to another. And this new way of interacting directly with our important data and each other has the potential to fundamentally change the way the world engages in transactions. From blockchain wallets to blockchain apps, the application for this technology is seemingly limitless. So the exciting question to ask really isn’t what is a blockchain
, it’s how is blockchain going to revolutionize our lives?
The answer should be unfolding soon before our very eyes.
For more information on blockchain technology and how it could impact you or your customers, contact the experts at Ingram Micro.
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