If you are not familiar with the Blockchain it may be worth learning so more about it. Blockchain has been called by its proponents as the biggest technological revolution in the last 100 years. Bigger than the development of the internet. Those are some pretty big claims. Regardless of how big and significant history will decide that one way or the other. It is understood that it is significant. It is strictly defined as a digital ledger or all transactions made through it and kept encrypted using cryptocurrency such as Bitcoin, but also publicly available.
I have heard many definitions one of my favorite by Nick Szabo a blockchain expert described it as a fly in amber. A fly gets caught in the amber and if the amber is small with thin veneer it is kind of weak. But after several iterations, through the blockchain, the amber gets deeper and more protective and at this point you cannot alter the fly inside the amber. What does this mean to the layperson?
It means that you can enforce contracts and make exchanges of money between two unprotected parties without any type of outside intervention or enforcement. This is a very powerful concept. This means that you could be in Albania, and want to buy some grain from Zimbabwe (two of the most lawless jurisdictions in the world) and be able to make the purchase without even having to meet the other party and be 100% safe in knowing the transaction will take place as promised. Regardless of if you believe the blockchain will alter the world fundamentally this is pretty powerful stuff.
But there is more it can do. The blockchain allows people in other parts of the world or locally to exchange money where they could not before. If you are a poor farmer in Sri Lanka, and you go to the market to sell some fruit your choices are very limited. You find a buyer they pay you in cash and you go home hoping you don’t get robbed. Or maybe you spend a day or two going to the market and the buyer does not show or does not pay for the fruit.
But using a basic piece of ubiquitous technology a cell phone and the blockchain the same farmer will be able to make the deal via the blockchain with a binding contract. Even getting good faith money or an escrow, and then go to the market and make his transaction.
Another scenario is where you are an American and you need to transfer some money from the US to Italy. Maybe because you’re buying an apartment there. You will have to do an international wire transfer, that can be fraught with delays, government regulations on both sides, intermediary banks that must be involved in the transaction, and many fees. All for doing a simple ledger transaction. But with the blockchain none of this is necessary and the cost would literally be only a few cents.
Banks are paying very close attention to the blockchain, and so should all of us. I believe that the evolution of the internet is instructive of how I believe the blockchain will follow something similar. In the early days of the internet the large service provider telco’s wanted nothing to do with it, they fought it along the way. However, over time they were forced to adopt the internet as their main means of transport like we see today. I believe the blockchain will be used by all financial institutions in the end. But they will try to resist it at first. The beauty of the blockchain is that we can all use it. And the banks will not be able to control its evolution or its use.
As a corporate executive, this relates directly to the cybersecurity of your company. You will need greater and greater means of privacy and security to transport your most important resource. And the blockchain can give you this. It will become a competitive advantage into the future to use the blockchain with its privacy, security, and super low cost. And can help you differentiate yourselves from your competition. I will be talking more about the blockchain in future articles. Stay tuned there is a lot here.