Blockchain is off the chain!
We are now living in the era of postmodern technology, and it’s changing how we interact with each other on a business-to-client as well as a business-to-business basis. So what is driving this new change and, most importantly, what will drive change in the future?
According to a Gartner report, Blockchain’s business value-add will grow to $176 billion by 2025. And that’s just the beginning. Blockchain isn’t just another tech trend or a buzzword. Blockchain is completely changing how we handle security, transparency, and financial transactions. But what is it and why are major corporations so interested in it?
The basics of Blockchain
The Bitcoin boom and the exponential growth of cryptocurrencies that are being used in a countless number of industries is staggering. However, not many CEOs and business gurus are aware of the underlying technology that powers cryptocurrency – Blockchain.
Blockchain technology is a shared database, basically a ledger, that everyone trusts and everyone can access. It allows two people to exchange currency or other assets without middlemen. All transactions are stored in the database, which is a permanent record that cannot be altered or backdated. It’s a technology based on trust – trust in the integrity of the database. Blockchain has no central authority figures, like for example a bank, making it a decentralized and distributed system.
What Blockchain could mean for your business
Traditional paper-pushing companies can fall victim to fraud, embezzlement, or simply an office fire, rendering their business null and void in terms of integrity. There is 0 chance* of this happening with Blockchain. You can’t defraud an algorithm, or withhold funds from stakeholders for no reason, and you certainly can’t burn all the computers and data centers to the ground.
* There is one way hackers could break Blockchain and change information in the blocks but this can only happen if they have control of at least 51% of the computing power on the ledger.
The benefits of using Blockchain:
- Significant cost reduction across the board
- A highly secure system
- No intermediaries
- Accurate and instant transfer of funds and information
- Complete integrity and infallibility of data
What every CEO should know about Smart Contracts and ICOs
What’s a smart contract?
Essentially, a smart contract contains a set of parameters in a digital form just like a regular paper contract. Only unlike paper contracts, the terms and conditions for the parties are programmed in computer code. They are driven in part by the technology that hosts a smart contract (typically Blockchain), and are self-executing. Because smart contracts are regarded as irrevocable, they cannot be stopped or cancelled unless the outcome of a contract depends on an unmet condition.
Nick Szabo, who conceived the idea of smart contracts back in the 90s, said the following in his foreword to the Chamber of Digital Commerce’s Smart Contracts: 12 Use Cases for Business & Beyond
“The humble vending machine is the original form of a smart contract. At its core, a vending machine is a security mechanism: the amount in the till should be less than the cost of breaching the till. Additionally, the machinery reflects the nature of the deal: it computes and dispenses change as well as the customer’s choice of product. Today the most secure environments for smart contracts are the most mature public blockchains, which are designed for trust minimization instead of trusting the often private and insecure system found resident with a central party.”
How do startups use ICOs?
Initial coin offerings (ICOs) were inspired by initial public offerings. Startups use them to sell stock to investors before their product is released. But unlike IPOs, investors generally don’t get actual ownership rights in the startup. Of course, as the name applies, ICOs use Blockchain technology as a way to protect against any security issues.
What about Ethereum?
Ethereum is a public, open-source blockchain that enables programmers to build applications, write up smart contracts, and program ICOs. Anything written using Ethereum runs exactly as programmed without any chance of fraud, censorship or third-party interference.
Takeaways
Now is the perfect time to transfer a part of your business or business practices to use Blockchain. The technology is still relatively young, and is expanding its capabilities to industries like healthcare, insurance, securities, among others.
Talented coders and managerial staff are required to facilitate and support a Blockchain-based business. Smart contracts and ICOs are just the tip of the iceberg. You can either be on the cutting edge, or you can be left on the curb while other more successful CEOs pass you by. Which side will you be on?
