What is blockchain and how will it affect me?
The term “blockchain” is everywhere, and it is likely that you will interact with blockchain technology every day in the years to come.
Blockchain technology recently came to the public’s attention thanks to rising prices in cryptocurrencies, like Bitcoin. However, it continues to expand into almost anywhere information is stored, like primary voting, healthcare, and real estate. Startups are even using initial coin offerings (ICOs) built on blockchain technology to raise money instead of using a more traditional venture capital route. A startup company can release its own digital currency, which investors can purchase instead of buying shares in the company. In 2017, startups raised $6.8 billion through ICOs.
What is blockchain?
Blockchain technology creates public ledgers of transactions and distributes them in a decentralized manner to multiple servers. These public ledgers create reliable records of transactions, providing details like times, amounts, and transaction data. The technology also provides decentralized control over the ledgers. There is no single government entity or company that can control each transaction because of this decentralization. The information also cannot be tampered with after the fact because each transaction is effectively saved in a long chain with other transactions that are then distributed broadly.
While this technology has grown the most in cryptocurrencies given their transactional nature, it is adaptable to a variety of industries, which can be seen in the explosion in the number of blockchain patent applications being filed in recent years. For example, the U.S., EU, China, Japan, and South Korea collectively filed 1,248 blockchain patent applications in 2017, compared to 594 in 2016 and only 258 in 2015. It is being expanded into any industry where transactions need to be certified, and there is a race amongst blockchain companies to file as many patent applications as they can to claim space in this new sector. The response has been similar to the patent filings that occurred during the 1990s, when there was a spike in internet-related filings.
How is it going to affect me?
In the years to come, you will probably start to interact with blockchain technology on a regular basis without realizing it. Now it is most prominently being used in cryptocurrency, but it could be used in exchanging stocks, validating a contract, securing votes cast in online elections, and a host of other areas that require a verifiable, secure exchange. However, you won’t necessarily notice a difference in how you perform these functions. Cryptocurrency exchanges look like any other currency exchange. Verifying transfers or voting online will still look the same. The difference will be in the records of the transactions because these transactions will be far more secure and verifiable after the fact if they use blockchain technology to perform the exchange.
So it is likely that blockchain technology will eventually touch almost every aspect of your life. You just might not realize it.