Beyond bitcoin: what emerging blockchain technology means for your organisation
Crypto currency Bitcoin is gaining increasing attention as an alternative to existing financial options. It offers a highly secure way for parties to exchange funds without the need for an intermediary such as a bank.
Yet Bitcoin is only one application of the technology that underpins it. Dubbed blockchain, this technology has the potential to revolutionise everything from billing systems and contracts to supply chains and even electronic medical records.
In reality, Bitcoin is really just the tip of the iceberg when it comes to blockchain deployments. According to analyst reports, usage is predicted to grow at a compound annual growth rate of 61.5 per cent until 2021. This means total transaction values are estimated to rise from $US210.2 million in 2016 to $US2,312.5 million by that year.
The concept of blockchain
In essence, blockchain is a system of distributed records that provides a robust way to share information in a peer-to-peer fashion. Blockchain’s appeal comes from its security and verifiability as users can’t delete or update items from a blockchain at a later date. This makes it an irrefutable electronic record of transactions.
It works by allowing users to add transactions to a block of code. When each transaction is added, a tamper-proof audit log is created using a cryptographic hash. The block is then replicated to all participants who need to validate the transactions.
The key here is the chain. You end up with each block containing a reference to a previous block that has also been created using the cryptographic hash. If the information in a block is altered, that hash will no longer be valid, and this is what creates the immutable nature of a blockchain.
The technology also offers the ability for users to embedded business terms within a chain. This allows the automation of processes, such as invoicing, payments and receipts and offers the promise of significantly streamlined business processes.
While blockchain is a hot topic, it’s not a new concept as a lot of the underlying technologies have existed for years. What’s exciting is how those technologies have been brought together to create something with extra capabilities.
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