Bitcoin, blockchain — the next big thing?
Blockchain is yet another new tech that promises to change the business world and, not surprisingly, it’s easy to be cynical about this. But we have to admit that the business world has, many times, been changed by new tech that was initially dismissed by cynics!
So what is Bitcoin? What is Blockchain and why is it important to business? Watch our short video to understand the reality, the potential and the barriers.
Or read this briefing to see how you can position your business to take advantage?
When the last page is written on the bizarre Bitcoin story, many people believe the conclusion will be that the world was changed… but changed by the Blockchain, not by Bitcoin!
Blockchain promises a way for people to record transactions, for example, currency, information, deals or anything else that can be digital, using a ledger that doesn’t need to have a trusted central body to oversee it.
That could enable significant changes to the way that information and business happens and, more broadly, to the way that information and identity are managed.
What are you talking about? Bitcoin? Blockchain? I’m already lost.
OK, let’s rewind to the beginning…
Bitcoin was invented in 2009 in a mysterious story that geeks love. It’s probably best understood as a currency, though some sticklers would call it an asset instead.
In many ways there’s nothing new about digital currencies like this – think Tesco points or Air Miles. We’re all very used to vouchers that are like currencies but don’t have the Queens head on them.
But Bitcoin is different because a key part of the scheme is a clever ledger, called the Blockchain.
The Blockchain has special rules and maths embedded in it to allow all the users to track the deals without relying on a central authority.
That’s right… no one is in charge!
Obviously, if you want to know how many Air Miles you’ve got, you phone the Avios helpline or check your app; or if something goes wrong you call their complaints department. They are the central authority who oversee the system and ensure it’s working smoothly.
With Bitcoin transactions (or anything else based on Blockchain) every user has access to a perfect version of the ledger so you don’t need to rely on a central body at all. The ledger is secure and reliable.
Now of course nothing is perfect, perhaps there are flaws in Blockchain that have not yet been discovered, or new kinds of maths or computers will make it hackable. You could distort the system by taking control of huge numbers of computers but it just isn’t practical. To all intents and purposes, the Blockchain is secure and reliable – in 10 years of Bitcoin there have been no interruptions, corruptions or errors.
And now there are a slew of other cryptocurrencies like Bitcoin. Arguably some of them are technically superior to Bitcoin but none of them yet has the foothold that Bitcoin does. Even Facebook is now releasing its own crypocurrency, Libra. Only time will tell which will prove to have long-term value as a currency (or asset, if you prefer!).
However, all of these cryptocurrencies run on the same kind of rails – Blockchain! Blockchains are the ledgers for all of them.
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Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it ‘fractional’) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use technology to beat their competition. Contact Us and we’ll be in touch for an informal conversation.