By Kirk Bohn
Global Cloud Services Enablement Leader
Have you heard all the chatter about blockchain? It’s being called the internet’s real “game changer,” and people are throwing a lot of money at it – and I mean A LOT!
Do you want to know more… like where it came from, how it works and where it is going? Well, I am here to fill you in on the specifics.
What Is Blockchain?
First off, blockchain has nothing to do with bitcoin. Yes, it uses the same technology to facilitate transactions, but technologists are finding tons of other uses for this technology. “Satoshi Nakamoto” is the name used by the unknown bitcoin designers who created its original deployment. As part of that deployment, the unknown designers also created the first block chain database.
Blockchains use what’s known as distributed ledger technology, which allow digital information to be propagated across multiple systems but NOT copied. It is ultimately creating a new framework for a new type of internet – and it is starting to show up in a wide variety of commercial applications.
How Do Blockchains Work?
Information held on a blockchain exists as a shared,
continually reconciled database. The blockchain database isn’t stored on a single computer host, meaning the records it keeps are truly public and accessible to pretty much everyone. As a result, there isn’t a single version of this information that exists for a hacker to modify or exploit.
Since data is hosted by potentially millions of computers simultaneously, it is accessible to anyone on the internet. To illustrate, imagine a spreadsheet that is duplicated millions of times across a vast network of computers. Then imagine that this network is designed to regularly update this single spreadsheet with everyone’s input. This is the basic idea of blockchain.
Ways Blockchains Can be Used
To use conventional banking as an analogy, a blockchain is like a full history of a financial firm’s transactions, and each block is like an individual bank statement. But, because it’s a distributed database system serving as an openly available electronic ledger, it can simplify business operations for all parties. For these reasons, the technology is enticing not only to banks and financial institutions but many others in the fields of real estate, insurance and the internet of things.
Technologists have also suggested that this kind of electronic ledger system could be used to track voting systems, firearms/car registrations, medical records, purebred animal registries, or even to confirm ownership of high-value objects. Blockchain brings the ability to cut out the middleman for these various types of transactions.
The PC became accessible to millions with help from Microsoft Windows and Apple, and the invention of the graphical user interface. Following the same path, a common GUI available for the blockchain are “wallet” applications, which you can use to buy items with bitcoin or other cryptocurrencies. When you start looking at current use cases, your mind will begin opening to a whole new world of possibilities that can benefit from blockchain.
How the Financial Industry Uses Blockchain
Given the structure of the DLT and the potential ability to make business operations more efficient, banks and financial institutions have begun using blockchain technology. Since blockchain has the potential to free up billions of dollars, Goldman Sachs suggested it could save stock market operators up to $6 billion a year.
DLTs give banks and other financial institutions a new and advanced way to streamline internal operations, thus dramatically reducing their expenses, mistakes and delays that are prevalent using today’s methods. In early 2017, the Harvard Business Review suggested that blockchain is a foundational technology and “has the potential to create new foundations for our economic and social systems.” It further observed that, while foundational innovations can have enormous impact, “It will take decades for blockchain to seep into our economic and social infrastructure.”
Looking Ahead With Blockchain
With the potential of decentralization and the ability to reduce overhead costs/errors, blockchain technology could create businesses and operations that are secure, flexible and game-changing. It will be interesting to see if companies will succeed in creating blockchain products and services that consumers will trust and adopt.
The demand for blockchain-based services is on the rise, and the technology is developing quickly, which is making investors seriously start speculating on its viability. And best of all, there is a growing need for block chain developers! And you know what that means? Jobs, jobs, jobs!
Arrow and Blockchain
It has certainly been interesting to watch how fast the blockchain ideology has come into the cloud and IoT world here within the Arrow walls. Our “sensor to sunset” message, along with our vendor partnerships and enablement programs, are well positioned to help partners quickly develop and grow their cloud practice.
Utilizing blockchain and creating a distinct edge using this new technology is just one of the things Arrow can help you with as a part of your cloud and/or IoT initiatives.
So, I want to ask you. Are you ready to jump on the blockchain bandwagon?
Contact me today!