In our last edition of the Reseller Edge newsletter, we discussed the basics of Cryptocurrency and how to understand this potential game changer. As our series continues, we look at the breakthrough technology behind it, blockchain. According to a Statista report, “Worldwide spending on blockchain solutions is expected to grow from $1.5 billion in 2018 to an estimated $11.7 billion in 2022.”
The History Behind Blockchain
The concept of blockchain dates back the early 1990s with W. Scott Stornetta and Stuart Haber. TechBullion states, “In 1991, the pair described the first work on a cryptographically secured chain of blocks.” Nearly three decades later, and shortly after the bank crisis of 2008, a person or group of people that went by the name of Satoshi Nakamoto, developed a decentralized currency based off of a technology called blockchain. Nakamato wanted to create a form of payment (cryptocurrency) which wasn’t controlled by a government, institution, or third party.
Blockchain is defined as a decentralized, distributed, and incorruptible digital ledger that is used to record transactions across many computers. According to Ginni Rometty, the CEO of IBM, “What the internet did for communications, blockchain will do for trusted transactions.” Below is a graphic that provides an example of how the technology works.
Benefits and Practical Uses
Blockchain isn’t just a trend or a fad, and companies in all sectors are taking notice. According to a report published by PwC, “84% of executives surveyed said their companies are actively involved with the technology.” These industries range from the medical/healthcare field to cyber security, and most importantly, the financial services industry. The reasons why companies are getting involved with blockchain:
- Improves security by recording and validating each transaction
- Reduces the risk of counterfeit currency and fraud
- Not as likely to be hacked due to decentralization
- Faster transactions that cut out the middle man
- Very effective, streamlined payment processing
- Buy or sell items or make purchases with no commission to third parties
Blockchain technology may not be the easiest concept to grasp initially, but don’t let that that scare you. It’s been around for over 30 years, and as of the last decade, has become more and more popular in a variety of industries, including financial services. Not only can it be used with popular cryptocurrency like bitcoin, it can also provide numerous benefits such as improved security, faster transactions, and very effective processing.Back To Blog