What is Blockchain and does it really matter?
Category : BLOGS
Humankind has always stood on the wrong side of history when it came to predicting how new innovations would affect their lives…and so I roll my eyes when I get asked: “What is the Blockchain, and does it matter”?
Let’s start with the conclusion and work backward, shall we?
The word Blockchain is made up of two words we all know. Block. And Chain. The blockchain is a technology. Start by thinking of it this way.
You buy a 40,000+ piece jigsaw puzzle (the blocks). You then give one piece of the puzzle to 40,000 different people, each of whom does not know which piece the other has, each of whom is connected to you (the chain). “You” are the Blockchain program.
Does it really matter? Well, yes. If you were a Dinosaur, Blockchain is the Meteor that is about to wipe you out. Permanently. You have two options. Ignore it and die. Or adapt. Become a cockroach!
Still not convinced? It’s the automobile to all horse-drawn carriage Coachmen. It’s the Kodak automatic camera to the dry plate camera operators, and ironically, the digital camera to Kodak. It’s the telex to the telegraph, and later the fax to the telex. And it’s the world wide web to all previously decentralized data (information) sources. It’s a transactional processing and data security revolution…Get the picture now?
But what IS it? Or better put, what can it do?
To easily answer the question “What is Blockchain, and does it really matter”, it best to focus on everyday applications that are already using Blockchain technology.
Let’s make one thing clear. The blockchain is not Bitcoin. The blockchain is not a Cryptocurrency. The blockchain is a Technology. It became widely known as a term with the greater acceptance of Bitcoin by the market and average investors, and with the rise and rise of alternative Digital tokens.
If you are interested to learn more about Cryptocurrency opportunities, my blog on the subject might interest you – How To Invest In Crypto Currency.
The advent of “Smart Contracts” alone has spawned a whole new industry in many sectors and “disrupted” what were markets that were typified by stifled innovation, poor customer service, lack of price transparency and lack of true competition. Previously dominant players (our dinosaurs) are scrambling for cover. Smart contracts can automate many kinds of processes and operations, the most obvious being payment and actions conditional on payment. But the capabilities extend to many business and organizational activities.
The company that has been at the forefront of the smart contract evolution and revolution is Ethereum. By their own definition “Smart contracts are account holding objects on the ethereum blockchain. They contain code functions and can interact with other contracts, make decisions, store data, and send either to others. Contracts are defined by their creators, but their execution, and by extension the services they offer, is provided by the ethereum network itself. They will exist and be executable as long as the whole network exists, and will only disappear if they were programmed to self-destruct.”
Ethereum has been the platform on which many of the new players in the Cryptocurrency space have built their own digital token, which in turn has led to Bitcoin losing its dominance. However, it’s the use of smart contracts in other markets that have opened the eyes of many to the untapped potential of Blockchain.
Some use cases that have already been tested and are nearing, or are in the implementation phase are: Digital Identity, Records, Securities, Trade Finance, Derivatives, Financial Data Recording, Mortgages, Land Title Recording, Supply Chain, Auto Insurance, Clinical Trials, Cancer Research, Music Distribution and Secure Digital Voting.
How Will Blockchain Technology Affect Me Personally?
The difference in how the process looks now and how it will look in the future is visually displayed below for three usage cases, digital identity, securities, and mortgages.
For a full view of more usage cases read the CNN Special Report.
Can I Make Money From Blockchain?
Yes. How? The first and most obvious case is – invest in Ethereum. Back in the day, you did not have to own an automobile to know that owning shares in Ford was a sound financial decision. Owning shares in the dominant provider of smart contracts would seem like an equally sound financial decision, given the market potential, and the fact that usage is only in its infancy.
And it would also pay to start tracking leaders in the usage case areas I mentioned above. Dominant players will emerge who are early adopters of Blockchain in their particular patch. Sectors will go through mergers and acquisitions as company’s fortunes rise and fall, when markets are in turmoil there are always buying opportunities.
One example of a company that only exists because Blockchain and smart contracts exist, is Dent. “DENT Wireless is a company with a mission to tokenize, liberate, and democratize one the most important commodities in our time: mobile data and bandwidth. We are developing mobile apps and a marketplace using Blockchain technology for buying and selling of mobile data packages, which can be direct telco products, or originating from users that sell unused mobile data packages to each other.”
Another example of a company that is using Blockchain as the platform for the Telco business is Bubbletone. “With Bubble Tone Blockchain, travelers can swiftly become legitimate local customers of any foreign operator in the country they are traveling to. They don’t need to replace their SIM card, and they retain their home number.”
Blockchain does matter and will shape the future of many companies and even whole industries, and it will shape the user experience of those interacting with companies in those industries. There is money to be made by investing in companies that own enabling technology, such as Ethereum’s smart contracts. There is money to be made by investing in new players shaping the future of old markets, such as Dent or Bubbletone. However, there will also be money to be made from investment into the sector that is synonymous with Blockchain. Cryptocurrency. In the coming months and years, we are going to witness an explosion of Digital Tokens (Cryptocurrency “coins”) being issued globally. There will be a consolidation of companies in this space as they all struggle to remain relevant. And like with any market consolidation, there will be winners and losers. There is a famous saying that I used to hear from some older “Floor Traders” of the New York Stock Exchange on Wall Street. In times of market turmoil, they would say “Bulls and Bears will always survive. Only pigs get slaughtered”. As always, if you try to make a “killing” in the Cryptocurrency space don’t be surprised if it is you that gets killed.
For those that are interested, I conducted a lot of research before coming up with my own Cryptocurrency Investment Opportunity here.
Yours always – Jim