Bitcoin debuted nearly a decade ago yet it seems that we still haven’t reached a consensus as to whether it will survive and prosper. Cryptocurrencies like Bitcoin have exploded in popularity, surged greatly in terms of valuation, and withstood cynicism from established institutions and prominent investors.
Still, decentralized currency seems like an unsavory prospect to many, and supporters of distributed digital cash remain divided as how to best implement the best possible version of cryptocurrency.
What powers cryptocurrency, the clever code that embeds triple-entry accounting into its transaction system, is arguably, a far more impactful technology. Whatever the fate of Bitcoin, or any one of its descendants, Blockchain will be here to stay.
What is so special about Blockchain? Essentially, we can think of Blockchain technology as a new, more advanced form of accounting, tracking, or filing. These terms may be a tad limiting, but are sufficient for the purpose of simplifying an abstract, far-reaching technology. It’s an easier, more secure, more transparent way to transfer, track, and log things.
With Blockchain, we have a global ledger with the capabilities to improve supply chains, health care processes, and the organization and consolidation of data. The uses for Blockchain are endless. Due to its open-ended nature, the innovations that could be stacked upon it are truly staggering as well.
Blockchain, as the above authors of the article The Truth About Blockchain, Marco Iansiti and Karim R. Lakhani, for the Harvard Business Review describe it, is a foundational technology.
“Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems,” the authors write. “But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum.”
Just as TCP/IP slowly swept through to optimize processes in every industry, so will Blockchain, the authors contend. But, just as TCP/IP took decades to make its rounds, so will Blockchain. Bitcoin may be similar to primitive email. An amazing, cost-slashing application, but also just the tip of the iceberg, so to speak.
If change is to be as slow as the authors predict, when can be expect adoption to rise and what is the current state of adoption? Many large tech companies, such as Microsoft, IBM, Oracle, Intel, and Accenture are investing in blockchain startups, internal blockchain projects, and cross-industry alliances like Hyperledger.
Interest outside of tech is rising steadily as well. Citigroup and Goldman Sachs are among some finance giants pouring resourcing into Blockchain, according to CB Insights. According to Forbes, the U.S. government is even showing an interest in adopting Blockchain technologies to streamline certain processes and projects.
What is driving this interest? With Blockchain, companies could slash cuts dramatically. If you work in a complicated development environment, for example, and deal with a number of databases, Blockchain could be a solution. Blockchain could act as a master ledger, making the transferring of data far less error-prone.
While the benefits of Blockchain are clear, barriers to adoption remain. For one, as with all peer-to-peer networks, there are security risks. Already we have seen numerous examples of cryptocurrencies, most famously Ethereum, falling victim to tampering. In addition, credentialing, authorization, and special privileges are things that must be worked out somewhat creatively with a decentralized network.
The complexities of Blockchain may mean investment in the technology are slow. Indeed, fear over security and its novelty may cause the process to go slower as well. Still, it seems, looking into the future, that Blockchain will reshape how industries perform a variety of tasks, from how they transact to how they interact.
Blockchain has far more potential than simply finance and digital cash. As amazing as those innovations are, Blockchain will be a technology we can build many more applications upon, with far more impactful effects, than its original implementation.