It seems that new terminology finds its way into our lexicons almost constantly. One of the terms to make a recent appearance is “block chain technology.” Since its introduction, the name has morphed into a single word: Blockchain.
Blockchain is a digital/decentralized/distributed ledger technology, referred to as DLT, which records transactions in an encrypted fashion to protect the records from cybercriminals. Those records are stored on servers and hard drives literally all over the world, making it difficult for cybercriminals to obtain records by hacking a single site.
Blockchain was developed to facilitate transactions in cryptocurrencies, and records and processes transactions without a third-party provider, which in the case of monetary transactions is usually a bank. This “always-on” access enables those who use cryptocurrencies to process transactions more quickly than banks, which operate during traditional hours, including being closed on the weekend. Those limits can delay approval of transactions, sometimes by several days. Validation of transactions on a blockchain occur 24 hours a day, seven days a week.
Blockchain technology has actually been around for almost a decade, as it was developed around bitcoin. However, it has recently begun to garner significant attention, in part due to its applicability to industries beyond cryptocurrencies.
Broadly, the name “blockchain” refers to a continuously growing list of records, called blocks, which are linked and secured using cryptography to create a shared but immutable ledger for recording the history of transactions. The attribute of being unchangeable is a key benefit of blockchain and, although relatively new to the business and enterprise arena, it offers a number of benefits across a range of industries.
At a high level, blockchain platforms are designed to help business leaders accelerate the development, governance and operation of a multi-institution business network.
In financial services, direct connections to shared ledgers can help consolidate internal and external data in secure ledgers. Improving data quality helps improve compliance programs. In manufacturing, distributed ledgers can improve multiple data-intensive processes such as chain-of-custody record keeping and warranty compliance programs.
In retail supply chains, manufacturers and retailers are investing in DLT to improve their visibility in the flow of funds and chain of custody to help them fight fraud and reduce the flow of counterfeit goods.
Health care providers, regulators and agencies are looking at DLT as a way to help in the delivery, management and security of patient records and manage electronic health records.
Increasingly, enterprise customers are looking at blockchain, DLT and smart contracts (all of which are referred to as blockchain) to help improve their business processes, data management and data security, and boost financial performance.
Among the positive aspects of blockchain technology is that it is built on open-source code, giving a developer or business the ability to customize it to their applications. As a result, blockchain can be designed to be completely open to the public, or it can be totally private, with only certain parties granted access to the data or, in the case of cryptocurrencies, allowed to send and receive payments.
To learn more about blockchain and how it may be helpful to your business, contact the Economic Development Collaborative-Ventura County. Conveniently located in Camarillo, California, we’re here to help!