Tuesday, February 10, 2015

Blockchain Technology: The Focus of Blockchained

Technology is changing faster, and faster. Information is being exchanged in more ways that are convenient than in any other time in history. 

As submarine sailor from 2008-2013, the months that I would leave for deployment and return to port, I could never catch up with how fast technology was changing. Cellular data, computing power, cloud storage, media platforms, and devices all perform different from their previous models in only a few years time. Technology that manages information is changing even faster. 

Firsthand experience in handling sensitive information while in the Navy increased my interest in blockchain technology. There have been six large examples of how sensitive information was incorrectly secured in just the last two years. Hacking and data breaching are popular terms used for the mishandling of information by someone gaining access that should not.

The Blockchain is one of the latest technological innovations that transform data management and security. With this new technology, many sectors of business are changing.

The blockchain is simply a decentralized ledger. A chain of blocks that contain a record of all transactions ever recorded on that chain. In a system of checks and balances, about every ten minutes a new block is created. Any block on that chain are viewable to anyone at any time, and verified as a new block is made. Transactions are 'signed' by both parties through coins called Bitcoins. Bitcoins in the blockchain can be used as a digital signature and proof of ownership. Users who verify transactions inside of the Blockchain and create new blocks receive a reward in Bitcoin.

The verification process and transparency in proof of ownership that the Blockchain provides, has created a digital arms race. The technology is also open source. That means, new companies are using this new technology to verify ownership of previously difficult things to prove. Various industries have been effected. Crowdfunding (Lighthouse) and land rights in undeveloped countries (Factom) are attempting to harness this new technology. Blockchain technology is in early adoption stages and evolving rapidly.

The Blockchain is not mentioned often in articles, however, because one element of blockchain technology, Bitcoin, has captured more attention.

"In non-technical language, Bitcoin is a digital currency in which transactions can be performed without the need for a credit card or central bank. It's designed to enable users to send money over the Internet in a very simple and efficient way."

Blockchain.info [Block Explorer Service]

"[Bitcoin] is, quite simply, one of the most powerful innovations in finance in 500 years."

Bitcoin technology has emerged as a new avenue of financial engagement. Google searches show the interest in Bitcoin has grown exponentially over the last 6 years. Investment in this technology through Bitcoin companies, like Coinbase, has increased to over $75 million in just the last few weeks. Federal governments like the US and Canada have heard expert testimony over the last few years and are writing fresh legislation about this technology today. A bill was introduced this year in New Hampshire to pay taxes in Bitcoin. This blog will showcase who is using this technology and why we should care.

Much controversy comes with a new technology in the modern age. High volatility, a large knowledge gap, and people looking to make a quick dollar, have muddied the waters quickly. Though the world of Bitcoin is a central part of the blockchain technology, this blog will focus on only the general aspects of the blockchain, recently coined Bitcoin 2.0.