Blockchain as a Game Changer
How does blockchain work? Will government regulate blockchain? Only the business owner’s imagination limits the potential applications of blockchain. Blockchain brings trust and transparency to any transfer of an asset. Trusted third parties historically have facilitated the transfer of assets. Examples of trusted third parties include banks and credit card clearing houses. The government regulates these trusted third parties.
This begs the question: What will the role of Government be in regulating blockchain?
Blockchain is foundational technology
Blockchain is most widely known as the underlying foundation upon which cryptocurrency is built. Of course, everyone knows of Bitcoin as one such cryptocurrency. But, experts state that the exciting aspect of cryptocurrency is blockchain. Even the United States Government recognizes blockchain’s potential to change the economy. Congressional committees held hearings in 2016 and 2018 educating themselves and considering how to regulate this new technology.
How does blockchain work?
Blockchain works by using a distributed ledger to verify transactions before being written into the ledger. The way blockchain works prevents the ledger from being changed once it is written. Therefore, this promotes trust in the transaction and in the entries in the blockchain.
Trusted third parties
Almost every industry that relies on trusted third parties to complete transactions will benefit from blockchain. For example, any industry that relies upon credit card clearing houses to approve a transaction relies on a trusted third party. As a result, blockchain removes the trusted third party from the transaction. Thus, this speeds up the transaction.
In addition, consumers benefit from blockchain. Blockchain removes the trusted third parties. This reduces the time it takes to complete a transaction. Thus, blockchain reduces the the costs associated with completing transactions.
How people record a deed, sell a car, record a deed, buy a mortgage, store and access medical records, and even buy music will change by the use of blockchain. But, this is not the distant future. This is happening now. As a result, any business owner who sits on the sidelines waiting for the right time to enter the field, risk entering the field too late.
How blockchain works with regulation
Many business owners are sitting on the sidelines waiting to see how blockchain will emerge in the future. However, other business owners are using blockchain to change the way they do business. These are the business owners who will likely emerge at the forefront of their industries. The potential of blockchain and how blockchain works is exciting.
For some examples of how blockchain works check out IBM Hyperledger, Factum, and Etherium. Hyperledger is “an open source collaborative effort created to advance cross-industry blockchain technologies.” Factum blockchain is a platform upon which you can build a blockchain without any prior expertise. Etherium is a blockchain app platform that runs smart contracts.
Future blog posts will discuss smart contracts. Until then, check out the links above to learn more about this exciting technology.