When the likes of Facebook and Starbucks are getting into blockchain technology, you just know it’s time to at least give it some thought. For 40 years now, we have had a love-hate relationship with the Internet. Try to imagine all the information you’ve sent out into cyberspace. And remember that all those emails, documents, photos, and personal data are copies of originals that become part of the tsunami of trivia that is subject to tampering and deterioration, and can nevermore be considered as reliable. And just don’t get us started on identity fraud.
In both our business and personal online lives, we rely on intermediaries such as banks, the government, and corporations to establish trust and maintain Internet integrity. For the most part, they are doing a good job. But really the ONLY thing you can be sure of is that online corporate entities out there are taking their time, charging commissions, and generally monetizing (for their benefit) YOUR data.
Blockchain promises to be a seismic innovation that could change all that. We entrepreneurs need to be proactive and take account of it in our IT strategies. Why? Well, blockchain platforms, like Ethereum, have 4 characteristics that make them distinct from and promising in comparison to the Internet as we know it.
⚫ Blockchain technology is distributed: All data is spread out among all the network users, rather than herded together in a corporate-owned and operated database or ledger. Just think! When all your data eggs are in one basket (someone else’s), they are vulnerable to all kinds of mischief. Distributed blockchain transactions are always between unique entities, and they do away with the need for and costs of intermediaries. Each link in the chain is reportedly also authenticated by the previous one and is highly encrypted so as to be un-hackable.
⚫ Blockchain transactions are said to be encoded in “smart contracts”: The decentralized blockchain ledger enables contracts between permitted parties that are “smart,” self-executing, and computer-coded. They are always available and supervised by the blockchain trust protocol. At PBC, this is the most attractive possibility of the blockchain future. We always promote systematized, immutable standard operating procedures wherever possible. Blockchain enthusiasts claim the future could well be lawyer-free! Certainly, there seems to be a growing career arena for people who can convert legalese into algorithms that enable smart contracts.
⚫ Unalterable: All data you choose to place within the blockchain is encrypted using cryptographic hash functions (this link has the best plain English description we have found), so that it can NEVER be hacked, altered, or tampered with in any way. It is unique to you because together with your unique crypto-identifier, it is time-stamped with the moment of its entry. Again, blockchain geeks claim this characteristic could mean an end to all of your current cybersecurity worries. Wouldn’t that be nice?
⚫ Transparent: All of your transactions on a blockchain platform are open to viewing by everybody else on the blockchain. But your privacy is assured because your identity is masked behind an unbreakable cipher and only your public address is out there. Compare this to our current financial institutions’ opaque and self-serving ways of working! Every blockchain member’s transaction history is there for all to see and thereby forces integrity. And because their history is their blockchain reputation, they are rewarded for good behavior.
Sounds too good to be true right? At PBC, we are being careful not to get carried away by the hype around blockchain. It is only a tool, like the Internet. But it is a tool with great potential to overcome the pains of online business. As your business coaches, we at PBC suggest you learn all you can about blockchain. (Or delegate the research to a computer-savvy team member).
And we invite you to contact us today with your thoughts and experiences of blockchain, so that we can learn together. The links in this newsletter are a good starting point. The bottom line is that there is an opportunity here for you and all of us to take control of our data, to keep it secure, and to monetize it as WE see fit for the prosperity of everyone. Call us for a free consultation.