What is Blockchain and Why Is It Important?

At DIIANT Consulting, we’re all about digital transformation, and one of the more fascinating industries we’ve been involved in is the blockchain industry. Much like the early years of the internet, the blockchain community has experienced seasons of growing pains and maturation. However, as partners with those at the forefront of innovation, we can confidently state that blockchain is the future – or rather, it’s now.

What Is Blockchain Technology

Blockchain technology consists of a public registry of data that is shared between thousands of computers connected to a global network. The technology allows for continuous updates to the entire registry of participants – each time a party makes a transaction, the details are shared across the entire network. This data could represent financial transactions, system changes, an inventory list – basically, any type of data that would be recorded on a ledger. It sounds simple, but the technology is increasingly sophisticated, involving cryptographic elements, sophisticated algorithms, and a consensus mechanism to ensure proper validation of all transactions. The attractiveness of blockchain is that it creates accountability and transparency for the entire network. Data “on chain” is also tamper proof, or immutable, and makes blockchain infrastructures ideal for securely storing information regarding finance, business, and even governance. The other unique aspect of blockchain technology is that no single user or entity has full ownership of the network – it is a system that aims for full democratization.

Why Blockchain Technology Is Important

The use of blockchain technology is becoming a standard practice across industries and is the backbone of many smart cities around the world. Blockchain technology can also address corruption that has continued to plague developing countries due to mismatched or broken finance or governance systems. Although the use cases of blockchain technology are vast, here are two to chew on:

  1. A benefit of blockchain technology is that it can reduce operation costs for businesses. Applications of blockchain technology can be used to accurately trace the origin of goods and services. This enables companies to trace products back to their origin which lowers the cost of transaction by eliminating intermediaries. For instance, Walmart has used blockchain technology to successfully reduce the time it takes to track food from the farm to store shelves from 7 days to 2.2 seconds.
  2. Concerning governance, blockchain technology also ensures transparency and reliability with sending, receiving, and storing highly valuable data such as votes. For example, the state of West Virginia has employed blockchain technology to enable absentee voting through a mobile app in 30 counties – with blockchain technology every vote can be traced securely and accurately, and also allow those who are immobile to participate.

These are just two examples of the powerful implications that blockchain technology can and will have across infrastructures and systems around the world. Though the technology can seem intimidating, there are now countless resources to equip yourself to understand blockchain and consider if it’s appropriate for your business. Either way, we highly recommend that you at least gain a base understanding, and talk about it with colleagues to sharpen your ideas.

The sooner companies learn, embrace, and keep up with the ever-changing world of digital transformation, they will be better prepared to adapt and overcome any and all obstacles in digital evolution, especially in the ever fast-paced world of blockchain.