You've almost certainly heard about blockchain--one of the popular versions of blockchain is cryptocurrency giant Bitcoin. You may even have a vague idea how it works.
But why is it so important? Why should you care? Those are tricky questions to answer. Blockchain technology is already being tested in commerce and has the potential to change the way most companies do business. Gaining a basic understanding of how it operates--and could fit into your business--can help you break away from short-term thinking and focus on future innovation to fuel your business long-term.
There are many advantages to blockchain. It removes the middle man, like a bank or government, to complete commercial transactions, eliminates the need for you to keep your customers' personal information, like their bank or credit card numbers. Blockchain transactions are more transparent to the general public, so they know more about the products they purchase.
I order products for my yoga studio's retail store, such as yoga props and clothing. If blockchain technology were in play, the entire supply chain process would be transparent to me in my studio.
Right now, if I told my customers that my products are "eco-friendly," I'd have to trust the manufacturer and the wholesaler that their claims are true. In the blockchain world, I don't have to "trust" the supplier. Instead the entire supply chain process is transparent to me as a consumer. I know exactly how the products I sell are sourced, where they came from, what materials were used, and how they were transported.
There are many more layers to how blockchain operates and how it can benefit businesses and our economy now and in the future. It's a lot to wrap your head around. Luckily, some recent TED Talks have focused on the issue--and they've simplified the concept a lot for me. Here are my three favorites:
1. Explaining Bitcoin to a fifth grader.
George Donev uses an example of a transaction between Alice, Bob, and a banana to describe Bitcoin and blockchain technology in one of the simplest and most straightforward ways. This is a good place to begin to understand blockchain's basic concept and how it operates.
2. How blockchain is changing money and business.
Don Tapscott explains the trust-building features of blockchain technology and how it will impact the world of finance through several real-life examples. This is a good primer to learn how you and your business may best use blockchain.
3. How blockchain could radically transform the economy.
One of the advantages of blockchain is that it eliminates the middleman like banks to facilitate trade and transactions. Here, Bettina Warburg talks about why this changing model of commerce can be a good thing for our future economy. This talk helps to show blockchain's far-reaching potential for every type of business no matter its size.
Whether you believe this is the future of transactions or not, blockchain technology is here to stay and will continue to grow as it expands into other areas of business and society. The earlier you begin understanding its uses, the quicker you can get ahead of the game.