A Very Introductory Discussion of Blockchain

We’ve been hearing about bitcoin and blockchain for a while now; you may have wondered what these things are, how they relate to you and what you are doing with your business. But you also might have thought that these things are too complicated, and only for computer geeks. It seems likely that the secure and transparent nature of blockchain transactions means that we will be using this technology for anything that requires secure transactions and recordkeeping. Time to dive in and learn a bit about blockchain!

A Quick Definition of Blockchain

From the Investopedia article on introduction to blockchain:“The goal of blockchain is to allow digital information to be recorded and distributed, but not edited.” Blockchain is a type of database. Data is collected together in a group (“block”); once the block is full, it is added to the end of the chain of blocks of data. It is timestamped and labelled with its own unique identity (called a “hash”) and the unique identity of all the blocks in front of it in the chain.When data is added to the chain, it is verified by all the computers on the network first. Once a block is added to the chain, it cannot be changed. This is what makes blockchain so secure; all the computers on the system (“nodes”) need to verify the data first, you can add data to the blockchain, and you can see all the transactions of the blockchain, but you cannot change the data.

Who Would Benefit from Using Blockchain?

Per Investopedia, 

[B]lockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen…. [B]lockchain can, in theory, be used to immutably record any number of data points. As discussed above, this could be in the form of transactions, votes in an election, product inventories, state identifications, deeds to homes, and much more…. Some companies that have already incorporated blockchain include Walmart, Pfizer, AIG, Siemens, Unilever, and a host of others. For example, IBM has created its Food Trust blockchain to trace the journey that food products take to get to its locations.

The short answer to who could use blockchain—all businesses, governments, and private citizens. Citizens in developing countries that do not have access to any way to store their money other than in a physical hiding spot would especially benefit from using a blockchain wallet for their financial transactions.Investopedia goes on, 

Perhaps the most profound facet of blockchain and Bitcoin is the ability for anyone, regardless of ethnicity, gender, or cultural background, to use it. According to the world bank there are nearly 2 billion adults that do not have bank accounts or any means of storing their money or wealth. Nearly all of these individuals live in developing countries where the economy is in its infancy and entirely dependent on cash.

For more detail, here's a video on how blockchain is changing money and business. 

Shaw & Associates is keeping an eye on developments in blockchain and will continue to provide updates as we get them.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.