Here is our paradox: a technology designed to make obsolete the concept of banks as credit institutions aimed at financial exchanges, has been adopted by the very same “enemy” it was supposed to defeat. The so called blockchain, created by elusive Mr Satoshi Nakamoto, the pseudonym protecting either a single person or a group whose identity has been secret and debated for years now, seems to be particularly appealing for its natural competitor. To the point that Borsa Italiana and the London Stock Exchange Group, together with IBM, have been working on a solution based on it, aimed at digitalizing small and medium business share capitals which has attracted the attention of Goldman Sachs that invested over 50 million dollars on it to try and cut down on costs and mediators (LSEG in partnership with IBM for developing a blockchain-based technology). Read it in Italian.
Despite this, however, business leaders around the world are often not aware of this technology potential. And yet, six basic concepts should have become clear by now. First of all, what blockchain is. To put it in a nutshell, the blockchain is based on a widespread consent mechanism joint with cryptography, aimed at providing a verified log of verifiable and inalterable safe transactions.
Blockchain and Bitcoins are not the same: the former is, indeed, a technology, whereas the latter are just one of the applications using such technology. Bitcoins are a cryptocurrency but, although the most famous among media, on the web and on TV, they are not alone. We can count more or less three thousand cryptocurrencies such as Ethereum, Litecoin, Monero, Ripple and Dash.
What makes the Blockchain so important is its mechanism of safe decentralization. The blockchain is actually revolutionizing the industry, the way payments are made and financial services are provided , the way contracts are conceived and so on, thanks to its mechanism which allows parties to make safe transactions, amounting even in just a few cents, without any third party mediation.
The blockchain is safe because it boasts three fundamental features: it is unalterable (data cannot be modified once they have been created), it is transparent (all the participants can see what is going on) and it is independent (self-managing). The older the record, the safer it is, since it has been consolidated in the block and applied to all the network nodes.
Although the blockchain is much safer than traditional IT tools, we should consider that there is no 100% system. However, we can say that, currently (since “tomorrow is not guaranteed”, as Lorenzo de’ Medici used to say), the blockchain can reach up to 99%. Only a collusive attack may have a chance of cheating the blockchain, a delusive action which may force the network to accept an illicit transaction. But this would require a huge number of accomplices, which makes it quite difficult to accomplish.
These are the reasons why more and more people and businesses are bound to adopt the blockchain, which will eventually exceed digital payments and the like. Also, the blockchain ability to transform is simply revolutionary.
Do your colleagues and bosses know what the Blockchain is? And what do you think of it? Tweet @agostinellialdo.
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