I had the good fortune recently to meet the folks at Mediashower, a marketing platform for blockchain technology and cryptocurrencies. To be honest, I thought I understood the basics of the technology and had at least a simple understanding of cryptocurrencies. Turns out I have a long way to go in learning about the technology, but what I totally and completely failed to grasp is the implications this technology will have on everyday life. Here is a quick look at the technology and how blockchains will change our lives:
You’ve heard blockchain described as a distributed ledger technology. What does that mean?
- It is a series of blocks (digital assets) that are strung together chronologically to create a register (or history) of all transactions that are made with those assets.
- The blocks are represented by a “hash” – a unique code that is a digital representation of the assets which means the assets themselves cannot be seen.
- What can be seen is a definitive chronology of transactions (or changes to the asset) because every time there is a transaction or an edit, another block containing the altered set of assets is generated and added to the chain of blocks.
- The validity of the information in a block or sequence of blocks is verified through a distributed network of “miners” that simultaneously check the encryption and verify the integrity of the block. These computers are widely distributed and NOT connected to a central server.
- Once the miners complete their individual verification work, copies of the ledger are synchronized across the network.
- The process combined with the technology means that the assets are tamper-proof (even if a block were hacked, other miners would catch up within minutes and the problem would be resolved by consensus of the “crowd” of miners).
So, what does that mean for us? Everyone talks about cryptocurrencies, which are a huge part of how the blockchain will disrupt commerce, but it’s easier to grasp this technology by recognizing everyday transactions and data exchanges that could be forever altered by it:
- Accessing medical records. As anyone who has requested copies of their own medical records knows, the system is heavily reliant on paper-based processes (I bet your Dr. still has a working fax machine). Now imagine those records are stored in a blockchain. All information can be stored in an incorruptible block. Updates can be added by authorized users while chronology is maintained.
- Buying a home: Consider all the steps and paperwork required in buying a home. Using blockchain technology, home buyers would no longer need to rely on title or escrow companies to validate the title and protect them from errors or fraud. Titles stored in a blockchain would contain dependable data, information on the scope of the property and all related transactions.
- Voting online. Imagine if everyone could vote from their mobile devices. When Blockchain technology is applied to public records, it makes it possible to verify identity and eligibility beyond the shadow of a doubt.
- Purchasing anonymously. Online transactions rely on third-parties (credit card companies, PayPal etc.) to confirm that we are authorized to make the purchase. In order to verify the expense, the third-party must hold personal data on us. With cryptocurrencies based on blockchains, consumers would be able to make completely anonymous transactions directly with vendors, eliminating the middleman and the need to introduce personal information in the process.
Of these examples, the ability to make anonymous purchases is the most interesting for marketers. How will we cope when we lose the ability to discern personas and related patterns from our data? How will blockchain technology change our profession?
As I continue my journey through the blockchain, I will use this space to share what I learn along the way, and I hope you will share your knowledge as well through comments.