The Past, Present, and Future of Blockchain and It's Effects on Business

What gaps have technologies closed?

In the 1400s, the invention of the printing press allowed the masses access to books, news, and other forms of writing. Suddenly, knowledge was no longer limited to the privileged few. The invention of the printing press closed the knowledge gap. In the 1800s, the invention of the engine allowed more mass to be transferred at a faster rate. We no longer needed as much manual labor to operate businesses. The invention of the engine closed the power gap.

In the 1970s, the internet began. The internet has allowed us to be closer than ever, someone from Australia can talk to someone in America. You no longer have to send a letter home, you can now video call your parents or grandparents and see and communicate with them without moving from your chair. The internet closed the distance gap, bringing the world closer than ever. The internet also widened another gap though, the trust gap. Blockchain is the technology that will close the trust gap.

What is a Blockchain?

A blockchain is a distributed, decentralized ledger. Yeah these are some big words. All this means is that a blockchain consists of many nodes in a network in which each node keeps its own copy of the ledger. The ledger keeps track of all the transactions on the blockchain. Let's take a more concrete example.

Imagine you're investing in a project. In today's world, how are you going to verify the validity of your investment? You can use a third party like a bank or an agency, but that takes weeks or months to verify. After you invest, how are you going to keep track of what's going on with your investment? In today's investment models, you'd have to jump through hoops and do tricks to get access to that information.

In a blockchain implementation like ours, the distribution of the ledger makes access to knowledge about what's going on with your investment easy. You will have a copy of the ledger on your account. You will not only get to see how the money is being spent, but also how much other people are buying into the project.

How is commerce currently done?

Earlier I said that blockchain will close the trust gap being exacerbated by the internet. Currently, we trust in commercial manners with the help of a third party entity. For example, if you’re investing in any of the stock markets, the NYSE, NASDAQ, or DJI, you’re trusting in the market as the third party entity that validates the companies on it. If a company is listed on a public stock exchange, then it has been verified by that stock exchange as a legitimate company. 

That is not to say all legitimate companies are listed on stock exchanges, some companies are private. When you invest in a private company you get a third party like a bank or independent auditor/agency to verify that the company is legitimate. With blockchain technology, you can leverage other people to verify the legitimacy of the project or company. The larger the network, i.e. the more people that participate in a crowd investment, the more people already trust in the network. 

How can we close the trust gap via Blockchain?

Trust is complicated. It’s not always our automatic instinct to trust. Usually we have to feel like the person that we’re talking with is trustworthy, or the company that we’re investing in is trustworthy. Today, we “manufacture” that trust in the market using a third party, and then we use our gut instinct. Tomorrow, we’ll close that gap with blockchain technology.

Let’s imagine a situation in which you’re buying a product. There’s brand A, let’s call it Aardvark, and then there’s brand B, let’s call it Bardvark, Aardvark is a traditional company, and Bardvark is a blockchain company. Both claim to be USDA certified organic, both claim to be free of soy products, and so forth. In traditional companies, you just have to believe the label right? Do you have another way to verify? Maybe the company website. With a blockchain company like Bardvark, you’ll pull out your phone and scan a QR code which will show you the blockchain and allow you to see all the steps and ingredients that went into your product along the way, verified by a network. Which one would you pick?

For more information, here's a TedX Talk about blockchain by Richie Etwaru.