Blockchain? Don't you mean Bitcoin? Bitcoin is fun, but I'm sure by now you're a little tired of all the hype around it. We all have that one friend determined to get rich off investing in it or that one relative ready to explain the ins and outs of how money works until you fall asleep. Eventually, we stop caring, viewing it as some fad like tulips or a new dotcom bubble. Despite how much people seem to value or devalue it, the real value is in the protocol it's built on the blockchain. A blockchain is a secure, append-only log of transactions copied across multiple computers.
An Explanation of Sorts
Let's break it down a bit. Imagine every person in the US knew everyone else's ancestry. This ancestry represents our blockchain. Every citizen knows who their parents, great aunts, and second cousins twice removed are. This keeps some shady person from arriving on your doorstep claiming to be your long-lost niece to nab your inheritance.
Now, someone really clever might try to show you a different family tree and tell you yours is wrong. Fortunately, all your neighbors have a copy, so you can just ask them if you have the right one. For a blockchain, this means no one can falsify a transaction. There's much more to it than this, but hopefully, this helps you understand the concepts beyond the buzzword.
Having a distributed ledger that ensures all transactions are recorded and accurate has the potential to reshape many different fields. Anything that deals with transfers, transactions, and ownership has the potential to be touched by a blockchain. Think of how useful it would be to know that every time you made a transaction, it's accurate and you have a log of everyone who's touched it!
Ownership, Titles, and Deeds
When I speak of ownership, mortgages immediately come to my mind. If you've ever bought a house, you know the paperwork is immense---30 pages or more. A lot of this is to ensure you and the seller are legally willing to change the house's owner. Groups of people are then paid to double- and triple-check it. With a mortgage blockchain, this could all happen automatically. You can build in smart contracts that use math to validate that both parties agree to the title transfer automatically.
Accountants invented double-entry bookkeeping to ensure accounts are balanced properly and to avoid bookkeeping errors. However, when dealing with external accounts, it's still a manual process. Millions of dollars a year are spent to reconcile and audit the ledgers of companies. With a blockchain, you actually get a fully automated triple-entry system: the buyer, the seller, and the machines validate your transaction by solving a math problem. This could save accountants time and money and save business owners the pain of fees and worry.
The problem of getting someone's medical records is huge. Doctors and nurses often spend more time dealing with medical records than they do with patients. As a post from Wired explains, imagine that your doctor could easily encrypt and record every visit and treatment you had on a medical records blockchain to which your providers had access. Not only would this save money on storage and retrieval across multiple medical record systems, but your doctors could also spend less time typing and searching for your records and more time treating your illness.
The above industries have fairly obvious applications for blockchains. However, there are a couple of areas that seem to push the envelope. Decentralized autonomous organizations are starting to spring up, where no one person or group controls the company. A set of rules and smart contracts control their behavior. Other applications include decentralizing entrepreneurship, which would let people invest in ideas as part of a distributed network instead of something centralized like Kickstarter.
There's also a niche for artists and artisans who craft, make music or do something unique and creative they want to sell to the world. People are getting tired of moves like Etsy's payment change, and creatives may look to set up payment systems on a blockchain network like Ethereum.
No one really knows yet what value blockchains can fully bring. We're in the early stages of blockchain technology, with developers still working out the kinks. It could be that the most valuable applications are yet to be understood.
Do I Really Care?
This is all shiny, newfangled stuff. But should you care? Honestly, unless you've already dove headfirst into the blockchain trend, it might seem most of these things I've discussed will only cause a small ripple in the pond of your life. But this is only the first wave, and perhaps something more impactful for you is down the line.
Even with just the benefits mentioned in this post in place, imagine your life. You want a house, you go visit it, you go online and sign the contract right then and there. It's time to visit the doctor, and you don't have to wait 30 minutes. As a plus, your bills are two-thirds the cost. You run a business and the books are overwhelming you, so your AI assistant audits your blockchained transactions and saves you a month's worth of headaches. And imagine whenever you buy anything on the internet, you just pay for it without having to go through a third-party service such as PayPal.
Eventually, blockchains may become so ingrained in our culture as to become boring. After all, the same thing happened with the internet as we know it today. So maybe don't invest your kid's college fund in Bitcoin, but leave your mind open to the theory behind blockchain. It could change what we consider normal, and change it for the better.