Although most people are beginning to learn about “blockchain” simply because of Bitcoin, its roots – and its applications – go much deeper.
Blockchain is a technology in itself. It empowers Bitcoin, and this is why * many * new ICOs have flooded the market – creating an “ICO” is ridiculously easy (no barriers to entry).
The point of the system is to create a decentralized database – which basically means that a network of computers (usually managed by individuals) is able to operate, regardless of the choice of “Google” or “Microsoft” for storing data. In the same way as a big company.
To understand its impact (and thus where the technology can take the industry) – you need to see how the system works at a basic level.
Created in 2008 (1 year before Bitcoin), it is an open source software solution. This means that anyone can edit and download the source code. However, it must be noted that the central “repository” can only be modified by certain individuals (so the “development” of the code is not essentially free for everyone).
The system is known as the Merkel Tree that works – a type of data graph that was created to provide access to versioned data on a computer system.
Merkle trees have been used to great effect in a number of other systems; Most notably “GIT” (source code management software). Without being too technical, it basically saves a “version” of a set of data. This version is numbered, and thus can be loaded at any time if a user wants to recall the older version. In the case of software development, this means that a set of source code can be updated on multiple systems.
The way it works – saving a huge “file” with updates to a central data set – basically powers the choices of “Bitcoin” and all other “crypto” systems. The word “crypto” simply means “cryptographic”, which is the technical term for “encryption”.
Regardless of its core functions, the real advantage of adopting a wide “on-chain” is almost certainly the “example” that it provides to the industry.
An idea called “Industry 4.0” has been floating around for decades. Often combined with the “Internet of Things”, the idea is that a new level of “autonomous” equipment could be introduced to create more efficient production, distribution and distribution strategies for businesses and consumers. Although it has often been harked, it has really been accepted.
Many scholars are now looking at technology as a way to make this change easier. The interesting thing about “crypto” is that the various systems built on top of it – especially evidenced by the choice of etherium – can actually be programmed to work with a single level of logic.
IoT / Industry 4.0 has so far really missed this argument – and why many are looking to “blockchain” (or equivalent) to provide a base-level standard for advancing new ideas. This value will enable companies to create “decentralized” applications that empower intelligent machinery to create more flexible and efficient production processes.